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Hi everyone, I've been following this forum for the last few months gaining knowledge from all of the valuable people who post here. This is my first post, and I'm looking for some advise for people who may have been in my situation in the past.
First I'll ask my question, and then follow up with some background on how I got here:
I'm looking to purchase a new car in the coming months and plan on financing between $10k-15k. My FICO score has been fluctuating ~650 for the last 4 months and doesn't show sign of increasing much in the near future. Ideally I'd like to get this score up closer to the 700 mark in order to take advantage of better (less horrible) interest rates. I'm thinking about opening a credit card (possibly secured) to boost my score.
Now some background information that should help you guys understand my position: I'm 27, single and have been a cash purchaser most of my life. My car has been paid off for 4 years and I have no other debt. I have always had well paying jobs which provided the necessary income for my lifestyle and thus I made virtually every purchase with cash or my debit card because I knew I had the resources. Because of this I have a somewhat limited credit history, which is probably the biggest issue holding my score back.
Back in October I became interested in my credit score and decided to take a more active approach to improving it. I applied for a couple of credit cards and quickly learned about hard inquiries. I finally settled on a Capitol One Platinum card (unsecured $500 limit), which has the stepped plan to increase CLI every 4 months or so. I make about $50-$100 worth of purchases on it each month and pay it off as soon as the statement posts. Aside from the hard inquiries which I can't do anything about, this has increased my score ~10 points. Needless to say this was less than I was hoping for.
In the past I have had a car loan for ~$5000 from my bank which I paid off over 2 years, ending in 2006 when I graduated college. At the time I also had a unsecured 5/3 credit card which I never used because the limit was $300, and it was just easier to pay cash. This card was closed about a year ago due to in activity. The reason I mention these things is because they report on my EQ and TU as paid in full and closed, giving my credit record a start in 2004. I never missed a payment on either account.
I have one negative on my reports from a collection agency, Asset Assurance for ~$340. This was due to a 2005 loan for a purchase of a road bike, which I was mislead into believing came interest free for 1 year (I was lied to, it was actually 3 months) . I paid the bike off early, but didn't know about the growing interest. When I paid the bike off (over the phone, dumb I know) I was told the account was closed and never received bills for the remaining debt. The account was not closed and by this time had grown to over $400 and was sold off to Asset Assurance. I eventually settled with them for $340 and paid the debt (which I had known about PFD at the time). This debt reports as a collection account, paid as agreed and closed (Final transaction 10/2009).
I know this has become pretty long winded, so I'll wrap it up. I'm thinking about opening another credit card up but am not sure if this will really help much. If I go the secured card route, I have ~$12,000 in savings and could afford to put $1500 down as a deposit if it would boost the FICO score enough to matter. If I go unsecured, I'm sure the CL will be low and probably won't help me much.
Does anybody know of a credit card that weighs approval / credit limits based on income? I make $75,000 a year and have no real debt, it seems like I would be an ideal customer for a credit card company...yet I get uselessly low limits.
Any other advise on increasing my FICO is truly appreciated. Sorry this post was so long!
-Cheers!
I would try some pre approval sites first and see what you are pre approved for, some of the sites have a section to insert your monthly income, so i'm guessing they also base it off what you make.
here are a couple other than capital one.
https://www.hsbcapply.com/start/hsbccreditcard/ HSBC
https://preselected.bankofamerica.com/cc/SelfInquiry.aspx BofA
Also you can also try a Store Card to give your Credit some Variety
Target
Macy
JC Penny
Best Buy
good luck
First, start goodwilling Asset Acceptance.
Call the card that closed due to inactivity and ask them to reopen in good standing, cite your good history and promise to use the card. Perhaps also mention that the reason you weren't using the card before was the low limit, which made it easy to max out with hardly any activity.
Check Bankrate.com for card suggestions for limited history, and the credit card forums for other suggestions.
Thanks for the advise. Does anyone have an example of a successful Goodwill Letter for a creditor that you have already paid as agreed. Getting Asset Acceptance off my record would probably boost my score a decent amount.
As far as credit card applications go, I tried the pre-approval sites listed above and both gave me secured card options, which really isn't all that surprising. I'll post more card related issues in the credit card forum if I have them.
You can also check out whogavemecredit.com - you can search by FICO, but I recommend making sure you scroll to the bottom to see what people have been getting lately. You can also go to your bank or credit union with your credit report and ask if they'd approve you / for how much based on your score.
One persons GW letter will not work for another, because situations are different.
Just tell them what happened, how nice they are/were , you have matured
and have a better understanding how important credit is and paying on time.
Here's the link to the GW primer, found in the Freq Req Threads.
http://ficoforums.myfico.com/t5/General-Credit-Topics/Goodwill-Primer/m-p/9424
Good luck to you Let us know if they delete.