Getting Started, Is this the right path?

Enyx · ‎07-25-2017

Greetings all,

Been lurking around for a while reading as much as I can and trying to take it all in. Gotta admit, it's a bit daunting!

Here is a bit of info up front about my situation:

I've got an equifax/tu score of 524 (CK) (7/27/17)
I have no Fico score to date
I have two derogatory marks. One on TU ($252) and both on Equifax ($252, and $28). Both are Medical debts (both set to drop in 2 years).
The $28 debt I have PIF and collector has agreed to delete (7/27/17) on the 5th of next month
I have made payment arrangements with the $252 debt (turns out it was total of $1.1k when I called them, which I believe now was a mistake)
I have two $200 CL Secured Cards (Discover IT and Capital One) $0 on both
I have a $180 CL FingerHut card with $53 balance

I have a few questions to make sure I'm starting to rebuild my credit properly and taking the right path after gathering as much as I could from the forums.

Experian has my DOB wrong (one year off) according to CreditCheckTotal, should I be worried about this? what should I do?

For my cards I am a bit confused. I have read that holding a utilization of 30% or lower, have read 9% or lower. Have read you should hold a balance only on one and leave the other two at $0. There's so much to take in I'm not really sure what's what. Can anyone help clarify HOW I should best use these 3 cards to maximize both my CL of them all, and more importantly my Fico/Credit score?

For the $252 Medical debt which turned out to be $1.1k, I sadly did not do enough research prior to jumping on this and did not get agreement to pay-for-delete. I will call call them tomorrow and see what can be done so it's recorded, but I do regret not reading more before calling them (or doing anything period). What is the likelyhood of them deleting if they've already got me agreeing to pay it off without that being agreed upon first?.

I would like to build my credit score as efficiently and effectively as I can. I am unfortunately pretty 'broke' working for only $11.70/hr and want/need to utilize my money as valuably and intelligently as possible while working my way up in life. I'm grateful i found this forum, but I fear at times I simply don't 'grasp' how to effectively do this with all the information pouring in.

Thank you for reading, and thank you in advance for any input/feedback you can give me to make sure I'm starting off on the right foot to getting my credit rating up.

Enyx · ‎07-27-2017

See original post, have updated with all relevant information (mod please delete this post if necessary, thank you!)

Anonymous · ‎07-27-2017

@Enyx wrote:
Update: I've also now applied and been approved for $180 CL Fingerhut account. After much reading I've made a purchase of around $50 ($80 w/ their shipping), paid the $30 and plan to pay off the remaining balance in 4 smaller payments as this seems to help with the graduate process.

Did I make a mistake in not buying enough? (will they seriously split $50 in to 4 payments of $12.50 or is that too low. I've read that paying it in full doesn't help your credit nor increase your CL and graduate so I feel like I need to do the 4 payments or it's all for not.
Any advice/input/feedback/etc is appreciated on any/all of these topics!

For your credit score, you want all of your accounts reporting $0 except for one which reports a balance of less than 9% of that card's limit. You can use your cards all you want, but learn when your accounts report (typically the statement ending date) and pay them down before that. Then make sure to pay any amount due on that statement by the due date.

One more card would help. You can go the secured route or probably unsecured subprime such as Credit One. Folks have really strong opinions about them. They have some goofy policies and high fees, but they started my rebuild off just fine. Stay on top of your account and payments and you'll be fine.

Lastly, do you have an installment loan? (mortgage, student loans, or car loan) If you do not, you should get a share secure loan to satisfy the installment mix of credit. Lots of info on it here in these forums.

Then keep attacking those baddies and you should be in good shape!

Anonymous · ‎07-27-2017

Also, where did you get those scores? The absence of Experian makes me think they are from Credit Karma, etc. If so, those are vantage scores which basically no one uses. (Often referred to here as FAKOs.)

You'd want to get your actual FICO scores either from here or the Credit Check Total $1 trial.

Enyx · ‎07-27-2017

Thank you for the responses! To answer your questions:

I have no installment loans (house, car, student, etc) I will definitely look into share secure loans now and read up.
I use CK you are correct. I'll do the $1 Credit Check Total trial and post back my actual scores/results.

Enyx · ‎07-27-2017

See original post, have updated with all relevant information (mod please delete this post if necessary, thank you!)

Enyx · ‎07-27-2017

@SteelerNYC I'm wanting to clarify. So for my Discover and Fingerhut, ONLY maintian 9% on a singular card at a time? So basically I've locked myself in to only using my FnigerHut card (since I already made a purchase) for 4 months in order to graduate. Only THEN should I start maintaining another card at 9%?. I was hoping to graduate with the Discover card sooner than FingerHut of course due to usability, have I locked/trapped myself in to Fingerhut only for now?.

Enyx · ‎07-30-2017

I've cleaned up my original post being more concise with my questions. I'd also love any feedback on the 'three card dilemma (only maintaining utilization on one at a time, but also trying to build CL with them). Would 'spinning' them be most effective. Maintaining $0 on 2 of 3, 4 months at a time in a cycle, etc.

Thank You!

Anonymous · ‎07-30-2017

@Enyx wrote:
I've cleaned up my original post being more concise with my questions. I'd also love any feedback on the 'three card dilemma (only maintaining utilization on one at a time, but also trying to build CL with them). Would 'spinning' them be most effective. Maintaining $0 on 2 of 3, 4 months at a time in a cycle, etc.

Thank You!

Hi Enyx, Steeler gave you accurate advice, but honestly, letting a small balance report on only one card is to "optimize" your score, and is a technique often used right before applying for a mortgage, other loan, etc.

To build positive payment history, it is a good idea to charge up to 10% of your credit limit on each card, then pay in full after the statement cuts. You need to show that you are using your credit and paying every month to begin with. 10% is even on the conservative side, but a good number to stay below for reported balances. If you go over 10% for some reason, by no means go over 30%, ever!

I hope this is helpful.

Enyx · ‎07-30-2017

Thank You @Bella007! So it is wise to use all 3 @ 10% until just prior to applying for a loan/mortgage/etc, that is very good to know! I have no intent to apply for any loans for about a year or two so I will use my cards @ 10% each (wait until reported, then pay in full after reported) until a loan is contemplated!

@Bella007 I see in your signature you have many cards. Since I do not plan to apply for a loan/car/mortgage/etc for quite a long time, is it even more beneficial to have more cards (along side perhaps a secured installment loan)?. I don't mind grabbing another secured card if need be if it's beneficial given my intent.

At what 'score' would you guys suggest looking to start looking to move beyond secured cards in to other/better cards (when my secured cards graduate?).

Thanks!