Signs up with Fingerhut

[Anonymous]

After thinking about it for a week I finally did it. I was approved for the fresh start program with a 300$ limit so I bought some sunglasses for 150$. I plan on paying them off within a few month and then hopefully they will turn my account into a real one.

my credit score is at about 605 with my Capone quicksilver and my car loan and personal loan, the question is how much will my credit score go about once they start to report ?

[HeavenOhio]

There'll likely be a small ding for the inquiry and the new account. Those points will come back relatively soon. But you should gain a scoring advantage by being able to have one of your two cards reporting a zero balance.

The 50% utilization is likely to hurt, though. I'd pay in full if possible. If you can't do that, I'd try to get the card's balance down to $86 (28.9% of your limit) or lower ASAP.

[Anonymous]

605 is with the inquiry already, I will pay half on the first bill

[HeavenOhio]

If there's time to do it before your new account reports, you could avoid the utilization hit by making that payment as soon as the transaction posts.

It seems to me that Fingerhut charges a lot of money for unnecessary items. I think that the best tack with them would be to only buy things one could pay for immediately. With revolving accounts, you don't need to pay interest to build credit.

[Anonymous]

Do not pif with fresh start. Generally it's a $30 down payments with the balance broken into 6 monthly installments.

Have helped several people start their credit rebuilding journey, three of which chose Fingerhut as an initial building block. Two paid for the full six months and we're graduated to "unsecured" accounts with cli's. The other pif'd after two months and stayed "fresh start" with same limit.

[HeavenOhio]

Interesting stuff.

I suppose it depends on what your goal is. The OP expressed a desire for an improved score, and that isn't going to happen with one of two revolving accounts at 50% utilization. I suppose a middle ground would be to keep utilization at 28.9% or below and pay over time after that. But from a financial standpoint, it makes little sense to pay interest.

Others have posted that Fingerhut doesn't qualify as predatory like Credit One. Their business model is to extend credit, and in exchange for that, charge too much for their products. I think if I were using Fingerhut to build credit, I'd use them to thicken my file, buy as little as possible, not worry about unsecuring or CLIs, and close ASAP.

[Anonymous]

Just a slightly off topic point and perhaps a piece of advice to the OP.  In your first post you said you made a $150 purchase that you plan on paying off in a couple of months.  I'm not sure if you're paying it off over time because you want to (which it sounds may be what this company/product wants you to do) or if you aren't able to pay it off immediately.  I'd strongly suggest if the answer is the latter that you begin to adopt a PIF philosophy now while your credit limits are low.  This way you can form healthy credit habits and behaviors before you grow your limits and potentially put yourself in a position to incur financial/debt strain.

[Anonymous]

Harvey has passed somewhat and I can explain a little more clearly. Fingerhut is very good for those beginning their credit journey as they generally give a decent sized cli within 60 days after paying off the first purchase, reducing usage and increasing credit worthiness. My wife qualified for $700 'unsecured' bought a sheet set for around $40 that had free shipping and used a code for 20% off. She pif'd and received a $400 cli. Net gain was a new $1100 credit line and avg of 62 pt gain across her very thin profile.

Her bestie on the other hand only qualified for $250 fresh start. The instructions were very clear: a $30 deposit on initial purchase of over $50 (required) and pay monthly installments of a minimum $5 per month until paid. Her purchase was set up on 5 installments. I instructed her to pay extra and get the balance to $25 in order to cut some of the interest. She got impatient and tried to expedite the process with a pif in second or third month. She is still in the fresh start program, $250 limit, would need to pay the $30 again just to make a purchase, a small bump on fico with no on VS.... simply because she violated the terms of the contract of credit that was extended when no one else would give her a chance.

A friend and former co-worker recovering from a bk also tried FH and received $300 in fresh start. Made a purchase, paid it down on initial payment to an even number of installments of the minimum $5, paid it off as agreed, graduated to a $500 line, made another purchase, pif'd, bumped to $800, almost 90 point gain on fico, got a CO plat, later a QS1, and now a few months later has a Disco with a 1k starting line.

Bottom line: It really is a "Fresh Start" both literally and figuratively. Use it right and it will help. Use it wrong and you've wasted money and a triple pull for almost no.