12-27-2012 07:08 PM
After many years of not taking care of business (and not caring), I'm now starting to rebuild my credit and I appreciate any and all advice. My Equifax score, as reported here, is 650. I'm unable to pull a score from the other CRAs since my file is so thin - no ccs, no current loans.
The one report I was able to obtain has1 derogatory account - a collection account, (Opened = Mar 2011, Date of last activity Feb 2008) w/ $1200 @120+. There's one other "baddie" ($1250 charged off), but it is not listed as a Negative Indicator.
I think my best course of action is to open two credit card accounts and use them for small purchases, paying both in full each month. Is my thinking correct? Any suggestions as to which card(s) I should apply for? In addition to raising that 650, I want to obtain a score from the other agencies, as all three are used by various lenders.
Thanks for the help!
12-27-2012 07:26 PM
Welcome to the forums !
It's great that you are starting to take a look at your credit profile - I agree that you'll want to have a FICO score reporting on all three CRAs.
So do you have any open credit accounts now, either revolving or installment accounts ? In terms of revolving credit, FICO scoring generally likes to see at least two or three open accounts. You might have to start with a secured card or two, until you build up some positive payment history, and then switch over to unsecured cards.
12-27-2012 07:34 PM - edited 12-27-2012 07:39 PM
Thanks for you quick response and welcome!
No open accounts, so I plan to apply for a secured card. Are any substantially better than others? Any that DON'T report to TU or Experian? I'll want to avoid those.
Edited to add: Just to give you a fuller picture, my AAoA is 13 years and my "Most recent late payment" was close to 5 years ago. Also, the address listed as my "current address" is one I haven't lived at for 20 years or so. Not sure what, if anything I should do about that.
12-27-2012 07:54 PM
I would carefully scrutinize the T&Cs for secured cards....look at their fee structure and also how often you can bump up your deposit to increase your CL.
Do a search in the CC forums on "secured" and you should be able to find some good information on secured card choices. You might be able to get in with a store card as well, perhaps target or a GE card, although your CL might not be much to start with.
I wouldn't worry too much about the address right now ~ you can always deal with that later. Once you have positive tradelines reporting, then your current address should be reported too.
12-28-2012 01:12 PM
Thanks for the advice. One more question, if you don't mind . . . since my biggest issue seems to be a thin file, rather than a horrible one, I'm wondering if there's any advantage to applying for an auto loan, rather than a 2nd or 3rd credit card. My thinking is there is perhaps an advantage to having a greater mix of credit types and from what I've read on the Auto Loans board, it seems I might be approved. Also, I don't really have a need for the ccs, but a used vehicle will make my life infinitely easier right now.
My biggest concern right now is applying for too much at once. I applied for a Citi cc card yesterday and received an alert that my score dropped 2 points. Still waiting for the decision on the card.
12-28-2012 01:22 PM - edited 12-28-2012 01:22 PM
You might get a boost from having an installment loan added to your mix of credit, but in my opinion you'd be better off with several open revolving accounts for now.....unless you really need to purchase a vehicle. You might have some issues with getting your auto loan approved at decent rate with a thin file...
12-28-2012 02:00 PM
+1. You will get much more bang for your buck with revolving credit.
12-29-2012 11:36 AM
Followed your advice and applied for CapOne Secured, which was approved w/ $200 CL. I then took a shot at CitiForward. I initially received the 7 - 10 day response. Was disappointed to receive an email today saying I was declined bc of "delinquent credit obligation." After scouring these boards and learning all I could, I attempted a recon. Happy to say it worked - I was approved w/ $1K CL.
Thanks so much for the advice both here and elsewhere on the board. I will be a frequent visitor as I continue to rebuild.
12-29-2012 04:03 PM - edited 12-29-2012 04:04 PM
Thanks! Now I want to use this turn of events to my best advantage, but I'm not sure what that is. I'm thinking I'll leave the CapOne alone and charge only a small amount monthly (~$90) to the Citi card, paying in full each month. Does that sound like the best course of action? I'm also unclear as to when I should pay that $90 - I assume just after the statement is generated, so it's clear I'm using it, but paying in full immediately after - correct?