My mom is trying to rebuild her credit after filing for Ch.7 BK in Jan. 2011. She just got a Capital One secured card and now I have a few questions about what she should do next. She doesn't know anything about credit (which is why she didn't do this sooner, unfortunately) and I've told her about paying off her card every month before the statement cuts instead of when she gets the bill... about how much improvement can she expect in her credit after 6 months of doing that? These are her current scores (from a lender, so they are real FICO scores) EQ 609, EX no score, TU 653. The biggest priorities right now are to bring her EQ to 640 and establish credit with EX. She wants to be able to be approved for a mortgage (as soon as possible), but I know it will take some time. Also, what should be her next step and after how long? Personal experiences are definitely welcome from anyone who's been in a similar position! I know there are several secured cards out there, but I'd ultimately like to be able to get her next card as an unsecured one (the Walmart card would be nice since it comes with a TU fico monthly for free, for example).
Thanks in advance!
I've also added her as an AU to my TJ maxx card, it has a $1000 limit and I keep the util very low on it at all times so I thought that was a safe one to add her on, it hasn't shown up on her credit report yet though. Also, the capital one card is not yet on her report (she just got it) so the lender scores are not including either of those. The only other thing on her report after the bankruptcy are 3 accounts that are paid off from a furniture store, all on time payments.
There wouldn't be too much improvement after 6 months of use because of the BK. But if she doesn't have any CCs reporting, opened or closed, then she might see a bump due to improved mix. IMO and IME, there's nothing wrong at all with secured CCs. That'd be the route I'd go.
Okay, thanks. This will be the only card she has right now, before this card she had no open tradelines so hopefully that will help some. I'll just keep an eye on her FAKO scores for the next few months to get a general idea of where she's at. I'm a fan of secured cards when necessary also, is there another one you'd suggest her opening (that doesn't require too much of a deposit)? I went with capital one because it's the first card I started out with and they have low deposits (mine was only $49 a few years ago, hers was $99).