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Avoid Junk Cards! - Credit Union Solution

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moondog7324
Frequent Contributor

Avoid Junk Cards! - Credit Union Solution

I am convinced junk begets junk: I spent years with crap1 and Orchard junk cards with 300 dollar limits- and what good is a 200 Target card? I think these cards are a chargeoff waiting to happen:

Here is what I did and it helped me tremendously. I joined a credit union and opened a savings account- each paycheck I had $100 direct deposited to the account. After 10 pay perionds- (20 weeks) I had $1000. I used that amount to get a secured card. I try to keep the balance below 400 and pay in full every month. I have yet to pay a penny interest on that card. That card has created trust from the credit union, I have since re-financed my auto loan and got a $5000 line of credit, that I can use as a signature loan anytime. I think the key is getting above that $1000 mark before getting the secured card. Right now I'm not so concerned about my actual score as I am about building a good history and trust from the credit union- The scores will come in time. In a few months my year is up- I've will then have a unsecured card and a $1000 in a savings account that I didn't miss at all.
Kudos!
After this I was able to get a 4000 Chase platinum. My scores were not in platinum range but I'm convinced by waiting for my first $1000 card to mature and then asking for additional credit I was able to look better in the eyes of lenders. My goal for 2009 in NO inquiries ( unless I feel brave enough to apply for a mortgage)
Message 1 of 12
11 REPLIES 11
Anonymous
Not applicable

Re: Avoid Junk Cards! - Credit Union Solution

Absolutely wonderful advice for anyone trying to rebuild credit...especially in this economy!  I think I'll suggest this to my daughter who is just starting to think about building her own credit.
Message 2 of 12
moondog7324
Frequent Contributor

Re: Avoid Junk Cards! - Credit Union Solution

Don't waste money on annual fees!
Message 3 of 12
Anonymous
Not applicable

Re: Avoid Junk Cards! - Credit Union Solution

did you keep the junk cards or did you cancel them?  Once I get my house I'm just going to cancel all those crappy cards.  Those crappy cards did help rebuild my credit though but I'm stuck in low credit limit hell.  I hate it.
Message 4 of 12
moondog7324
Frequent Contributor

Re: Avoid Junk Cards! - Credit Union Solution

I weeded them out.  When do you plan on trying for the new house? I think I would wait until you get that mortgage (unless your scores are really low and you have a year of building new credit)

Be careful making any changes prior to the home loan, that includes applying for new cards.

Message 5 of 12
PayingTheBills
Frequent Contributor

Re: Avoid Junk Cards! - Credit Union Solution

Awesome advice moondog.  After reading this thread, I paid the $20 for membership to be able to join PenFed and signed up for a Share account.

Once I get my welcome package in the mail, I'll sign up for auto-debit from my checking account for $100 every two weeks just like you did.

 

I had been looking for a good local CU to join, but I keep hearing nothing but good things about PenFed, so I decided to pull the trigger.

 

Kudos to you!


Starting Score: 540 EQ 517 TU on 11/17/08
Current Score: 668 EQ 726 TU
Goal Score: 760 EQ 760 TU


My Credit Repair Journal
Message 6 of 12
Anonymous
Not applicable

Re: Avoid Junk Cards! - Credit Union Solution

CU are famous about for not reporting , Cu  dprdn't repprt to TU
Message 7 of 12
moondog7324
Frequent Contributor

Re: Avoid Junk Cards! - Credit Union Solution

I've heard great things about PenFed- I used NFCU.  The other nice thing is member specials- such as GEICO auto- I saved $$ just by joinig through the NFCU website.

If you have the patience to get to th 1000 mark, it does two things: creates good relationship with the CU and most importantly, creates good savings habits.

Message 8 of 12
moondog7324
Frequent Contributor

Re: Avoid Junk Cards! - Credit Union Solution

NFCU reports to all 3. They pull from EQ. 
Message 9 of 12
PayingTheBills
Frequent Contributor

Re: Avoid Junk Cards! - Credit Union Solution

After checking whogavemecredit.com, it looks like PenFed pulls EQ too, which will be good for me in the future because my EX score tends to lag behind a little, and my judgement only reported to EX and TU.

Starting Score: 540 EQ 517 TU on 11/17/08
Current Score: 668 EQ 726 TU
Goal Score: 760 EQ 760 TU


My Credit Repair Journal
Message 10 of 12
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