To reinstate or not to reinstate HSBC (Best Buy)

[Anonymous]

Hello,

I had a best buy account opened in 06/2007 with a limit of 1500. I was current up until Dec 08 (30 days) then again in Mar and Apr 09 (60 days). Since then, 18 months now, I've been on time and even paid off my balance to zero just last week. The account must have been closed since I see my available credit reads as $0 on my statements, for some time now, probably since the 60 day of lateness. The account was not sent to collections and I paid directly to the OC (Best Buy/HSBC). The 0 balance has yet to be reported to the credit bureau.

I do see on my reports that Best Buy is reporting a limit of 1500 still this whole time. I'm confused by this.

So, my question is, do I request a reinstatement of my account to keep my credit limit reported as 1500? Do I send a GW letter to remove the lates? Do I do both?

My only other loan/credit is a car loan since 3/2006 and a Crapital One card with a measly $300 limit.

Background- I had 3 credit cards in 2006 that I used Creditsolutions.com to settle with. I had no working knowledge of credit reporting and credit scoring at that time. I was over 10,000 in debt and was being eaten alive with interest. The last settlement is scheduled to delete around 9/2013.

I see I'm reported as having a credit limit of 1800 (300 for Crapital One and 1500 for Best Buy). I don't want to lose the 1500, in fear of my credit to debt ratio being affected.

Should I consider opening a new credit card to rebuild a positive credit history? How much would it affect my score, considering a hard inquiry would result of that?

Currently i have a myFico score of 636. In one year I plan to prequalify for a home loan, most likely a FHA loan. I'll be a first time home buyer. I appreciate anyone's advice. Thank you.

[llecs]

Welcome to the forums!

I would call them and see if they can reopen. When reopened, it'll improve your chances of getting them to accept a GW.

Once a CC is closed, assuming it is a $0 balance, the CL is removed for FICO scoring purposes from the calculation. If it is reopened, then it is factored back in. You mentioned that there is a balance reporting so the CL is still factored in at the moment.

The BB card may already be excluded in your mix of credit. You'll likely benefit if you add another CC. IMO, aim for a secured CC.

[Anonymous]

Thank you for your advice! I think I will request to reinstate. I've definitely learned my lesson in financing.

I'm weary about opening any new line of credit. I think I'm going to see what happens to my score after reinstating my BB card and hope a GW works to remove the lates. If I see no improvement, I will consider a new CC. I think the reason my FICO is 636 is because of the 3 CC derogs of settling in 2006, which only time will heal that wound.

I do have one paid collection (scheduled for deletion 6/2013) from a MVA ambulance ride to the ER in 3/2006. A red light runner hit me going 60 mph. Apparently, the ride wasn't billed to Allstate (my car ins) or Geico (red light runner's ins) or there was a portion that I somehow was responsible for. Let's just say 2006 was a BAD year for me. The bright side is 2013 will be my time to shine. I hope to see a huge jump with all the negatives deleted. I should be in the 700s by 10/2013. Sooo far away...guess it will just give me time to save a nice cushion to buy a home with.

So, in short, I'm not sure how much a new CC will do me good with all the negatives. =(

Thanks again,

Vicki

[JM-AM]

Your scores will improve and can improve to be 700 or higher before 2013 if you follow most of the information you find in these forums. Many people have negative items on their reports and have scores in the mid to upper 700's. 

Just figure out which ways are best for you to work the FICO scoring system. 

IME having only 1 open line of revolving credit is keeping your scores lower. Applying for a rebuilder card and or a secured card would help you in the long run. 

Good Luck

[thotgal320]

Best Buy/HSBC will close your account if it has been inactive for a year the only way you can get another is to reapply for the card. 

[Anonymous]

I can see how re-establishing good credit could benefit my score. I'm looking at this secured Visa through my credit union.

https://www.alaskausa.org/loans/securedVisa.asp

I have been banking with this FCU for over 15 years. I also have my car financed with them. I like how the credit limit has no maximum. After 2 years of good standing on my secured Visa I can apply for an unsecured card, pending review.

Not being familiar with the pros and cons, I'll be interested in any words from the wise with choosing a secured CC. Thanks again. It's nice to have such a wealth of information from people with experience.  

[Anonymous]

If it means having a hard inquiry on my report to reopen my Best Buy card, I don't know if I want to. Am I being too stingy with my points in the bigger picture? 

[JM-AM]

No matter what you do to rebuild you will have to accept hard INQ's. Even your CU will more then likely pull a hard INQ once you apply.

The only secured card that I know of that does not check your credit with a hard INQ is Public Savings. The only thing bad about Public Savings is that it will never become unsecured.

Rebuilding takes time, and you have to take the good and the bad included in the process. To rebuild you have to apply, to apply you have to accept the INQ.

Good Luck

[Anonymous]

True, true. I see my stubborn ways. I will get a secured card and see where that takes me. Thanks all !