Should I get a Secured Card?

[Anonymous]

My scores are very low: TU 569; EX: 539; EQ: 555

I already have two Capital One QS1 cards ($420 & $850 limits) and a Lord & Taylor Store Card ($750). I missed a bunch of payments on my student loans a few years ago, but I'm current now. I have 2-3 collection accounts on each report and a couple (2) of charge-offs. I am working now to have some of these derogs removed. In the meantime, should I apply for a secured card? I was turned down a Cap 1 Secured, DiscoverIT secured, and BofA secured when my scores were lower, so I was thinking of opening an Open Sky card. It then occurred to me, maybe it won't even help someone in my position. Will it be beneficial? Any help/advice is appreciated.

[Anonymous]

3 credit cards is a good place to start rebuilding.  You will see a maximum boost in FICO from just having 3 credit cards.  When you get #4 and #5 you will get a FICO ding initially for the new accounts but after a year you'll have a stronger score from 5 credit cards.  I wouldn't open a new one yet...

First, what is your BALANCE on each card?  Post the credit limit and the balance on each.  I bet that's what's hurting you.

[Anonymous]

They were a lot higher before I found this forum. Now they are at 150/850 39/420 and 351/750 (still working on getting this one down). I also have a Best Buy card that they closed although it was in good standing because of my score. That has been paid off. Also have a Limited Card issued by Comenity Bank that has a 0 balance. The store closed, so I assume this card will also be closed soon.

[Anonymous]

The first thing you want to try is to do the AZEO method:  All Zero Except One.

Pay down 2 of your cards to $0 and keep them there for statement cut.  Keep in mind that some cards will post new interest on statement cut date so it may take 2 statements to post a true zero.

On the third card, pay it off EXCEPT for $5-$10 for statement cut.  You want all your cards at ZERO, except for one, which has to be more than zero but less than 9% of the credit limit.

This can boost your score 10-20 points.

As long as you have 1 installment loan reporting and 3 credit cards reporting, doing AZEO can boost your scores nice.

[Anonymous]

Awesome! Thank you!! I have student loans and a car loan. Though my score is low I do have a good mix of credit. And my oldest line is 14 years old. I wish I learned about all of this a long time ago, but I'm looking forward to the future.