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Frequent Contributor
JPersat
Posts: 299
Registered: ‎05-28-2012
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Afraid to ditch subprime...

Now, I know my scores aren't anywhere close to perfect..but up from a midscore of 492 this past spring (I had no concept of what credit really was, or how to take care of it), I think I'm doing not too shabby. Anyhow, I/we have 6 "craptacular" cards, that have given us chances when no one else would..we have Credit One (never use, intrest is awful), Fingerhut (never use either, just for the $800 limit), Capital One (gets a fair bit of use, recurring expenses), HSBC (husband uses only for gas), and my BBRZMC & Merrick (online shopping only, destroyed the actual card). All are around $500 limit, and the ones that are used are PIF each month. We're in the middle of mortgage underwriting, and once we close, I'm going to want better cards. I'd like to ditch all of the ones we have (either close or SD until they're closed for us), and get something that has at least a $1k limit. I'm not concerned about interest, as we rarely carry a balance, and when we do, it's under $100. My AAOA is 3yrs, oldest TL is 10yrs. I have 10-12 inquiries on my TU (new car purchase this year, 7 from mortgage apps and I forget the others), 7 on my EX (all mortgage) and I don't remember on EQ. Anyhow, they're all explainable..it's not like I went on a rampant app spree for things that were unattainable.

 

Is it unreasonable to think I/we could get a Walmart (for free FICO), Chase Freedom and a Lowe's card? My husband's scores are a little better than mine..his TU is 657 (640 from the lender, different versions I guess?), EX is in the 650s and EQ in 630s.

 

It's kind of the "Well, I'm not good enough" feeling..


Starting Score: 492 02/12
Current Score: TU: 668 (FICO), EQ: 668 (FICO). EX: 651(lender pull 9/27/12)
Goal Score: 660



Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012
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Re: Afraid to ditch subprime...

First off if you're thinking about doing this DURING underwriting, bad idea! That said, It all depends on your annual fees, which unless I missed it I didn't see in the post. I would keep all until you have a prime card, they'll be happier about open TLs than closed TLs.  One you get a prime card, with no AF, then I would ditch the AF cards (as I'm gonig to do with my Cap1). The cards that have no AF, the best bet is to keep them and store them away and pull them out once every few months to make a small purchase then PIF, otherwise 10 years down the road your AAOA is going to die when all the cards fall off your report and you'll be wishing you never closed them.

 

Too much credit doesn't hurt you, the long positive credit lines with $0 balance that will stay with you forever, help your util, and will only otherwise benefit you.

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

NFCU VISA $17.5k / USAA AMEX $6k / USAA AMEX $4k / USAA VISA $4k / CHASE FREEDOM $3k / Capital One $500
Frequent Contributor
JPersat
Posts: 299
Registered: ‎05-28-2012
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Re: Afraid to ditch subprime...


seigex wrote:

First off if you're thinking about doing this DURING underwriting, bad idea! That said, It all depends on your annual fees, which unless I missed it I didn't see in the post. I would keep all until you have a prime card, they'll be happier about open TLs than closed TLs.  One you get a prime card, with no AF, then I would ditch the AF cards (as I'm gonig to do with my Cap1). The cards that have no AF, the best bet is to keep them and store them away and pull them out once every few months to make a small purchase then PIF, otherwise 10 years down the road your AAOA is going to die when all the cards fall off your report and you'll be wishing you never closed them.

 

Too much credit doesn't hurt you, the long positive credit lines with $0 balance that will stay with you forever, help your util, and will only otherwise benefit you.


Oh, no...DEFINATELY not. it's been too much of a pain in the ass to improve enough to qualify for a mortgage, I'm not gonna screw it up! I honestly think that the only one that charges an AF is Credit One, which we had waived this year. I've never noticed one with my BBRZMC or the Cap One. How long will a card be allowed to be "dormant" before a company closes it?


Starting Score: 492 02/12
Current Score: TU: 668 (FICO), EQ: 668 (FICO). EX: 651(lender pull 9/27/12)
Goal Score: 660



Established Contributor
Cdnewmanpac
Posts: 767
Registered: ‎01-16-2012
0

Re: Afraid to ditch subprime...

