550 FICO score - what next?

[fishbjc]

Do NOT pay attention to any score coming from Credit Karma.  It's a FAKO and it's really B.S.

[thomasjm99]

I would start a GW campaign on the paid/settled Collections as well...  Since you paid them, the older they get the better off you will be but having them removed is always the ultimate goal.

Speaking from experience, Capital One will let you back in even if you had a CO/Collection with them in the past. Give it some time after your secured card reports (it's what I did...) and they will probably approve you for QS1 and a Platinum card.

I, too, prefer to pay cash for everything but when you try to buy a car or a house and your credit is a mess, it's really hard. Keep reading these forums and follow the advice of the knowledgeable folks here and over time things will be looking much better!

[Grafton88]

floweryu,

Don't despair.  You are actually in a better position than you think.

You now have a very good paying job.  You have managed to pay off your debts.  Sure it looks bad on your FICO scores but you have the satisfaction.

Life has given you a hard lesson.  You will be stronger after going through this.

Now I see you have your first secured credit card.  You credit scores will build on that one and your next one.  Try to get a secured card with a high enough balance to rent a car.  Most car rentals will want an extra $100 cushion on their hold.  A credit union might be the best bet.  I started one for $1000 at my CU.

Make sure your credit report is accurate.

One thing that I am doing is setting aside a cash reserve.  

Good luck.  Many of us have been in your same position.  It just takes time and effort to recover from this.

[trant3]

Dont give up, I was in your shoes in 2013 after losing my job. Had over 6 CO's and most sold to CA which did double the damage. However, I worked hard on rebuilding and now my scores are hovering 700 with prime lenders extending credit to me. Time is key and will heal the damage as long as you do whats needed. Meanwhile trying to GW those negatives off your report. I had portfolio delete two collection tradelines 2 years ago, but I've heard they're more strict with those now but worth a try.

[floweryu]

Thank you all! I will start with $300 secured card and check occasionally if I am pre-qualified for CapitalOne. I will increase the limit to $1000 within a couple of months and that will hopefully raise my score a bit.

[floweryu]

An update : I got my Wells Fargo cc and it is already reporting with Experian and I got a 55 point score increase! A huge relief (I purchased the score from Experian and it's FICO score). I will wait for a while and then increase the limit and hopefully get into 650 range soon. Also, the cc is reporting as a regular cc. There is no mention of secured on the credit report.

[Anonymous]

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@floweryu wrote:
An update : I got my Wells Fargo cc and it is already reporting with Experian and I got a 55 point score increase! A huge relief (I purchased the score from Experian and it's FICO score). I will wait for a while and then increase the limit and hopefully get into 650 range soon. Also, the cc is reporting as a regular cc. There is no mention of secured on the credit report.

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You normally get a score boost from your first and second cards reporting. I would suggest a second secured card through SDFCU. And possibly a secured loan if you do not have an auto, student or personal loan. It helps your scores to have one installment account. SDFCU has a combination secured card/loan deal for $500.

[Anonymous]

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@floweryu wrote:
An update : I got my Wells Fargo cc and it is already reporting with Experian and I got a 55 point score increase! A huge relief (I purchased the score from Experian and it's FICO score). I will wait for a while and then increase the limit and hopefully get into 650 range soon. Also, the cc is reporting as a regular cc. There is no mention of secured on the credit report.

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Just so you know, increasing your limit does not help raise your scores. It can help with UTI% if you're carrying balances, but other than that its does not add to scoring.

[floweryu]

THanks for the information! WF secured is my only CC for now and increasing CL would help with utilization because $100 balance is 33% utilization. I am paying as soon as I spend the money, but it would be good to have a higher limit. I don't meet the criteria to join SDFCU or any type of government/navy CU. Any other suggestions? I would like to raise my score up to 650 or so and then I would have to wait for my negatives to age and have less impact.

[Grafton88]

I would check your Yellow pages.  I am a member of NFCU but I also want to join One Nevada credit union for another secured card.  I found it by looking up credit unions in the phone book.  All you have to do is be a local resident.  See if there are any CU in your area that have simple enrollment requirements..