Rebuilding credit questions

[Anonymous]

Hello all, just found this forum and had a couple questions. I'm 33 years old and married. When I was a bit younger (late teens/early 20s) I had gotten two credit cards; A best buy card and a capital one card. I also had two seperate car loans, one got paid off. 

Aroudn 2008, I lost my job and had the beginning stages of a severe illness that took over my life. My cards were closed for non payment, my car was repoed, and it went downhill further from there. I got a new car in 2010 via a bad credit location, car was totaled a month later (not at fault) and didn't have gap. Got a new car from a different place that "helps" rebuild credit, and kept going on. But between the massive credit issues, losing yet another job due to deterriating health, and my student loans going into collections....well, things went from bad to awful. I filed bankruptcy in November of 2011.

Since then, it's been a neverending mess of trying to get my health straightened out (it has finally) and get back on the road to financial recovery. When I filed bankruptcy, my score was a 312. I didn't check it for years. I got a job (GOOD job, at that), and bought a cheapo car. Last June I worked out a deal on my student loans and started paying those back. In February of this year, we needed a new car QUICK, and I checked my score via the Discover credit lookup. I was at a 579. I decided what the heck, let's go for it, and got a brand new car, approved, with payments I could afford. Wife is not on the loan as she doesn't work and she never recovered from her seperate bankruptcy from before we were married (due to her own disability).

Since I got the car, I've made two payments, both on time and for $40 more than the payment was. In mid-March, I applied for a Captial One card and, amazingly to me, was approved instantly for a very low limit ($300). In the month I've had the card, I've charged $237 of that, and already have the money ready to pay it all off again (waiting for my first due date, it says it will show tomorrow.) I also, the next day, applied for a Citi Bank card and got a 7-10 day email and an eventual rejection.

A couple weeks ago, I had to take my dog in for an emergency. I decided to apply for Care Credit just to see if I got it, and because we have 3 dogs and figured it was a good idea. Again, approved for $500.

I read you want to space out applications. I applied for a Best Buy card last week and was told I would be contacted for more info. I was never contacted and got my refusal today.

Sorry for the long story, wanted to make the situation clear. Anyway, I'm wanting to rebuild my credit and you now have a pretty in depth idea of my issues. I make around $31k a year, have no rent/mortage to think of, or any real bills outside of food, car/health insurance, internet, phone and now credit cards. What is my next step? Do I wait longer? I'm currently showing a 621 FICO from the discover site, with 14 total accounts, 11 years, 3 inquiries, 0% revolving and 0% payments. Where can I go from here? I wanted to get a card for basic things like gas, groceries and maybe a movie once a month or so, but I don't even know where to begin. I applied for the Best Buy card cause my wife needed a laptop and I thought maybe she'd let me buy a Nintendo Switch (lol)

So yes, what route do I go from here? Since it was just last week, do I wait to apply for another card? What cards would be good for me? Is it possible to get a CLI on my Capital One card this early or do I have to wait? 

Thanks for any and all answers I may receive!!

[medicgrrl]

Is the student loan and bankruptcy the only derogs on your report now? Have you researched how to have your credit cards report balances? I wouldn't apply for anything else yet. Let the new cards report, all but 1 card should report a $0 balance. The remaining card should report a balance of 1-9%. If there are any other derogs on your credit report, head over to the Rebuilding forum and you can get more advice on bringing up the scores.

[Anonymous]

The student loan is now in good standing, but it is with a collection agency. Payments are being made. The bankruptcy is the only thing showing bad on my account, yes. Which is actually one of the reasons I was confused about being turned down for the BB card, it said:

• Serious Delinquency, derogatory public record or collection
• Lack of recent bank revolving information
• Proportion of current loan balance ot original loan amount
• Number of accounts with outstandng balances

Would it have been just the bankruptcy and the fact that my student loan is in collection that this is the cause? 

Thank you for the help, though! I didn't see a rebuilding section, I'll head over there next!

[UncleB]

Welcome to myFICO! 

Hi @Anonymous, I've moved your thread to the 'Rebuilding' forum to get you more exposure. 

--UncleB

myFICO Moderator

[medicgrrl]

What kind of deal did you work out on your student loans?  When's the last time they reported late?  Are your credit cards reporting balances on your credit report?

[Anonymous]

The deal I worked out is just a lower payment that i can afford. Started last June and will be ongoing until it's paid off. The only two cards I have are brand new. Care credit only has $40 charged to it out of $500 and hasn't even reported the first bill as I haven't gotten it yet. The other credit card I JUST got the first due amount, and my first payment is due on the 22nd of May. The only things outside of my student loans that exists or has even been reported since my bankruptcy are my student loans that, again, I started paying last June. I just got my car in February and am about to make my second payment on that on the 4th. My score has gone from a 579 to a 629 in two months, would like it to keep going and get it higher.

[medicgrrl]

You're going to need a third card for optimal scoring purposes.  I wouldn't do it yet though.  You want a good card that can grow with you.  Wait until both of the new cards are reporting to the CRA's.  Make sure 1 reports a $0 balance and the other reports less than 9%.  See what that does to your scores.  I think if you can hold off until one of the cards is 6 months old, you will have a better chance at someone like Amex.  Who did you include in your bankruptcy?  That will make a difference too because some lenders have longer memories than others.

Are you student loans federal or private?  You stated they went to collections, are they actually with a collection agency or are you making payments to the lender and they are showing that you have paid as agreed since last June with no lates in the last 9-10 months?  Getting to the 12 months of paid as agreed on these will also help you to get a better card.  You're very close to being where you need to be so I wouldn't app for any additional retail cards. 

[Anonymous]

I included everything in my bankruptcy except my student loans. This was a Capital One card, a Best Buy card (closed in 2006 with a $200 balance that was never paid), a car loan, hospital bills and more.

Student loans are a mix of federal and private, all of them were consolidated through Navient who is the one I am making payments to with no lates since the repayment started. The 12 months will be in June. I will have the Care Credit card at a $0 balance this friday, the other card is at 92% currently ($277 out of a $300 limit), but isn't due until May 22. I will have that paid down (not to $0 so it shows some spent on it) by the 12th of May.

So, don't worry about a retail card at this time, what about a normal low limit card similar to the Capital One I have now? Or just wait the 6 months until I have more history on this card?

EDITED TO ADD: Also, how can I check my scores from all agencies for free? 

[medicgrrl]

Unless you absolutely need a 3rd card right now, I would wait a bit.  I can't remember, was there a specific goal you have short term in regards to big purchases?  If you can wait on the third card, I think you will have a better chance at a card that will actually grow to meet your needs vs getting another starter card that won't do much for you in the long run.  You can ask Cap 1 for a CLI after (I think) your second statement cuts.  It probably won't be more than $100.  They've really gotten strict on their CLI.

In regards to the student loans, you can attempt GW letters on them, but from what I've read, federal loans won't receive the GW for late pays because it's written into a specific law.  

Amex seems to be getting a bit more flexible on their criteria and I think you will have a good chance with them in a few months.  Were they included in your BK?

You can get all three of your FICO scores for $1 on a  trial at Credit Check Total.  Just make sure to cancel your membership before the first week is up!!

[Anonymous]

The only "big" purchase I was thinking of was a Nintendo Switch...so right around $400 after everything. Maybe a new computer chair. I can afford to buy both with cash but was looking to build my credit score in the process.

AMEX was not in my bankruptcy as I didn't have one from them. 

I will go to that credit check place and see what my scores are there. Thanks again!