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New to the forums but have reading and learning from them for a few months. I recently closed on a house in Feb, which was my orginial goal when I started this credit building process in July/Aug of last year. The whole Process really opened my eyes to the world of credit and I've become kind of addicted to improving my credit. I really don't know where to go from here though.
Background:
Income 50-55K/yr (gross)
Mortgage: 62K over 30 years at 4.0%
Car loan: $13,800/48 months left at 7.11% (credit was much worse when i purchased 2 years ago).
Student loans: 75K (multiple accounts) in deferrment because I'm back in school.
Capital One Platinum: 2k CL
Care Credit: 2K CL
Walmart Store Card: 5K CL
Credit utilization: 22%
Experian FICO 8- 704, 9 inquiries (3 falling off in Nov of this year).
Equifax FICO 8- 708, 8 inquiries (nothing falls off until 2017)
Transunion FICO 8- 675 15 inquiries (2 falling off in June/July of this year)
1 collections reported on all 3 bureaus from 2012 for $77 that was paid off in 2014 . (I know, I know, dumb and ignorant).
Student loans reported as 180 days past due in 2013, has been reported in good standing since the beginning of 2014 to present.
In July of last year is when I really started looking at things due to my desire to buy a house. I was in the low 630s/640s at that time, was in the 580s/590s at the beginning of 2014. I had never had an actual credit card until August of last year. Was preached to by my parents that if you didn't have the money upfront you didn't need it, and credit cards were nothing but trouble. I now know differently. So by suggestion of my loan officer in July I applied for a unsecured cap one platinum card and was approved for a 500CL. I also applied for a discover it student card but was denied. In nov of last year I had to have root canal but didn't have the money upfront so I applied for a received 2k from Care Credit which 900 was charged to. Since July Cap One has increased my CL from 500 to 1500 in Nov, then to 2K in Jan. Walmart CL went from 180 at the end of 2014 to 600 in Apr 2015, 1400 in Aug of 15, 1900 in Dec of 15, to 5K a few days ago.
I had though about refinancing my car loan to get a lower interest rate (currently 7.11%) scores were around 590-620 at the time of original finance. But I'm not sure if the lower interest rate is worth the HP. Potential savings over the remaing life of the loan (48 months) 850-1400 based on a interest rate of 2-4%.
'I'm also thing about asking for a upgrade on my Cap One platinum to a Cap One quicksilver one or quicksilver with a CLI, but will probably wait until the 3 month mark from my last increase or until my higher credit limit from Walmart reflects on my credit reports.
I was also considering applying for a second Cap One card, and possibly going on a mini app spree do build my credit cared portfolio since the only real credit card I have is the Cap One platinum. Is this a good idea or should I wait longer until some of those inquiries fall off? Or should I go ahead and try to build my portfolio considering I only have one real credit card then gardening for a year or two? And if so, which credit cards/store cards do you suggest I go after? I don't have any planned major purchases in the future so i would be ok with taking a few HPs and inquires to build my file if that is the course I should choose.
Lastly, I was considering hiring lexington law or someone similar to see if they could get the 1 collection off my credit reports. Is this something I should do, or is it even worth the try?
Any suggestions would be greatly appreciated, and sorry for such the long post.
Lexington Law doesn't do anything you can't do yourself; Rebuilding Your Credit still if you haven't gone down that route. You're not precisely cash flush looking at your outlay, I would do what I could for free honestly.
Don't discount $1400 when we're talking refinancing that auto loan, that's $1400 more you can kick to your student loan debt. When you have major expense, credit score is just there to save yourself money and speaking as another current college student with a recent mortgage and some income, defraying the expense exposure is kinda a big deal financially when I ran the numbers. Why spend more money than you have to?
Anyway I wouldn't be doing a full on spree, you could, but sort the things which you need your credit report for namely auto loan refinance, additional student loans if you need them, and set yourself up to be able to consolidate if needed later. Don't pick up frivolous credit when you have more important things to focus on... that said, a decent default spending rewards card wouldn't be remiss, but I wouldn't go whole hog down the tacking on tradelines path. From a credit perspective, the Wally and Care Credit cards count just as much as a bankcard under current models (read as any FICO algorithm worth caring about) so there's no need to do anything else from a credit perspective and in my opinion you have more important things use your credit for.