topic Re: Hello! New here...my story... in Credit Cards

Hello! New here...my story...

Anonymous — Tue, 24 Mar 2015 19:49:10 GMT

Hello everyone!

I have been lurking for some time now. I will try to make this post as short as possible. Got divorced and 2008/2009 I took a huge hit finacially. As a result my credit went to the dumps. Since then and up until this January I have been a cash paying person, saving like a mad woman, and finally back to a healthy and stable financial position! I had sold my home so I have been renting for the past 7 years. As a single mom of two, it is my big goal to get back to being a home owner. I wanted to make sure that I was back to being financially stable to start the process.

In December 2014 I started to monitor my credit score via EQ and checking for anything I needed to dispute. There were a few things I was able to dispute. But I still have about 3 ugly baddies that are in the process of being cleared. On top of that since I have not had a credit card in years it affected my score. I have been with BoA for 16 years so I went to my local branch to get a credit card. They offerend me the 99/500 secured card which I took. Havebeen using it for my usual budgeted groceries and gas and have been paying it in full each time. The cash rewards is awesome! And they waived the $39 annual fee. This new card made my score go up, so that was nice. It was a soft pull, too.

I wanted to wait three months before I checked to see my FICO 3B report and this is what I just got recently:

626 Equifax, 615 TransUnion, 627 Experian.

On Equifax it says I have 6 1/2 years average account.

I have 0 inquiries on Equifax and 2 inquiries on TransUnion

I applied at Sears and got a big NO. I called to recon and nope, they would not budge. Their score for me 639 and the baddies on there were the reasons. A little down about that, but that is ok, not the end of the world. Fair enough.

So after reading this board multiple times I got a wild hair and tried two things: shopping cart trick and the Chase preapproval site. Why did I do this? My goal is to carry few cards (no more than 3 to be honest) and continue to build my credit history in better standing before I try for mortgage.

Shopping cart trick only worked for Victoria Secret and for $500. Last night I did the Chase pre approval site and they offered me the Chase Freedom for $2200! To be honest, after the 500 cards, and big no from Sears, I was ecstatic to see this.

For now I am ok with my BofA, VS and Chase Freedom Card.

Now I shared this with you all in hopes that you can give me any advice or pointers as to how to maximize this re building credit phase of my life. I am excited and extremely grateful to be back on much better postion than I was years ago. I am not looking to get plethora of credit or extremely high limits. I am a huge saver and conservative with my money.

Thank you for reading this!

Bananas1

Re: Hello! New here...my story...

Shelly13 — Tue, 24 Mar 2015 20:01:55 GMT

Congrats on your steps of rebuilding your credit. It sounds like you are taking all the right steps to have healthy credit again. Really I would just keep making on time payments and in a year or so see where your at to take the next step.

Re: Hello! New here...my story...

Shelly13 — Tue, 24 Mar 2015 20:02:55 GMT

Oh and Welcome to the MyFico Community!!

Re: Hello! New here...my story...

CreditDunce — Tue, 24 Mar 2015 20:57:57 GMT

Do you have an open auto loan or other installment loan? If not, I would think about a small shared secured loan. FICO likes to see both installment loans and revolving aka credit cards. There are several threads floating around for the details on shared secured loans.

If you have ever had an American Express card (or been an AU on one), it would also be worth while applying for one of their cards. But only if you have a decent member since date (MSD).

PS. Sears may have done you a favor by not approving you. You really want credit cards that you can keep for the long term. Sears may not be around in 10-20 years.

pps. If possible, chart your FICO progress with the old FICO 04/98 scores. Most mortgages do not use FICO 08 scores. Different FICO versions can have very different scores.

Re: Hello! New here...my story...

IgnatiusReilly — Tue, 24 Mar 2015 21:08:07 GMT

First off, congratulations on all of your hard work. In the words of the Rolling Stones, time is on your side. Let your new cards age and increase the average age of accounts. Also, wait for your credit report to clear up. That should give your scores a nice boost.

I would avoid any more store cards. Check preapprovals at bank websites, and be patient! Good luck.

Re: Hello! New here...my story...

Anonymous — Tue, 24 Mar 2015 21:33:38 GMT

Thank you, Shelly13!

Re: Hello! New here...my story...

Anonymous — Tue, 24 Mar 2015 21:38:03 GMT

@Creditdunce,

I was afraid someone would suggest car loan. That's one thing I refuse. All my cars are paid in cash and I drive them till the wheels fall off.

Re American Express card....I was an authorized user in my ex husband 's account and it was closed in good standing. It's my only history with them and that was over seven years ago. Should I still try?

