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Building credit, but stuck.

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herbravado
New Member

Building credit, but stuck.

Hello everyone, I hope that I can get some insight about what I should do.

 

I started rebuilding my credit last year after ending up in a tight spot with several credit cards during my university years. Long story short, I've got about five cards that were charged-off, with about four in collections. All of this is sceduled to fall off of my report in 2021. It's tough because while there may be a couple I can pay off easily, the others aren't. I know this hurts my score.

 

I started with a score of 580, and was initially approved for a secured Cap 1 Platinum. Since then, I've gotten a Quicksilver One and my score ranges from 600 - 615 depending on my utilization. I also have Fingerhut.

 

What should I go for next? Should I continue to get secured cards in hopes that they graduate? My Cap 1 did graduate, but they aren't giving me any CLIs automatically. Neither is Fingerhut, despite always paying early / in full. My Quicksilver is supposed to give me a modest CLI later this year. All of my current cards have never been late, and I always pay the minimum, but I still feel stuck because of low limits and no auto CLIs that I read so much about. I'm afraid of applying for more credit that will lower my score due to inquiries and not even being sure if I'll be approved since my CR is a mess.

 

I'm honestly just exhausted and would like some advice--especially since I would like to have better credit to apply for a car loan / housing in the (far) future. What do you think?

Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: Building credit, but stuck.

If I'm reading correctly, you have 3 accounts opened in the past year - secured Platinum, QS1, and Fingerhut - and are working on keeping them all in good shape.  That's definitely the right direction.  I'm not sure you want to go apping around much right now, as your scores are still a bit low for the cards that won't kill you with fees and stuff (Credit One, etc).  If you're wanting more unsecured credit, your best bet is probably to wait a while longer and let your perfect payment history and your three good accounts age a bit.  

 

Capital One is acting a little less lenient lately, and so your limits may not grow as quick as you'd like them to, but they are still a solid lender who does tend to reward patience and patronage, and if you're looking for a car in a couple of years, their auto finance may be helpful too.  

 

Discover may be another option in 6 months or so, once your score is up a bit and your history continues to improve - assuming of course that you did not burn them before.  I don't know that you'd really benefit at this point with their secured IT, unless you just want to go that route; if it was me I'd wait for my file to warrant looking at the unsecured IT.  Again, assuming you didn't burn them in your previous life.

 

Fingerhut is not a bad way to boost your rebuild, just be careful with them.  Don't forget to buy some socks or something every once in a while, so they don't close you down and blast your utilization work to pieces.  Also be careful with their "ghost" CLIS - they love to increase your limit by $500 or so, then if you don't spend that much before a certain date, your limit goes back down.  Since their pricing is a bit high and their interest rate as well, most people wouldn't want to buy $500 just to "keep" the credit increase, but if you spend on other accounts using the Fingerhut to pad utilization, just be sure to pay everything else back down before the "ghost" increase disappears.

 

WIth your list of derogs, if it was me, I'd just quit applying for anything and work on those instead.  Send PFD letters.  Ask for settlement terms.  Ask for deletions.  Dispute things that aren't correct or are out of their time limit (if applicable).  Those things are holding your score down more than anything else, and the points you could get back by working out those issues is going to be more than the few you might get from another card.  I wouldn't be apping for anything, since when I got my score improved in a year or so, I'd want to be eligible for better cards from prime lenders -  many of whom are known to be very picky about inquiries.

 

 

 

Message 2 of 9
herbravado
New Member

Re: Building credit, but stuck.

Thank you for the very helpful reply! I'll try to clarify more thoroughly:

 

Yes, I opened all of those within the past year. I think the Cap 1 Platinum is a bit older (hitting 2 years), but otherwise these are my only solid reporting accounts.

 

I definitely burned Discover in the past, and they actually did attempt to sue me (but dropped the case, no public record) so I think I'm on their black list for life, haha.

 

I'll definitely look into taking care of the old baddies. I'm just afraid of re-aging them. I have disputed some old minor things, but I'll look into PFD for the charge-offs. 

 

Thanks again!

Message 3 of 9
austinguy907
Valued Contributor

Re: Building credit, but stuck.

