Rebuilding, am I doing it right?

Anonymous · ‎04-25-2017

Ok, I suffered a rough time, and my credit is paying the price. I've been working on it, but already made a mistake with Cap 1, last year, and got my account 'restricted', and it is reported 'closed by creditor', though I have made the last several months payments on time, and more than minimum. I also have a Secured NFCU Nrewards $500 (didn't graduate, 14 mos), NFCE CLOC $500, Credit One $300, First Premier $300. With exception of the mistake with Cap1 last year, all payments have been made on time, and more than minimum.

1) Does Cap 1 ever unrestrict? If not, how long until I can apply again?

2) Does NFCU Secured ever Graduate after the thirteenth statement I have read about?

3) I don't see option on website to request NFCU CLOC increase, is that done by phone?

I am receiving my bonus next month, would it be best to pay everything to 0, or keep paying more than minimum monthly, not in terms of the finance charge, but as far as improving my credit score.

Anonymous · ‎04-25-2017

You're going to want to adopt a PIF (pay in full) mentality right away. That's one of the biggest things that will help your score as well as create healthy credit habits now and for the future.

Try to get away from thinking about minimum payment amounts. Whatever your balance is, consider THAT your minimum payment. If you have a $300 limit card with a $170 balance and a $20 minimum payment, consider your minimum payment to be $160-$170. You want to be paying off your cards every month or at most leaving a small purchase amount to report.

That Capital One issue is going to damage you for 7 years unless you can get it removed. Never be late going forward, as it takes 7 years to recover from those mistakes unless you can negotiate with the creditor to get them off. Do you have other negative items or late payments outside of the Capital One account you referenced?

Anonymous · ‎04-25-2017

There are others, Cap One was just my first mistake during my rebuilding phase, and it resulted in the account restriction.

I would pay off monthly, but saw people on here commenting that carrying a small balance helped with scoring? That's why I haven't been doing it, instead I've been paying 2x minimum, and using the card to show activity.

Anonymous · ‎04-25-2017

I think you are making some errors along the way here. It doesn't look like your scores have really improved since you started your rebuild last year and that is why the NFCU account has not unsecured. I agree with the comment that you should pay in full, if you leave a balance it needs to be between 5-8% of the limit on each card maximum. Pay close attention to when these accounts report to the credit agencies and pay the bills a day or two before then so you get credit for the reduced balance. Overall I suggest you post as comprehensively as possible your details to the rebuilding section here and let those fine folks provide you with some suggestions because your current process is not working for you. This far into your rebuild if you are not adding negatives you should have been in the low 600's most likely. I believe subscription to Myfico is the best investment I made when I began the rebuilding process and even though I will go over 700 soon I plan on still paying for the service because it has provided me with a much better understanding of what impacts my scores by monitoring the alerts and seeing what my scores are in real time. You can make great progress but it goes beyond CC accounts, you may want to consider doing a secured installment loan and pay the balance down to 5% in the first payment or two which can help quite a bit, also my guess is you have some collections or public records holding your scores down that you should address. I started in the low to mid 500's in the summer of 2014 and by following the advice of the good folks here and putting in some work got to the low 600's in about 6 months. Going from the low 600's to upper 600's and 700 is taking some time because I have some old delinquencies that are aging off. You can make similar progress but you will need to share the whole picture to the experts over in rebuilding.

Anonymous · ‎04-25-2017

Also, I would call Capital One and tell them you want to have your account in good standing and are willing to do whatever it takes (make sure you are). Doing so will likely lead to you being put into one of their programs where they allow folks to rehab their accounts. That account is killing you and while it will have less impact in a year or two it still isn't something you want when you have so few accounts reporting. Do all you can to resolve that and any other negative account.

Anonymous · ‎04-25-2017

@Anonymous wrote:

I would pay off monthly, but saw people on here commenting that carrying a small balance helped with scoring? That's why I haven't been doing it, instead I've been paying 2x minimum, and using the card to show activity.

Make sure you don't confuse "carrying" a balance and allowing a balance to report as being the same thing. Carrying a balance suggests that you're paying interest every month, which it sounds like you are as you've stated you pay twice the minimum or something similar. Allowing a balance to report costs you nothing; you never pay a penny of interest doing this. When your statement is cut you just need to pay the statement balance. To maximize your scores you want to let only 1 of your cards report a small balance ($5-$10) while ALL OTHERS report $0 balances.

HeavenOhio · ‎04-25-2017

As BBS says, pay your statement balance in full. The balance that you choose to report on the following statement should come from new charges.

AverageJoesCredit · ‎04-26-2017

Excellent advice by Brutal and Working

. Pif doesnt have to be 100% if you arent always able but the mentality of it is very important as it helps you established the good credit habit of paying on time and showing that you can use responsibly.

Anonymous · ‎04-26-2017

Ok, I will go over to rebuilding, because I am confused, PIF or carry balance? If I pay off before statement cuts, it doesn't really show use, so how does that help?

Anonymous · ‎04-26-2017

@Anonymous wrote:
Ok, I will go over to rebuilding, because I am confused, PIF or carry balance? If I pay off before statement cuts, it doesn't really show use, so how does that help?

The absolute MOST important thing for your right now, is to make every payment as required.

That said, if you're paying interest on these cards, you're using them wrong.

For example, let's use your Capital One card and say, hypothetically, that your statement for that card cuts on the 10th of the month.

Next month, on the 10th of May, your statement cuts showing a $100 balance. The most important thing for you to understand, is that if you do not pay that entire $100, before or by your due date, you will be charged interest on that amount. NOTE: this hypothetical assumes you don't have a balance from April.

So in May, after the 10th, you put another $100 on your card. So your total balance is $200, but your last STATEMENT balance was $100. So before the due date, you still need to pay that $100 in order to avoid paying interest. If you do that, and don't use the card again in the month, your June 10th statement will show a $100 balance.

Technically your PIFing (the previous month) and carrying a balance (the current month), but you're not being charged interest. Make sense? (Trust me, it's confusing at first, I get it).

In the rebuilding forum, the general advice is to have at least three revolving accounts, with one account reporting 9% utilization on one card and zero balances reporting on the others. This will maximize your scores.