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Rebuilding My Credit with a Secured Credit Card?

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DistantDreamer
New Member

Rebuilding My Credit with a Secured Credit Card?

Good Day,

 

A few years ago my car which became beyond my means was repossessed. The car being newly purchased and upside down, resulted in even after the auction a massive amount left to pay off. I agreed to lesser monthly payments until the car was paid off which just occured last month. Other than waiting 4 or so years for it to be removed from my report is there anyway to substanially raise my score?

 

My score is currently 554 (experian). I believe when the incident happened it was low 50s. So not a great deal has changed but I assumed that was because I still had the debt being paid off. Now that it is paid off will my score go up significantly over the course of the next several months?

 

When the car was repossesed I had three credit cards open that I had never been late on. Once the repossession was reported however, all three credit card companies closed my accounts. I paid off one account instantly (amex). The other Bank of America card that only had a couple hundred dollars on it I paid off a few days ago. The final Bank of America card has 400 dollars. That card was opened when I was 18 so even though its technically closed, I was afraid once I completely paid it off, it would be worse for my credit since both accounts still shows when I login to BOA. Or should I attempt to pay of that card completely as soon as possible?

 

I have student loans but have always been on time with them. I've always been on time with my rent, and utilities. Though other than the loans I imagine those don't account for anything unless you are not on time.

 

Since other than the car I have an still am current an on time with all my accounts yet my score is still so low. What can I do then to get it back up other than continuing what I'm doing for 4 or so years? My first thought of course was a secured credit card since I started making a great salary the past couple of years (after the repossession) so I can easily deposit money into a secured credit card. But when I tried opening one with Bank of America they declined me saying I have bad credit. To which I laughed as that is the whole point of opening a secured card, and they would not be lending me any money, I would be using my own deposited money. Since I just finished paying off the car, and reported to the three agencies that it is paid off, should I wait a month or two, and see if the reports show that, and then apply for Bank of America again? Or should I apply for one with another company? Thank you in advance! 

Message 1 of 4
3 REPLIES 3
llecs
Moderator Emeritus

Re: Rebuilding My Credit with a Secured Credit Card?

Welcome to the forums!

 

A secured CC is a great way to go. You'll limit the number of inquiries you would have received after app'ing for an unsecured card and you get to control the CL, though the CL amount isn't important in scoring. BofA is actually somewhat difficult to get a secured CC with. I tried and failed too back in my early days. Their cards aren't so great anyway. I'd aim for a CU or your local bank. Check around in the Credit Cards board for other examples.

 

I'd pay the closed CCs in full ASAP.

 

Per your 554 EX score, it isn't likely a FICO score unless you got it from your lender or from a CU in PA called PSECU. Experian blocks consumer access to their EX FICO and it's next to impossible to get it unless you got it from one of those two sources. Other sites sell an Experian score, like freecreditreport, but it isn't a FICO. Your FICO could easily be higher or lower.

Message 2 of 4
DistantDreamer
New Member

Re: Rebuilding My Credit with a Secured Credit Card?

Thanks for the reply.

 

I will work on paying off my remaining closed credit as soon as possible then.

 

I currently use PNC for my banking needs, since I've had bad experiences with BOA. I did read on here PNC has a secured card, but unlike BOA theres does not turn into a secured card. I'll be moving to Boston where there are no PNC bank branches but technically I shouldn't need a branch since I conduct everything online? Would there be any reason to choose a different credit card company or union that says the card will transition from secured to unsecured? Or could I just as easily open an unsecured after having the secured card open for a year or so and just leave that card open indefininetly? Thanks again!

Message 3 of 4
llecs
Moderator Emeritus

Re: Rebuilding My Credit with a Secured Credit Card?

Getting a secured CC is a means to building up revolving experience and a secured CC shouldn't be permanent. Whether it unsecured or not is unimportant, IMO, because you'll replace it one day soon anyway.

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