Re: This dormant flower is ready to be replanted
09-28-2012 12:00 PM
Good work on getting the secured CC through your bank. You might have tried to get an unsecured with them since you already bank with them, but alas you already applied so it might be too late. Secured cards are obviously easier to get because they are guarenteed at least the same amount of money as you spent if you bounce out on them.
Keep that card for 6months or so and then ask them if you qualify for them to unsecure it (it will look much better than secured on a mortgage app or any other app for that matter.) Also work on building up that deposit - higher deposit equals an automatic higher credit limit. Hopefully it won't report as secured but either way, bump it up as high as you can go. I've heard some banks put it in a CD or something that will earn interest that you get to keep when it unsecures or when you close the account. So every month try to put $100 or whatever you can afford towards the deposit and build it slowly.
This will help two ways - 1 it will help lower your credit utilization which with 1 card at only $500 means that if you spend more than $50 your over 10% utilization which will hurt your score. Utilization only matters when your going to apply for credit since it changes every month but its still a sound practice to make sure no more than 9% posts.
Builiding your credit limit also shows other lenders that you can handle that amount of money. If you keep it at $500 for 10 years other banks will look at it say "why didn't they ever give her more? they will be reluctant to give you a higher credit limit. If you get it over 1000 that will start to make it easier to step up the CC ladder which will in trun help your utilization as well.
After a couple months of building up that credit limit, check where your scores are at. your file will still be pretty thin with only 6 months age, but its better than nothing. But go and app for a couple cards (at that point switch over to the CC forum here on myfico and give your current situation and they will let you know what cards to think about and what ones to not even try). apply for 1 or 2 cards 6-12 months from now and hold onto those cards if you get them for another 6-12 months and let them grow. By that point you will have shown you have experience with credit on mutliple tradelines, hopefully your auto loan will still be reporting and that 1-2 years will help you save up much more for a down payment. If you can wait another year or two beyond that and keep your nose clean (credit wise) then you'll have a solid portfolio.
Just remember keep the apps for credit down new credit drops your average age of accounts - since its an average (duh). So once you get a card, let it age a bit then when you add 1 or 2 let them age for a bit and just be patient.
Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three