I need serious help, please!

[dre180]

Just wanted to say thanks to everyone for all their input. I did go ahead and apply for the walmart card, and got approved for it with a 500 CL (not the discover one however). I guess i'll have to start shopping at walmart now...

As for BoA secured, I am going to do that in about a week when I have some more cash to open the card with. Jamie, you recommended that I open the card with $1,000. Does this have to be done at initial deposit or can I open it with $500 and the follow it up with another $500 in a couple of weeks? Would it make any difference?

Lastly, in terms of utilization, should I keep all my cards usage at 30% of limit and pay in full? Is that the best way to keep a high score? Or does it not matter how much I charge as long as I always pay in full? Obviously I've never used a CC properly to this point, and want to make sure i'm doing so now. 

Thanks again for all the help. Hopefuly one year from today will be a whole different ballgame for me. I am looking forward to regaining control!

[jamie123]

Congrats! Hurray!!!! ( The crowd ROARS and comes to their feet as dre180 enters the Olimpic Stadium!)(Back slapping and high fives all the way around!)

All that worrying and for what? YOU ARE THE MAN!

Okay...Back to our regular scheduled programming.....

Walmart really is a good card. Make sure you sign up for electronic billing. They give you a free TU FICO score every month if you do! Walmart is also really generous with credit line increases. Some people see CLI every 4 months but YMMV.

It is perfectly alright to start the BoA card at $500 and you might decide to keep it there, but EVERY time you increase the deposit/credit line they will HP all 3 CRAs. If you go that route you might want to wait until you have 3 months of statements closed and reporting before increasing the CL. The only reason to have a higher CL is credit lines beget CL. When you apply for future NEW credit cards, the issuer will try and match your highest current CL.

When BoA graduates these cards to unsecured cards they USUALLY issue credit lines of $500 to $1000. People that have secured cards with $2000 CL get kicked down to $1000 CL when the card graduates. Some people go from secured $500 CL to unsecured $1000 CL. Some stay at $500 so this is really a YMMV situation.

The reason to go with BoA is that this is a PRIME bank and after several years of demonstrating good credit behavior this card could have a $5000 to $10000 CL.They WILL reward you.

BoA is terrible about letting you know if you have been approved for this card. After you apply they will give you the 7 to 10 day message. Watch your checking account, they will withdraw your deposit about 3 business days after your application date. That means you are approved. It will actually take 3 to 4 WEEKS after you apply to actually have this card in hand.

As for utilization....

You want 1 card to report LESS THAN 9% of its credit line. All other cards report ZERO. That is how you maximize your scores. Carrying balances above 9% has a LARGE NEGATIVE effect on your scores. The only time you really need to worry about maximizing your scores is when you are planning on applying for NEW credit or are watching your scores climb during rebuilding. Utilization has a HUGE effect on you scores! It doesn't matter how much you charge each month, it matters how much is REPORTED by your creditors a couple of days after your due dates!

Any questions?

Make sure you stop back to let us know how this turns out!

[dre180]

I do have a couple more questions. Thanks for bearing with me and my novice questions, I really do appreciate it...

So you're saying BoA does another hard pull to just increase the secured line? That seems crazy to me bt if that's the case i'll just open it with the $1,000 up front.

My main question again is regarding the usage for the cards. So I want 2 of the cards to report at a zero balance. 1 with <9 percent of the credit line. Pardon me if this is a dumb question, but I'm still supposed to be using all 3 cards correct? And again, it doesn't matter how much I charge on them as long as before the due dates hit, make sure I pay down the balances on 2 to zero, and the 3rd <9% correct? My point being being that I am just going to use the card to pay for stuff instead of cash. As long as the balances are paid before due date they high balance only reflects what is owed at that time when it gets reported. Is that correct?

[jamie123]

Yes, every time you increase the deposit/credit line on a BoA secured CC they will HP all 3 CRAs.

Okay....Pay attention, this is rather difficult to explain. I'll try my best.

This is the 21st century. You need to pay your CC balances online! Think of your CC credit lines like they are SHORT term loans, as if you were borrowing money from a friend. You really should NEVER use your credit cards to purchase something unless you ALREADY have the money to pay for it sitting in the bank! I know that sounds stupid, but all of us here on the forums have found out the hard way what happens when you don't have the money to pay-off credit card balances, that's why we are all here. There are many excuses as to why we got ourselves into these situations, but that's all they are, excuses.

USE YOUR CREDIT CARDS TO BUILD YOUR CREDIT SCORES AND NOTHING ELSE! THEY ARE AWESOME TOOLS TO BUILD HIGH CREDIT SCORES!

This is how you use them:

(You only need to be this rigid if you are rebuilding and want to see your maximum score OR plan on applying for NEW credit in the next month.Otherwise just make sure you pay in full every month BEFORE the due date.)

You can use your credit cards as much as you want during the month. Get in the habit of paying the balance down every week or two. It is really easy to do online. It usually takes a day or two to post to your account after you set-up the payment but then frees up that credit to be used again. Using your CC this way allows you to push through more than your CC CL in a month. Say you have a $500 CL. This is an example: Week 1 purchase $200, pay $200, Week 2 purchase $350 pay $350. You have just used $550 of credit in 2 weeks on your $500 card. That's pretty extreme, but you get the idea.

Okay..This is important.

The only time your monthly balance matters is when it is REPORTED to the 3 credit reporting agencies. (EQ, EX, TU) This USUALLY happens on your due date or up to 4 days after your due date for each of your cards.

So this is what you need to do:

You need to designate which card will be your reporting balance card. This card should always report LESS than 9% of its' credit line each month. You can change this amount by $5 or $10 dollars each month so you can tell if the new balance reported when you check your reports.

Several days BEFORE your CC due date you need to go online and pay the card's balance to where it needs to be. If it is a ZERO card you need to pay it in full, if it is your reporting card, you need to pay it below 9%. AFTER YOU SET-UP THIS PAYMENT YOU CANNOT USE THE CARD UNTIL 4 or 5 DAYS AFTER THE DUE DATE! You want it to report the balance you set-up before using it again! I know, this is a royal PIA!

You need to use your cards every month and pay them every month to build credit the fastest.

Any questions?

Was I clear enough?