My credit journey .. Would love some advice!

[Anonymous]

I made the mistake of letting my school loans default resulting in a bad credit number. Another issue I had that I had never realized was hurting me was a lack of revolving credit. As a 30 year old I am now realizing how importaint it is to actually have revolving accounts to establish your credit history. When I was younger and having destroyed my credit with my student loans I figured that i'd never be able to even get a credit card and decided to ignore the fact that my credit was bad. This year I decided to rehabilitate my student loans and get them out of default and work on increasing my credit score. I also had 3 items in collections outside of the student loans which total in $640 worth of debt that I paid for delete. 

In April I came accross some inheritance and decided that we needed a second working car and had planned to just buy a car with the money as I knew my credit score was way to bad to even consider being financed through a dealership. I went to a Mazda dealership and fell in love with a car there and was ready to buy the car when they convinced me to finance it. I of course was embarassed and had to explain to them my credit score was probably really bad. To my shock that didnt stop them from getting it financed!! They spent two days going back and forth with the bank in order to coninvce them it was worth giving me a shot. I was able to get it financed with only a 4% interest rate through JP Morgan / Chase. I also at this point found out that my credit score was only 508. I decided at this point I had been given the opportunity to really work on my credit not only by making these car payments on time (which I have every single month), but by cleaning up my student loans (which I have started). 

I have now managed to get a CapOne Secured card ($200), CapOne Plat ($500) and CapOne QS1($500). I have been working on my credit since April and have only managed to go from 508 to 570. I have really debated on applying for new credit cards but im afraid of having more HP done on  my account. I have debated on if its worth it to get a Credit One account not to use but to increase my CL  as im afraid of rejections from other lenders. I have seen many people on here get thier credit points up faster in 6 months then I have managed to accomplish and Im worried that maybe im going about this in the wrong way. 

I welcome any advice on something I may be missing out on that will help me be more succesful in my journey. 

[jpope1294]

Glad to see you are on the right track.  I am going to put in my two cents and it is my opinion based on my experience.  You have done quite well in moving your score to 570.  I have opened new tradelines and been paying on a car since Nov 14 and my score is still in high 500's.  

As others have convinced me, stay away from Credit One.  For one if you get a cli they charge you $24.95.  Second, they charge you monthly which is the annual fee broken up.  I have reviewed my statement and I have paid more in interest and fees than I have actually used for credit.  I will be paying off and closing from the advice of the more experienced people here.  Now that I am more aware of fees and interest, I have a hard time throwing that money out the window.  So good bye to Credit One.

I think your Cap One cards will grow with you, especially if you use and pay off.  I started at the $300 limit and now my QS1 is at $850 and Plat is at $1,100.  Both cards I have had about a year.

Patience is the key to increasing scores.  I know I get tempted to apply for new credit, but I have to remember is it worth a hit to my score.  Most of the time the answer is no so I resist and stay in the garden.  Especially if there is the chance for rejection.

Keep moving on this journey.  Good luck!!

[EAJuggalo]

How old are the Cap One accounts?  If it's been longer than 3 months and you've made all your payments I'd ask for a CLI.  Maybe try for a Walmart card, or Amazon card.  But stay away from Credit One at all costs.  Look for another secured lender if you really feel you need something else but those two unsecured cap ones are a good place to start.  You're doing everything right, get everyone paid, three revolving accounts and an installment loan.  Time will take care of everything else.

[Anonymous]

My secured card is about 8 months old and the 2 unsecured cards are now about 1 month old. Is it worth trying to find a retail card to put my foot in the door with that? I did end up with a few inq on my credit when I bought my car as they throw your information out to a bunch of lenders to see who will take on the loan. I have read things like getting credit through someone like Fingerhut is a good idea but I have also read that they decrease your limit randomly if you dont spend with them in a certain amount of time. Has anyone had experience with companies like this. 

[EAJuggalo]

I don't think you need to open new lines just to have more lines.  If it's something you're going to use and someplace you shop anyway I'd say go for it.  Unless you're planning something big in the next year, either a new car or home, I wouldn't worry too much about the INQs.  In your place I would sit tight for a few more months, get the CLI on your two Cap One unsecured cards then start looking for another card so that you could get rid of the secured.

[stellar]

You're doing great.  Knowledge is power. 

You have everything you need to get a great FICO score (3 credit cards and an installment loan). Work on any remaining baddies.

If you feel you want another card for whatever reason, go to the credit pulls database to see what scores ppl are approved/denied with.

