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Rebuilding Credit after ex damaged it!

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Anonymous
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Rebuilding Credit after ex damaged it!

Hello I am new to all this and trying to repair/rebuild my credit. Long story short my ex husband had me file Chapter 13 Bankruptcy back in 2006. It has been discharged and it has been 8 yrs ago and now all the reporting agencies have removed it except for Equifax. I pulled my credit reports back in March 2014 and cleaned up all the derogitories and collections. In May I was approved for a Victoria Secret Card for $250 and a Capital One card for $300 and I made a purchase from Conn's that I have been paying on consistently monthly with $50 extra a month when I send in the payments. I have never had a late/missed payment. I just recently got Capital One $500, Kohl's $300, Toysrus $300, Target $300, Walmart $600, Barclay $750, Chase Freedom $500. The cards with zero balance are as follows: both Capital One accounts, Toysrus, Target, Victoria Secret. The ones with balance are Kohl's $134.21, Walmart $371.45, Barclay $241.62, Chase Freedom $331.36. My 0% APR for two years are my Capital One accounts, Chase Freedom and Barclay. I have the money to pay off all these balances but my question is should I? Does that help my credit score? I am trying to rebuild my credit a friend told me use your card and pay in full before the bill is due. Basically swipe then pay. I have read so many different things that I really don't know what I am doing just trying to bump up my credit. What is the best way and quickest way to bump up my score? 

Message 1 of 5
4 REPLIES 4
Darrell82
Established Contributor

Re: Rebuilding Credit after ex damaged it!

Sorry to hear about your ex and congrats on your path to a new rebuilt credit. Since you are building your credit worthyness I would use a card only using about 25% of your credit limit and let the balance report so that they can see you repay debt. If you never let anything report only the card company itself will know that you pay your dues. I always carry a balance on one card but pay off right when the bill cutts. Hope that helps.




Message 2 of 5
JSS3
Valued Contributor

Re: Rebuilding Credit after ex damaged it!

Rule of thumb for optimal scoring is to have all cards report a ZERO balance except for one. Choose any one card then leave a balance of <10 % of that card's limit to report.

 

"Report" is bolded and underlined because it's not just about paying/having no late payments. That's a must but you have to know your statements closing date and make sure to pay down to zero before that statement cuts....if you wish to micromanage your account. Some think paying in full means that it will show this when a balance reaches the bureaus OR that the CCC, itself, will see them PIF and that's all that matters. 

 

My Capital One card cuts on the 5th and is due on the 2nd. If I pay the balance in full on the 9th, that's way earlier than my due date(so I'm before my time on that...plus I "paid in full") but I'm late to getting it down to a zero balance before it closed on the 5th. What's then reported to the bureaus is the high balance I had on the card. It won't show that I paid in full to the bureaus. My reported UTIL is out of whack and I have this and other cards reporting; bringing down my score. Yet here I am all along thinking I paid on time and in full AND that'll show.

Message 3 of 5
alienfico
Frequent Contributor

Re: Rebuilding Credit after ex damaged it!


@JSS3 wrote:

Rule of thumb for optimal scoring is to have all cards report a ZERO balance except for one. Choose any one card then leave a balance of <10 % of that card's limit to report.

 

"Report" is bolded and underlined because it's not just about paying/having no late payments. That's a must but you have to know your statements closing date and make sure to pay down to zero before that statement cuts....if you wish to micromanage your account. Some think paying in full means that it will show this when a balance reaches the bureaus OR that the CCC, itself, will see them PIF and that's all that matters. 

 

My Capital One card cuts on the 5th and is due on the 2nd. If I pay the balance in full on the 9th, that's way earlier than my due date(so I'm before my time on that...plus I "paid in full") but I'm late to getting it down to a zero balance before it closed on the 5th. What's then reported to the bureaus is the high balance I had on the card. It won't show that I paid in full to the bureaus. My reported UTIL is out of whack and I have this and other cards reporting; bringing down my score. Yet here I am all along thinking I paid on time and in full AND that'll show.


 I like the way you explained that.  Simple, explicit and with an example....for some of us that works really well Smiley Happy Smiley Happy   I had some difficulty figuring this out until I read and researched on here, then I called the card companies and asked when they report to the bureaus when they close and cut the statements....I put those dates on my calendar at home and in my calendar on my cell with an alert.  So now I micromanage and for rebuilding purposes, it has helped me I'm not at 700 yet....but I'm better than where I started from Smiley Happy Smiley Happy Smiley Happy 

Starting: TU:515, EX:521, EQ:528
Current: TU:700 EX:706 EQ:674
FICO Goal: 725
Cap1 Venture $11,000AU, First Progress $500, Cap1 QS $1750, FH$600, Open Sky $300, Cap1 $500, BestBuy $1500 Target $1800
Message 4 of 5
RobertEG
Legendary Contributor

Re: Rebuilding Credit after ex damaged it!

It is educational to fine-tweak your revolving balances for a few months to determine the optimal balances, such as having all but one report $0, and one report under 10%.

That gives useful info if and when you are ready to actually app for new credit.

 

It is not necessary to always maintain the optimal balances/score once you have experimented, as FICO scoring only uses current month util, not prior history.

With multiple revolvings, that level of tweaking each and every month can become time consuming.

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