$450.00: Pay Midland or Open New SecuredCard Account

[Oyiwaa]

Hello,

I have been rebuilding my files for a while now.  There have been many successes along the way (2 PRs deleted;  3 COs removed; 3 critical addresses removed even by Experian; 2 PFDs accepted) thanks to this board  have the following on my CRs:

• 1 paid State Tax Lien - since 2011
• 1 Midland account with a balance of $400
• 5 paid collections - recent payments after repeated refusals to PFD - but thought I will just pay since they all totalled about $1000 and I will be applying for a mortgage soon  (Now, trying GWs to get them removed) - most of these were paid in the last two months.
• 1 Charge-off / settled for less than full-balance(HSBC) Card - paid since 2010
• 1 Suntrust Auto Loan - paid since 2010 (but with a lot of derogatory information, including repos)
• CapitalOne Secured Card (Opened in 2010 - Limit of 700): Balance = $0
• WellsFargo  (Opened in June 2012 - Limit $350):  Balance = $20
• OpenSky Secured Credit Card (Opened in 2011 - Limit $350):  Balance = $0

I am hoping these recent payments and low balances will help my utilization and score.

Now, I have an extra $450 from my tax return. What is the best way to use this:  should I:

1.  Open a new secured card with Bank of America?

2.  Increase the limit on of the secured credit card accounts ? ) 

3.  Go to the strip club and celebrate for paying down my balances :-)

Thanks for your thoughts ......

[DiabolicallyRandom]

If I were in your situation I would use it to pay Midland. If you are considering getting a mortgage you would most likely be required to pay it before closing anyways. You already have 3 cards to establish positive credit and getting another would add another inquiry and another new account. It would lower your AAOA and add a new inquiry, most likely resulting in two score dings. There is a general rule of thumb not to app for anything at least 6 months before mortgage app'ing.

[guiness56]

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@DiabolicallyRandom wrote:

If I were in your situation I would use it to pay Midland. If you are considering getting a mortgage you would most likely be required to pay it before closing anyways. You already have 3 cards to establish positive credit and getting another would add another inquiry and another new account. It would lower your AAOA and add a new inquiry, most likely resulting in two score dings. There is a general rule of thumb not to app for anything at least 6 months before mortgage app'ing.

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+1

Plus I hear Midland will do a GW after payment.

[Oyiwaa]

Are the chances for GW better with full payment or settlement ....?

[guiness56]

Probably full payment.  They can be difficult at times.

I would search the fourms and see what you can find.