Help on Credit Reconstruction

[Anonymous]

Hi Everyone Have been following this board for a month or so and am greatly appreciative of the advise and guidance on here. I am in the middle of a tricky financial situation and would like to see if anyone has any advice for me... Let me start by saying my income and DTI would be fine for any sort of loan. My scores are pretty low, TU has a old tax lien on it which drops it to about 50-60 points below what EXP/EQF are reporting. TU=575 EQF=610 EXP=620. I have 2 open car loans which have never been late but no other open tradelines No BK No lates of any sort over the past 4 years. There may be a small CAP1 or Prov chargeoff from 5-6 years ago. I'm getting ready to run through a refi and ideally need to get a hold of a unsecured card or 2 - CL isn't important, just wanting to bump my scores. I read through numerous posts on here and thought with my scores (from myfico.com which matched almost exactly to what each individual bureau is reporting) that I would be able to get a small CL from of of the following places: Patelco, JFCU, CCCU, Nasa FCU, WAMU, or HSBC (would have thought Juniper also, but my TU is my lowest one) I applied to Patelco this morning and was shot down - I knew it would be close with them. HSBC did a soft pull and pre-approved me, but I've heard they may do a hard pull with a turn down. So at this point, what would everyone recommend? Again, I'm sitting at TU=575, EQF=610, EXP=620 Should I give the CU's another shot? JFCU or NASA? Should I try the HBSC/WAMU? Or just bite the bullet and go through Premier/Orchard/CAP 1 Household?? Thanks - I appreciate the advice in advance

[unknown_entity]

Try Credit One Bank and Cap One.  I am not a fan of the HSBC family or Premier Bank, the fees are to high and the CS leaves to be desired.

[Anonymous]

Hi matt and welcome to the forum!

That tax lien is a killer...I should know. Do NOT apply to any ccc that is reporting a charge off on any CR. In all intents and purposes, you are blacklisted from them.

I would suggest going with a CU. I think Justice would deny you, so IMO you should not even try. You might want to consider CCCU. Or even better yet, a smaller, local CU in your area. You could go visit them and have a face to face interview, and let them see what type of person you are.

You want to minimize the number of places you apply, to avoid the inq's that may result in a decline. I would not apply to prime banks(WaMu, Juniper, etc). Amex and Discover is out of the question, IMO.

Why have you ruled out a secured card? They are a great thing to have to help you rebuild. Many CU's offer secured cars.

I'm sure others will chime in shortly with their opinion.

[Anonymous]

Thanks for the replies Sylvia - I haven't ruled out a secured card at this point. My tax lien is wreaking havoc several ways - it's the old Catch 22 in that if it wasn't there I could qualify for LOC and credit cards, but to get it removed I have to have credit. Since I'm going through a re-finance, the inquiries aren't going to drop me enough to not qualify, but I do need the monies for any unexpected expenses during the refi. Otherwise I'd be fine with paying to have the lien removed I'll probably try CCCU this afternoon and see if that goes anywhere

Message Edited by matt3480 on 03-31-2008 11:46 AM

[Anonymous]

Please let us know how it goes. I'm keeping my fingers crossed for you!

[Anonymous]

Well, CCCU didn't auto-turn me down but I'm not sure if they auto-turn anyone down. :-) I thought I may get lucky with Juniper if they pulled my Experian, but no dice, they pulled TU. I'm going to call and see if they'll reconsider the application Otherwise I think I'm in a hole (granted a hole I dug)

[Anonymous]

I'm not sure why I've never seen this mentioned in this forum, but I learned of this many years ago. I didn't do it, but this passt year, when my brother was rebuilding his credit, I told him about this quick fix. He did it and it bumped his score about 50 points. It's easy, quick and I've never heard of anyone not being approved.

Go to the bank or CU that you bank with.  Open a 6 month, $500 (or other amount) CD.  Then, open a new loan with them for the amount of the CD, with a 6 month term, pledging the CD as collateral for the loan. Since they hold the CD, I've never heard of a bank refusing to do this. They have no risk. Just be sure that the loan is for the amount of, or less than, the CD and that time limits match. (6 month CD=6 month loan, etc.)

Now you have a new installment loan from a solid banking institution on your credit report. Now, this is important:  Do NOT pay it off right away. On the fifth month, it's okay and it will show you paid a little early. That's not a bad thing. But if you run right in during the second month and pay it off, you haven't done yourself a favor because it doesn't show that you can make payments on time over a period of time.

After you've paid off the loan, do what you want with your CD which, by the way, has been earning interest for you during this time, albeit a small amount these days. Roll it over, cash it in, or pledge it against another loan and start the whole process again.

[Anonymous]

Updates...

Verified fully that my scores are 610-640-620.

Turned down on CC's the past 2 days from Patelco, Juniper, and WaMu. Most likely due to not having any revolving credit lines, just auto loans.

When I opened a Chase bank account several months ago the manager took me aside and gave me the big presentation and talk about how Chase was committed to being a true hometown bank who could take care of all my needs with a personal touch.

Now that I NEED a cc to clear some attorney's fees to make the IRS go away, I thought I push Chase a bit since apparently I easily qualify for a mortgage but not a card, Chase pre-approved me in 15 minute for the mortgage, but I've delicately put it to them that if they don't issue me a cc, I won't do the re-fi with them.

So know I'm waiting on a callback from the manager as to what they're willing to do.

If this doesn't work, I guess my next stop will be credit one or orchard