I think the point you are at is one of the most difficult to deal with. Below 620, you know the only choices are FP, creditone and C1, so you deal with it. But you aren't quite to the 680+ range where you start to get the intro cards from prime lenders (chase freedom, discover more, amex charge cards). There aren't really any products designed for this range (620-680).

 

Your scores may dip in the short term after your mortgage reports. The honest answer is that you are better off continuing with your current cards for 6 months after your mortgage, then applying for the freedom. You can probably get the walmart card with your current scores, but lowes and especially freedom are going to be a stretch. And you are likely to get lower CLs if you are approved. Since Chase usually requires HPs for CLIs, starting with a low limit can end up costing you more inquiries than waiting and getting an initial higher limit. Not sure about Lowes.

 

There is also the bigger question that doesn't seem to get asked alot on this forum (where we focus on the impact of various cards on our scores): what do you want to do with your credit cards? I see people here getting walmart cards just for the monthly score. But since the only real value in knowing a TU score is for timing a mortgage application (I know GE uses TU, but I'm unaware of any proven approval thresholds) and you will already have done that, does getting a number sent to you once a month justify opening a new line of credit? Think about how specific cards will benefit you financially, rather than just focusing on score impacts. If that still means Walmart, then you are probably safe to app for that once your mortgage closes. For the others, 6 months post. Then, when you actually have the cards you want, close the ones with AFs you don't want, sock drawer the rest and move on.

In wallet: Ink Plus 10k, AMEX TE 25k. In bag: CSP 16k, USAA WMC 15k, Hyatt 13k, United MPE 12k, AMEX HHonors 3k. In SD: Cap 1 QS 5k, Discover IT 7k. FICO 08 says my EQ is now 844, was 510 in 2010.
Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012
0

Re: Afraid to ditch subprime...


JPersat wrote:

seigex wrote:

First off if you're thinking about doing this DURING underwriting, bad idea! That said, It all depends on your annual fees, which unless I missed it I didn't see in the post. I would keep all until you have a prime card, they'll be happier about open TLs than closed TLs.  One you get a prime card, with no AF, then I would ditch the AF cards (as I'm gonig to do with my Cap1). The cards that have no AF, the best bet is to keep them and store them away and pull them out once every few months to make a small purchase then PIF, otherwise 10 years down the road your AAOA is going to die when all the cards fall off your report and you'll be wishing you never closed them.

 

Too much credit doesn't hurt you, the long positive credit lines with $0 balance that will stay with you forever, help your util, and will only otherwise benefit you.


Oh, no...DEFINATELY not. it's been too much of a pain in the ass to improve enough to qualify for a mortgage, I'm not gonna screw it up! I honestly think that the only one that charges an AF is Credit One, which we had waived this year. I've never noticed one with my BBRZMC or the Cap One. How long will a card be allowed to be "dormant" before a company closes it?


What do you mean remain dormant? If you close the cards, they will not be dormant, but will remain on your credit file for 10 years from the date of closure, lowering your AAOA as one of your older timelines fall off. However, the moment they show up on your credit report as closed, it will drop your available credit and effect your utilization. The best thing is to keep them open if there's no AF (or if you can waive the AF year after year) and let them sit in a sock drawer as open unused credit cards from here on out.

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

NFCU VISA $17.5k / USAA AMEX $6k / USAA AMEX $4k / USAA VISA $4k / CHASE FREEDOM $3k / Capital One $500
Frequent Contributor
JPersat
Posts: 299
Registered: ‎05-28-2012
0

Re: Afraid to ditch subprime...

I mean not using them...leaving them lay in a drawer somewhere. If they're not used, how long until they're closed?

 

And as far as the cards go, I'd like the walmart one for the gas discounts (in addition to the monthly fico), since there's one right down the road from where we will be living. I think they offer 10 cents off a gallon during non-promotional periods.


Starting Score: 492 02/12
Current Score: TU: 668 (FICO), EQ: 668 (FICO). EX: 651(lender pull 9/27/12)
Goal Score: 660



Moderator
Revelate
Posts: 9,477
Registered: ‎12-30-2011
0

Re: Afraid to ditch subprime...

