Credit Cards

[Swoosh60]

I could use some advice in bringing up my scores and need a "game plan."  My 4+ year Ch. 13 bankruptcy was just discharged 3 days ago (see me smiling   Anyways, I've been very slowly cleaning up my "baddies" incurred while I was in the Plan (hard to keep up with some of my bills during that time because of a) paying my Trustee and b) paying mega child support.  Now, my child support also ends after one more pay period (my youngest graduates HS).  So ... whew ... TU was 619 at its highest about a month ago ... down to 603 now due to high UT (I had one CC during my Plan, with Orchard Bank, a $400 limit), and my husband added me as an AU and his cards are kinda high right now.  So, with my new found "wealth," I am paying down the AU cards, but thinking of getting 1 or 2 off my reports because they're hurting more than helping me.  Am I right (at 93% UT)?  Even if it's an AU, FICO still is counting that right?  I suspect when that's off, and I just PIF my OB card, that will help some.  I had 3 collections deleted from TU and EX this past month (prior to that many more).  Still have 7 left on TU and 8 on EX (only several on EQ).  I'm going to do some PFD's and such to continue with the baddies. 

After I ditch the AU account that's dragging my scores down, and OB updates to $0, should I start to apply for anything new (CC's)?  I have NO need to use any new credit at all, but want to obtain some to start to boost my scores.  Also, does having OB at 0% count as much as having a larger credit lined card at 0%?  I read on another board that the small sub-prime cards don't really help your utilization ... is that true?

My income is great right now, job stable (6 years), etc.  Just need some direction.  Not planning on a real "need" for credit until late 2008 (may be buying a new car then), but it would be joint with my husband, who has scores in the mid-upper 700's, so I'm not too worried there.

Any advice ... I know this is long ... is MUCH appreciated!  Thanks!!

[HouseHunter]

I don't know much about BK except that my aunt and her ex-husband filed BK three times during their marriage and the first two times,  they bounced right back like it was nothing with tons of new credit and prime CC's.  I've never understood it.  It's almost as if they got rewarded for racking up debt and then saying to heck with it.  It's not as though they came upon bad times and were forced to file because of a life altering event.  They had an excellent HHI, they just didn't know how to live within their means and manage their money or their credit. 

So based on their history, it would appear that getting credit post BK would be a breeze.  Maybe they just got lucky...I don't know but they sure made it look easy.

Based my my experience, subprime cards may not help much with utilization but they definitely help with re-establishing credit when used responsibly.  They serve their purpose and then when you've moved on up the credit ladder, you can let them go.  They are a necessary evil, IMO.  Sometimes we just have to pay the piper.

[haulingthescoreup]

If you're not in a burning hurry for credit, I would suggest visiting credit unions in your area. Explain your situation, and that you're interested in building good credit now. Many if not most CU's pull EQ, which is handy since it seems to be your cleanest. They might want for you to establish a savings account or something there first and make regular deposits for a while, but the hope would be that they will give you a secured card with a decent CL and let you get some good, clean history of your own going.

If you can avoid the subprimes, that will help. If you do have to go with them, I would try Orchard first. Avoid cards with monthly as well as annual fees, cards that charge you to pay your bill online (!), and other slimy practices.

Before doing all this (especially before visiting the CU's), I'd get your util way, way down on one or two AU cards, and drop off the others. Stick with the oldest cards with the cleanest history. Allow time for all the accounts to report the new balances to the credit bureaus, and then allow more time (2 weeks ought to do it) after the last card updates for the credit bureaus to post all the new balances. At that point, when your scores are primed, pull your EQ FICO here (all 3 would be better), print them out, and take them with you when you visit CU's. Tell the lending officer that you don't want them to pull your credit now, but from these scores and reports that you are providing, what would their suggestion be? If you have local banks that have the authority to make decisions without running everything through some out-or-town corporate office, you can do the same with them.

[Swoosh60]

Thanks for the replies!  To haulingthescoreup ... ironically I just got a credit card application in the mail yesterday from WAMU (Washington Mutual).  Now, it's not a pre-approval ... and I'm not going to apply until I've got my husband to take me off of the one AU that's at high utilization right now, and my scores update (also with my Orchard Bank reporting at $0), but once my scores are back up ... would this be a good card to apply for?  Is it considered subprime?

Also, I'm just curious ... WHY did I suddenly get this in the mail 3 days after my Ch. 13 discharge.  Do these CC companies buy lists of people with new discharges (figuring they won't default because they can't refile for awhile)?  I haven't gotten a credit card appl in the mail in years ...

Also I've "opted out" on my CRAs, so I thought I wouldn't get these things anyways?

Your thoughts?  Thanks again!

[haulingthescoreup]

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Swoosh60 wrote:

Thanks for the replies! To haulingthescoreup ... ironically I just got a credit card application in the mail yesterday from WAMU (Washington Mutual). Now, it's not a pre-approval ... and I'm not going to apply until I've got my husband to take me off of the one AU that's at high utilization right now, and my scores update (also with my Orchard Bank reporting at $0), but once my scores are back up ... would this be a good card to apply for? Is it considered subprime?

Also, I'm just curious ... WHY did I suddenly get this in the mail 3 days after my Ch. 13 discharge. Do these CC companies buy lists of people with new discharges (figuring they won't default because they can't refile for awhile)? I haven't gotten a credit card appl in the mail in years ...

Also I've "opted out" on my CRAs, so I thought I wouldn't get these things anyways?

Your thoughts? Thanks again!

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Opting out only prevents contact by companies that you're not already with. Are you AU on a WaMu card? Otherwise, opting-out stops most stuff, but some occasionally sneak through.

We've had an awful lot of members here get burned on WaMu pre-approvals. The way that these mailers work is that they buy lists (as you mentioned) of consumers who fit certain basic criteria. Some companies like WaMu use very broad guidelines, so many who bite on the pre-approvals get shot down. WaMu is sort of quivering on the edge of prime-ness, IMO. Many people have them and love them, but sometimes they seem a bit squirrelly. So, at least in my eyes, they're neither prime nor sub-prime. They are starting to offer better cards recently, so they might be trying to shine up their image.

Again, I'd check out local credit unions. CU's aren't in it for the money, and they are generally happy to work with those who are genuinely working on getting their credit lives back. I will keep some of my bank cards, but my real money is with my CU cards!