Why is there no credit check with a Refresh secured card?

Secured cards are an excellent option for people with a low credit score who are looking to build their credit. Like a regular credit card, secured cards report to the credit bureaus, impacting your credit score. Many people wonder, however, why there is no credit check with a Refresh secured card? Surely any product that helps build credit requires a credit check? Not with a Refresh secured card.

No credit check required

When it comes to credit cards, lenders want to know that if they extend you credit, they are going to get their money back. A good credit score shows that you have a history of making repayments. In fact, positive payment history accounts for 35% of your credit score, so you can see how quickly your score can deteriorate if you miss, or don't make some payments.

For that reason, people who have a poor credit score do not have the same credit card options as those with a good score. Lenders are naturally wary of lending money to someone who may not be able to pay it back.  Once your score has improved you will be able to apply for unsecured credit cards, but until then...

The Refresh secured card has been specifically designed to help people with lower credit scores build their score so that eventually they will be offered unsecured credit cards. Refresh prides itself on the fact that we will not check your credit score, and we don't deny anyone based on their score. We do ask applicants to check their score themselves (which does not negatively impact your score) as it's important to know where you are starting from in your credit building journey so you can see how your score increases with usage of the card.

Instead, we require secured card holders to pay a deposit equal to the amount of credit they require. If you want a secured card with a limit of $500, you will be required to put down a $500 deposit. It's important to note, however, that a secured card is not the same as a pre-paid card. A pre-paid card has no impact on your credit score. Find out more about the difference between secured and pre-paid cards here.

Once you have been issued a secured card, it works in the same way as a regular credit card. Your monthly payments of your balance are reported to the credit bureaus.

As you have paid a security deposit there is no risk to the lender that you won't be able to make your repayments, and there is no risk to you of going into debt. It's a win:win. If you're curious about why interest is charged on secured cards, you can learn more about that here.

Learn more about Refresh Financial's secured card, and apply quickly and easily in less than 20 minutes! You're guaranteed to be approved!