[ Edited ]

I think you can do better, the Credit One is really doing nothing for you and are you sure that their fees are waived for you?  All the pre-approvals I keep getting from them are laughably ugly when it comes to their fee structure.  I'd close it and not look back honestly.

 

I don't agree with cdnewman's analysis in this case (though I usually do FWIW), there are plenty of cards around the 640-660 mark which you appear to be at.

 

Amex entry charge card (Green)

Chase Freedom

Walmart (really it's below this anecdotally, if you shop there it's worthwhile I think, maybe for the FICO alone depending how you value that personally).

 

Get through closing, take a break, and  when you come up for air take a look around and figure out what your spending pattern is going to be post mortgage (need home improvements in the future for example?) and then come up with the cards that make sense for you over the next year or so and pick one or two.... I wouldn't go wild because as CD does correctly state, 680's a different place from a credit perspective but that's probably a little bit off for you (and me) in the future so pick a card which works for you while you get to that point and are in range for the better cards commonly discussed on these boards.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Frequent Contributor
JPersat
Posts: 299
Registered: ‎05-28-2012
0

Re: Afraid to ditch subprime...


Revelate wrote:

I think you can do better, the Credit One is really doing nothing for you and are you sure that their fees are waived for you?  All the pre-approvals I keep getting from them are laughably ugly when it comes to their fee structure.  I'd close it and not look back honestly.

 

I don't agree with cdnewman's analysis in this case (though I usually do FWIW), there are plenty of cards around the 640-660 mark which you appear to be at.

 

Amex entry charge card (Green)

Chase Freedom

Walmart (really it's below this anecdotally, if you shop there it's worthwhile I think, maybe for the FICO alone depending how you value that personally).

 

Get through closing, take a breather, and thwn when you come up for air take a look around and figure out what your spending pattern is going to be post mortgage (need home improvements in the future for example?) and then come up with the cards that make sense for you over the next year or so and pick one or two.  

 


I haven't noticed their bullsh*t $7 something a month charge on it for the annual fee this year. I'm fairly certain that my husband was able to get the APR lowered (just for 6 months, but it's been at a 0 balance since then) and the AF waived for a year. Back in the land of the 4 and 500s, I didn't care too much about the $7 a month..I was just happy to have a card. Nowadays, though..that could be a nice hot starbucks coffee treat :smileyhappy:

 

Lowes would be a plus because I have a few things I'm itching to do to the house. It's turn key, so I don't have to do them right away, just somewhere down the line.


Starting Score: 492 02/12
Current Score: TU: 668 (FICO), EQ: 668 (FICO). EX: 651(lender pull 9/27/12)
Goal Score: 660



Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012
0

Re: Afraid to ditch subprime...


JPersat wrote:

I mean not using them...leaving them lay in a drawer somewhere. If they're not used, how long until they're closed?

 

And as far as the cards go, I'd like the walmart one for the gas discounts (in addition to the monthly fico), since there's one right down the road from where we will be living. I think they offer 10 cents off a gallon during non-promotional periods.


ah ok, gotcha... Depends on the bank, from on the forum people suggest making a purchase every six months or so to show activity, some banks don't ever require you to make a purchase, but some do... so make a purchase, maybe groceries or gas one day, then pay it off as soon as it posts, then wait 6 more months and do the same.. 

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

NFCU VISA $17.5k / USAA AMEX $6k / USAA AMEX $4k / USAA VISA $4k / CHASE FREEDOM $3k / Capital One $500
Senior Contributor
youngandcreditwrthy
Posts: 6,242
Registered: ‎08-16-2012
0

Re: Afraid to ditch subprime...

Walmart and Lowe's are fairly easy to get... I'd guestimate you'd be approved for $500-$1000 on either.:-)
Then after six months to a year, you might app for a prime card, like Freedom/Disc/Amex
Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| Wmt Discover $12.5k | BR Visa $12.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Arrival $12.7k | Smile Gen $7.25k | Dillard's $10k | West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k

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