I have been working so hard to rebuild my credit. I had no idea what I was doing when I was younger so I bought things I couldn't pay for and managed my finances poorly. Over the past year, I have made really great improvements. I have been able to get 7 of my 10 collections deleted from all 3 credit bureaus. I have recently opened a capital one secured card and it has started reporting with 5% utlization. I would like to purchase a home soon. The problem I am having is that with me having all of the negative things deleted, i don't have too much else on my credit report. I have a vehicle loan for the past 19 months that has been paid on time each month and 2 student loans from 5 or 6 years ago that were also paid on time every month. Those accounts are closed. I would like to add other things to build my credit but i'm not sure what do next. I want to apply for a card i'm sure I will get, but not another secured card. Any advice. What steps might I take now? Any advice at all would really help.
Oh, and just incase you need to know this the 3 collections that remain: 2 will fall off (7 year mark) next year. The other is a vehicle reposession that happened 3 years ago.
If you are thinking of buying a home within the next year I wouldn't appy for anymore credit. All you need are three active tradelines. If you need more credit, see if you can get a CLI on existing cards with a soft pull. Utilization is huge and something you have control over, so focus on that if you can.
This is actually a subject I've learned a lot about recently!
I just closed on my home...and believe it or not, just 10 months ago, I had a credit score in the 400s!
Like you, I was young and stupid...too many credit cards, not enough income, yada yada yada! Well, when I ran my reports earlier this year, I found that there was a ton of information that was incorrect, and it was hindering my score from rising. Bada-bing...after a few of those accounts were deleted my score sky rocketed 130 points. Then I got a US Bank Secured card with a $300 balance and just kept it under a 10% balance. Then, I was added as an authorized user on one of my fiance's credit cards and it jumped again.
What a lot of people dont know is there are a number of factors that go into qualifying for a mortgage. The most important is the ability to pay the loan monthly. I qualified for an FHA loan with a credit score of 630, which isnt wonderful, but not really horrible either. What got me over the threashold was the fact that they looked at 3 years of tax returns.
I know this is a lot...but, I hope it helped a little