Also, you aren't likely to be approved for much at that score, so it's best to wait.  Secured cards that graduate and have no/low fees would maybe be a good option to get your foot in the door with certain banks/credit unions.  Good ones are: BOA, USBank harley, citibank etc...  I would ask for advice here or read more threads about secured cards before applying.  Credit one and Fingerhut are not good options.

If you get rid of baddies and just wait (pay on time and keep utilization low) then your score will rise and in 6m-1y you'll be in a good spot.

Also if you can get in with Navy Federal Credit Union via military connection-def do that!  They have a great secured card.

And if you pay a chunk off your car loan (down to 90% or 75%) your score will jump up.

[Anonymous]

Ty guys for the encouraging words and the advice. It has been very uplifiting to be told im on the right path. I have my car almost paid down to 75% by maybe 2 more payments. I am looking to hopefully buy a house in the next year as I feel like renting is continuing to throw money down the drain and I feel it would be nice to own a home I can call my own. This may sound like a dumb question, but what is the differences in Credit Unions vs regular banks ie Wells Fargo or BoA. Do they offer better things than a regular bank? Are they easier to deal with then a regular bank?

[EAJuggalo]

Credit unions are non profits that are actually owned by the members.  It used to be that you had to have some "in" with them before you could be a member, but that has changed for many.  My credit union has been great to me, I just talked my wife into opening an account with them after she saw how well I was treated there a couple weeks ago and compared that to how her last two banks (TCF and Wells Fargo) treated her.  I received an auto loan that they flat out told me I only got approved for because I had been a member for more than a year, at half the interest rate the dealer's bank was going to charge.  There may be some products that big banks will have that credit unions don't, and some that may not be as good.  The rewards programs for my Chase and Capital One CCs are vastly superior to what my credit union offers with it's cards.  But for personal banking, I'll take the credit union every day.

I think you still have a ways to go before mortgage shopping, if I were in your shoes I would open a Credit Union account now and show them you're a good customer for a while before starting that process.

[Anonymous]

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@Anonymous wrote:

I made the mistake of letting my school loans default resulting in a bad credit number. Another issue I had that I had never realized was hurting me was a lack of revolving credit. As a 30 year old I am now realizing how importaint it is to actually have revolving accounts to establish your credit history. When I was younger and having destroyed my credit with my student loans I figured that i'd never be able to even get a credit card and decided to ignore the fact that my credit was bad. This year I decided to rehabilitate my student loans and get them out of default and work on increasing my credit score. I also had 3 items in collections outside of the student loans which total in $640 worth of debt that I paid for delete. 

In April I came accross some inheritance and decided that we needed a second working car and had planned to just buy a car with the money as I knew my credit score was way to bad to even consider being financed through a dealership. I went to a Mazda dealership and fell in love with a car there and was ready to buy the car when they convinced me to finance it. I of course was embarassed and had to explain to them my credit score was probably really bad. To my shock that didnt stop them from getting it financed!! They spent two days going back and forth with the bank in order to coninvce them it was worth giving me a shot. I was able to get it financed with only a 4% interest rate through JP Morgan / Chase. I also at this point found out that my credit score was only 508. I decided at this point I had been given the opportunity to really work on my credit not only by making these car payments on time (which I have every single month), but by cleaning up my student loans (which I have started). 

I have now managed to get a CapOne Secured card ($200), CapOne Plat ($500) and CapOne QS1($500). I have been working on my credit since April and have only managed to go from 508 to 570. I have really debated on applying for new credit cards but im afraid of having more HP done on  my account. I have debated on if its worth it to get a Credit One account not to use but to increase my CL  as im afraid of rejections from other lenders. I have seen many people on here get thier credit points up faster in 6 months then I have managed to accomplish and Im worried that maybe im going about this in the wrong way. 

I welcome any advice on something I may be missing out on that will help me be more succesful in my journey. 

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Avoid Credit One like the plague. You have three cards and thats the minimum needed. Concentrate on building those credit lines over the next year, using the cards heavily and paying them off each and every month. You don't want to carry a balance from month to month - but you don't want all cards to have a zero balance either. Allow one card to show a minimal balance of $20 or so.

After the second statement, you can get your Platinum upgraded to QS. wait a week or so after doing that, then start requesting CLI's on the accounts - you may get "account too new" denials at first, but keep trying every few days - there is no credit pull associated with Cap One CLI requests so you do not have to worry about that. Cap One does regular soft pulls every few months and thats what they go by.

Once you get your credit steps increase at 6 months, kick back until the one year mark and then request CLI's again.