Suggestions/Thoughts? Starting from the bottom.

[arenglish]

Hello, 19 years old and currently rebuilding credit.

Started at 524 with 1 open collection at $2,500 on TransUnion. Opened two secured cards. Discover and Capital One at $200 CL each in Feburary and January of this year, respectively. Current scores (according to Credit Karma) 603 TransUnion and 670 Equifax. Since then, my balance on the open collection has decreased by $100 to $2400 and a second closed collection was reported. Collection accounts only reported to TransUnion. Besides paying off my collection account (trying hard to do), any suggestions? Is now a good time to try and apply for an unsecured card, if so which one? I keep my utilization ~ 6-30%, currently at 6% and have never missed a payment. I've read that at the 5/6th statement Capital One automatically gives a CLI, anyone have any experience with this? 

Thanks!!

[Anonymous]

Throw away the Credit Karma scores, they are totally useless and tell us nothing.  They are 100% garbage.

Go pay $1 to CreditCheckTotal for their free trial and get your FICO08 scores there.  Those are useful.  Then cancel the free trial.

Now you want the following:

1. One installment loan reporting -- either student, auto, mortgage or personal loan.  If you don't have one, go do the Alliant SSL trick immediately.
2. Open a third credit card now, and plan for opening a 4th and 5th card in 6-12 months when you are prequalified for a better card such as Chase Freedom/Freedom Unlimited (see prequalifications link in my sig).
3. Follow the AZEO method -- keep all your cards at $0 except one.  The one that isn't zero must be more than zero but less than 9% of your limit on report date.  Some people just let $10 or $15 report on that one card, good enough!

Once you have the loan report and 4-5 credit cards that are at least 6-9 months old each or more, your FICOs will be in the mid to high 600s.

The open collection is tough to suggest against -- when is the DOFD on it?

[arenglish]

Thanks for the quick reply! Signed up for CreditCheckTotal but was hit with an error, not sure why, I'll try again later. (maybe my credit file is too thin?)

Any suggestions for a card to open? I've looked around and don't seem to be prequalified for anything. 

I don't necessarily need a loan, I spend less than I make and take public transit to work, although it would report well. 

For the collection, it was reported by my college to the state's Central Collection Unit on July 27, 2016.

[Anonymous]

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@arenglish wrote:

I don't necessarily need a loan, I spend less than I make and take public transit to work, although it would report well. 

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Wrong.  To maximize FICO scoring's "credit mix" portion, you absolutely DO need an installment loan reporting as open and showing a balance remaining of less than 9%.  The Alliant SSL will cost you $44 out of pocket after the first week or two, only cost you a few bucks in interest for 5 years of the loan, and won't cost you a credit inquiry.  It will boost your FICO 08 score anywhere from 15 points to 30 points across all 3 reports.

After 5 years of reporting positive you will get that $44 back and probably be out a few dollars in interest you gave up in exchange for a massive FICO boost, a 5 year old positive account plus 10 more years of aging history.  Less than the cost of a double cheeseburger, fries and a soda for an immediate near-instant boost and 5 years of benefits.

That boost may help you get credit prequalifications and preapprovals.

What was your collection actually for?

[Anonymous]

But doesn't a SSL tie up at least $500 for the entire life of the loan? Because you can't withdraw that until the loan is done. That's a LOT of money to be out for several years.

I went with Self Lender simply because I only had to pay $12 upfront. They haven't reported yet, but I haven't made my first payment, either.

My husband has a car loan, but it's in his name only because I don't drive.

[Anonymous]

No, it doesn't tie up at all.

You give them $500 to secure the loan.  They give you $500 back and lock up $500 in the loan account.  So you have $500 cash, but your initial $500 is locked up.

You take $456 of what they give you and immediately pay back that portion of the loan.  Now they unlock $456 of the locked balance and give it back to you to withdraw.  So you have $456 cash now.

So you have a $44 loan outstanding and $44 locked in the secured savings account.

As you pay off the $44 over 4-5 years, they unlock the portion you pay off for you to withdraw.

[rmduhon]

If those cards are your first ones then you'll have to wait until one of them reports the 6th statement before you have a score. That's more than likely the reason for the error.

[arenglish]

The collection was for unpaid tuition that by my school's policy must be reported for collection to the state's collection agency. I tried to arrange payment before they reported it but was unsuccessful. Now currently working to save up and pay it off.

I don't have $500 to do the SSL loan right now but will come July. I was not able to get my able to get FICO 8 (have only had 4/5 statements so far) score but was able to get scores through Equifax and their service using a free trial: EQ:657; EX:579; TU:626. Are these reliable scores as well?

[Anonymous]

I never went to college so I can't offer advice on student loans but I would try to pay the arrears and then maybe use the goodwill saturation technique until they cave and remove the lates?  No idea, sorry.

The $500 to do the SSL is mostly returned to you in a matter of days to a week.  I transfered my $500 from checking, started the loan, and just a few days later had $456 of that money back in my checking account to use.  Plan for it for July for sure!

I am not sure about Equifax.  Do the scores specifically say FICO08?

[arenglish]

No, the scores do not specifically say FICO8, I'm starting to see a trend that these are the only scores that really matter. I'll keep doing my best to get my hands on these numbers, but I believe my issue is like rmduhon said. Do you have an experience with goodwill letters? Also, how much do you pay a month on your SSL loan to keep it active?