Please Offer Me Your Insight!! Kinda Long, But Bare With Me!

[Anonymous]

First, a bit about my financial history. Other than approximately 11k in Federal Stafford Loans, I have only 2 other sources of debt. Two loans from a local bank open in 2006, one for $500 and another for $2700. The $500 loan has been paid to a zero balance years ago and only $600 remains on the larger. I have never missed a payment or even been late for a payment. My second source of debt is a foolishly opened Best Buy account. The Best Buy account I recently opened (not even a month ago) had a $2000 limit and I purchased a TV and a Playstation 3. I nearly maxed the thing out... More on this later.

Ok, on to the credit card bit. After mulling over rewards for days on end, I finally decided upon the Discover More credit card which allegedly requires no past credit. I applied online only to find out I was declined. Needless to say, I was shocked as I've never had a major credit card before and I've never missed a payment with my normal loans. I haven't begun repaying my Federal Stafford Loans due to the fact that I have not graduated yet. I quickly paid $32 to have both of my credit scores reported to me from Equifax and TransUnion to find out what was going on and why I was declined. My credit scores were 717 and 652, respectively.

I called Discover to find out what was going on and it turns out that they pulled my TransUnion score (652) and not my Equifax score (717). The lady told me that a large problem was the fact that I had a 97% utilization rate on my revolving debt (Best Buy account). To dig even deeper, I noticed two things. 1) My loans from the local bank which, other than the Best Buy account and my student loans, is my only real source of credit history was NOT included in the TransUnion score for some reason. 2) The loans from the local bank WERE included in the Equifax score, however, my Best Buy Account was not. Hence the very big difference between 652 and 717.

I immediately took action. Since I was still within the 1 month exchange period, I immediately returned the television and brought my Best Buy account down from a balance of $1952 to that of $480 (Credit Utilization rate of 24%). I realize this should help tremendously.

The I want to know is how long will it take for that significant drop in account balance to reflect on my TransUnion score and how can I have them include my local loans which I have been so diligent with in my score? The only thing the Discover lady was able to tell me was pay down my revolving debt (which I did today by returning the television) and that my application would remain with them for 30 days and to check back if I made any headway. I realize applying for credit cards inquires on my credit, thus affecting my score, so I don't want to just keep getting shot down. Especially since I have already corrected a potentially very bad mistake (I returned the television).

I realize this is a complicated scenario, but any insight anyone could offer would be greatly appreciated. I'm not wanting this credit card to max out like I stupidly did with Best Buy (thankfully I was able to take it back) but instead just a means for increasing my credit score further in the interest of a looming car purchase coming in probably the next 1 to 2 years. Plus, I just want to earn rewards for the some odd $400 dollars of groceries and living expenses I just put on my debit card right now.

What do I do?

Thanks so much!

[marty56]

Most CCCs report your balance when the statement drops.  Some are slow to report a 0 balance but since you are revoloving a balance, the util change should show up probably within a week from the date that your statment drops.  if they report at the end of the month, the same thing would apply.

[JBoswell]

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@Anonymous wrote:

I immediately took action. Since I was still within the 1 month exchange period, I immediately returned the television and brought my Best Buy account down from a balance of $1952 to that of $480 (Credit Utilization rate of 24%). I realize this should help tremendously.

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First of all, I am impressed that you'd bring back the big screen TV to repair your credit. I think if my husband had ever needed to return our TV he would have committed hirikiri in the front yard lol.

That said, CCC usually report at the same time every month, when we paid ours down to $0 we saw it about 14 days later on all of our reports, you should be fine in seeing the result within the 30 days they are saying they'll hold onto your credit card application.

As for the loans, you can contact the issuer and ask them to report to all three bureaus, we had a capital one that was only showing up with TU on my report, writing them and asking them to report to all three worked just fine. I suppose you could also contact the CRA and have them try to add it, but I think it would be a lot easier to just go though the OC, that could take a little longer than the 30 days though, I've heard that sometimes they wont report "new" things for up to 60 - 90 days, however we saw results within a few weeks I believe. Hope that helped. Good luck!

Message Edited by JBoswell on 04-09-2009 07:21 AM

[Anonymous]

Thank you so much for your insight!!  I will miss that television dearly, but it just wasn't in the cards at the moment for me.  I'd rather save for a few months than take a big credit knock for having a maxed out retail card.  I love learning things without having serious consequences (i.e. being able to return it).

Anyway, what is the "CRA" and "OC" you were referring to?  The loan officer or just the lending department in general of the bank?

Thanks again!

[JBoswell]

 

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I suppose you could also contact the CRA [Credit Reporting Agency - meaning, Equifax, Experian, TransUnion, etc..] and have them try to add it, but I think it would be a lot easier to just go though the OC [Original Creditor - meaning, whoever you got the loans from the local bank through], that could take a little longer than the 30 days though, I've heard that sometimes they wont report "new" things for up to 60 - 90 days, however we saw results within a few weeks I believe. Hope that helped. Good luck!

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Hope that helps! Took me forever to figure out all the fancy lingo lol and again, Good luck with everything!