Trying to Establish New Credit

[simplesaver]

Hey there!

I am trying to establish new credit after letting two credit cards go delinquent when I was in college. Right now, they are still on my credit reports and are scheduled to drop off in 2016.

I signed up for and received a Capital One secured credit card in June that I recently upped the credit limit to $300. I am trying to keep my utilizaiton to under 20%. I want to know if y'all think it's worth it to keep putting money into my CLI for the CapOne secured card or if I should keep it low and PIF on time for several more months and then apply for another card.

Basically, I want to know what my next Credit Card step should be. Thanks!

[Anonymous]

From what I've read, you want to pay it in full each month, and not go past 15%ish usage on the card.  It's very hard to do that on such a small limit though.  I bought 1 thing and paid it in full at the end of the month (using my CO $500 CL card) but it lowered my credit score by 25ish points b/c my credit usage went to like 50%...sigh.  But then my credit score went back up the same 25 points when I paid it at the end of the month.  It's frustrating dealing with such tiny amounts.

You can wait for the two credit cards to fall off in 2016.  But if you have the money & want to pay them, I would only do it if they agree to a PFD letter (pay for deletion) so that they are deleted completely from your credit report.  Because the deletion part is what would make your score go up a huge amount.  Just paying a collection item even in full doesn't do that much.  It's mainly the fact that it was in collections that hurts the most.  I know this from experience b/c I paid a collection item in full and my score didn't go up much only 30 points.  But when it was finally deleted, it jumped a huge amount about 60 points.  So keep that in mind.  You want the PFD agreement in writing or else don't do it.  Never trust their word on the phone.  In writing or nothing at all.

[myjourney]

Welcome to the forum 

My advice add another secured card and sit tight for 6 months to build positive history and AAoA

Here's one that won't require a HP 

Reports to all 3 CB's 

Great APR

No FTF

Easy approval

 https://www.sdfcu.org/emv-creditcards

[eric19k]

Sdfcu 10000% agree