First of all you have to start somewhere and you did with your current lineup.

 

Second it takes a ton of time to get back to where you were before the CO's.

 

I would hold off on apping for the time being if you can resist the urge.  If not, there's a couple of potential places to head to.

 

https://www.discover.com/credit-cards/secured/

- you can deposit up to $2500

- it starts being reviewed to unsecure at/after the 7th statement

- usually see a CLI when it converts

 

https://www.bankofamerica.com/credit-cards/products/secured-credit-card/

- you can deposit up to $4900

 

 

Both offer a FICO to track your progress and both convert after a period of time.  They offer you the ability to set a higher CL with your deposit unlike some of the bottom feeders.  I wouldn't bother apping for an unsecured card though until you're hitting at least a 670 across the board which would indicate your chances of approval are at least 60/40 depending on the card / lender.  Though it's tempting you should really avoid any more store cards even though they're easier to get approved for.  The long term goals should be the focus moving forward and rebuilding.

Message 4 of 9
Anonymous
Not applicable

Re: Building credit, but stuck.

The only way you will see a significant boost in scores is to pay those COs and then request a GW removal (but honestly as long as they remain unpaid your going to go nowhere except baby limits), once you have them taken care of, then apply for a CC that has potential to grow, just keep a good payment history and don't go nuts on a high UTI. Then let your cards age a bit and lenders will see that you matured and are now taking care of business

 

Smiley Happy

Message 5 of 9
mortimerwereback
Regular Contributor

Re: Building credit, but stuck.


 

WIth your list of derogs, if it was me, I'd just quit applying for anything and work on those instead.  Send PFD letters.  Ask for settlement terms.  Ask for deletions.  Dispute things that aren't correct or are out of their time limit (if applicable).  Those things are holding your score down more than anything else, and the points you could get back by working out those issues is going to be more than the few you might get from another card.  I wouldn't be apping for anything, since when I got my score improved in a year or so, I'd want to be eligible for better cards from prime lenders -  many of whom are known to be very picky about inquiries.

 

 

 



Agree with the above. It's going to take a lot of hard work tracking things down, getting them paid and ultimately getting them resolved to a satisfactory conclusion. Best thing going for you is that you're young and you've got the time. You'll be past this and have a solid credit profile before you know it.

 

"Only those who dare to fail greatly can ever achieve greatly." -Robert F. Kennedy

Message 6 of 9
herbravado
New Member

Re: Building credit, but stuck.

Thanks everyone! It looks like I'm going to need to focus in another direction! It's gonna be tough, but I'll work hard to pay them off.

Message 7 of 9
joltdude
Senior Contributor

Re: Building credit, but stuck.

Also do you have any other loans reporting on your CR..... student loans, car loans, other loans..... if not.. might want to get an Alliant Secured Share loan ....

There are reasons to go through Alliant vs other lenders or CUs..... 

 

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

Please read the stickied messages on how to do this if your interested... 

 

Theres also Self Lender if you can make the payments.....

 

 

Kinda agree a third card would be nice but it likely would have to be secured and from someone you havent burned....

But still have work to do... trying to get those off is important.. and best way is to offer them PFDs... sometimes you have to chance from others experiences and pay them even though they "dont do deletions" or cant promise it.... 

 

-J

 

 

Message 8 of 9
herbravado
New Member

Re: Building credit, but stuck.

Ooooh, this is very interesting & I've never heard of this before! Thanks very much for sharing! I'd like to have a varied file, too, so this just may work for me. 


@joltdude wrote:

Also do you have any other loans reporting on your CR..... student loans, car loans, other loans..... if not.. might want to get an Alliant Secured Share loan ....

There are reasons to go through Alliant vs other lenders or CUs..... 

 

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

Please read the stickied messages on how to do this if your interested... 

 

Theres also Self Lender if you can make the payments.....

 

 

Kinda agree a third card would be nice but it likely would have to be secured and from someone you havent burned....

But still have work to do... trying to get those off is important.. and best way is to offer them PFDs... sometimes you have to chance from others experiences and pay them even though they "dont do deletions" or cant promise it.... 

 

-J

 

 


 

Message 9 of 9
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