Rebuilding Credit With Secured Card Despite Charge Off

[Anonymous]

Hello everyone. I am graduating college in December and want to get my credit back together. When I graduated high school in 2011, I got a credit card from Wells Fargo and long story short, I maxed it out and it was charged off. A few weeks ago, I contacted them and spoke to multiple people and they refuse to do PFD or anything. I decided to just get on a payment plan of $100 a month to pay off the $1500 or so balance because I just want to move on with my life. My current FICO scores are Equifax: 562, TransUnion: 579, Experian:547. I have only that one charge off account that I'm paying that I stupidly closed two years ago so my only most recent credit now is from student loan I took out in January 2015. I just got a platinum capital one semi secure card with a $205 limit to add to rebuild my credit scores. What are your suggestions with moving forward to maximize my FICO? I was worried about the charge off but from being on the forums, I think only having one singular charge off and having good credit history from then on isn't the worst situation. But yeah... how should I proceed? 

[Anonymous]

Your off to a better start than me. Also wells Fargo is the most unforgiving bank there is and very stubborn bank when disputing however they tend to make more mistakes than any bank I ever dealt with. I have a charge off with BOA back in 2013 and a 120 day late on my student loan also in 2013. My TU fico score in January 2015 was 595 now Aug 2015 it is 695. In January of this year I started off with the same secured capital one where I ended up depositing $2849 for a $3000 credit limit. My score jumped and I payed down my closed best buy card. I than applied for BOA secured card and was denied I called for recon and begged on the phone I was luckily approved with the bank that I defaulted and deposited $2000. Always stay under 10 percent of utilization and you will have the best score affect. When my score was between 620-630 I applied for Capital One platinum and was instantly approved for $1000. It took time and myfico credit stimulator says when I pay off my student loan I will receive 15pts increase on each credit bureau. I recommend myfico because it immediately updates and you can keep tabs on your credit. You can fix your credit issue.

[Anonymous]

Personally, I would keep your utilization down to 10% or less for a few months and lie low, just showing responsible card usage. Keep checking the Capital One prequalification page after that, and once you become prequalified for the unsecured Platinum, take the chance, as the prequals are usually pretty solid.

When you get your unsecured Platinum, use it a whole lot and either pay in full every month, or, like with your secured, keep it at 10%-below. Meanwhile, definitely pay your secured in full every month. At about 5 months, if you displayed heavy (but responsible) usage, they should give you a pretty good CLI--I often see people go from $300 to $1500.

By then you should probably have your charge-off paid for, so, while it won't remove it off of your report, it will help. You'll also have a decent unsecured card, and by then I would feel comfortable applying for another card and maybe closing your secured card after that, since it unfortunately won't graduate.

BoA has a secured card that will graduate, but their prequalification page is utter garbage, so you'll be taking a huge chance by applying, and there will be a chance at denial even with recon. However, if you do get it, it will be great to have an evolving credit card in your hand, as you won't have to close the line (as I'm sure you'll eventually need to do with the Capital One).

I dunno, I'm a pretty conservative person when it comes to this credit game, so my offered plan might be a bit lukewarm, but I think it might be pretty solid for you. Good luck, you can do this!