Duly noted on the store cards! I will try to increase the BoA card or graduate it to unsecured card.

How do I got about the old chart FICO 98 score???

Thank you!

Re: Hello! New here...my story...

Anonymous — Tue, 24 Mar 2015 21:58:49 GMT

Its usually the 04 score used for mortgages. If you buy the three bureau report from here (which you have done!) it now contains all sorts of other scores, Look for something like "All Industry Version (used in Mortgage Lending)"

Re: Hello! New here...my story...

LuckyBird — Tue, 24 Mar 2015 22:08:47 GMT

If I were in your position, I would definitely apply for an Amex because the back-dating could give your scores a serious boost. My personal recommendation since you're a single mom would be the BCP. Even though it has a $75 annual fee, that 6% on grocery is hard to beat. Also 3% on gas all the time, and at most department stores you'd probably be shopping at. Definitely my best "mom" card, lol!

Re: Hello! New here...my story...

Anonymous — Tue, 24 Mar 2015 22:17:40 GMT

Congratulations on your steps to rebuild!

Re: Hello! New here...my story...

Anonymous — Tue, 24 Mar 2015 23:56:59 GMT

Debbi -- what is BCP!

Re: Hello! New here...my story...

Anonymous — Wed, 25 Mar 2015 00:02:36 GMT

Amex Blue Cash Preferred

Re: Hello! New here...my story...

Anonymous — Wed, 25 Mar 2015 00:07:55 GMT

Oh! Still learning to decipher some acronyms, etc

Re: Hello! New here...my story...

LuckyBird — Wed, 25 Mar 2015 02:12:54 GMT

@Anonymous wrote:
Oh! Still learning to decipher some acronyms, etc

Sorry about that!

The more I think about it, the more I think an Amex would a great choice for you, if you're interested in getting a new card right now. Primarily because of the back-dating, but also because of the generous (and early) credit limit increases they are known for. This would also help you with utilization, which would give your score even more of a boost.

You can read about that here: http://ficoforums.myfico.com/t5/Credit-Card-Applications/The-Definitive-Amex-3X-CLI-Guide/m-p/1811071

Re: Hello! New here...my story...

Anonymous — Wed, 25 Mar 2015 02:35:46 GMT

Update.....tried the Express BCP and was denied. This is my last app. Do not want any more inquiries so gardening is what I'm doing now.

Re: Hello! New here...my story...

Anonymous — Wed, 25 Mar 2015 02:44:07 GMT

Try to get it recon'd - at least once

It's worth the 6% on groceries and 3% in gas.

Re: Hello! New here...my story...

LuckyBird — Wed, 25 Mar 2015 03:02:33 GMT

@Anonymous wrote:
Update.....tried the Express BCP and was denied. This is my last app. Do not want any more inquiries so gardening is what I'm doing now.

Sorry about that...

Keep it in mind for the future though. Good luck with your credit journey. I've been a single mom before & i know it's not easy to keep all the balls in the air.

Re: Hello! New here...my story...

Anonymous — Wed, 25 Mar 2015 03:07:38 GMT

Thank you, guys! I think I'm good for now

In the mean time I do like and appreciate this board a lot for useful information as I work back towards home ownership. And while being single mom can be tough, I really can't complain much! I'm blessed.

Re: Hello! New here...my story...

CreditDunce — Wed, 25 Mar 2015 03:26:09 GMT

Sorry to hear about the Amex denial. The reason why we recommend an Amex card is they back date it on your credit report using the current month and your MSD date. For example, if you were added as an Au to your Ex's account in July 2000 and open a new Amex card in March 2015, it will show up in your credit reports as being opened on March 2000. It would instantly be a 15 year old credit card account. This can give you an instant FICO boost.

Maybe you can try again in Jan 2016. You should have some good credit history by then. Just be sure to give it some time after you open the Amex card before you apply for a mortgage. The back dated Amex card will not fool anyone during the manual review for a mortgage.

I totally agree about buying a depreciating asset (car) with a loan. However, you are penalized by FICO for not having an open installment loan and open revolving credit lines. For most people, I don't think it matters much. But a few FICO points can mean a huge difference in your mortgage rate. Here is a thread with more details on the pluses and the minuses of a shared installment loan:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/penalized-for-not-having-installment-loan-what-does-this-mean/td-p/3151642

When referring to the FICO models used in mortgages I abbreviate it as FICO 04/98. I believe they use EX-98 and TU-04 and EQ-04 scores. If you are a member of DCU, they will provide free monthly EQ-04 scores. (It does cost a HP/INQ to join DCU, plus you have to make a small donation to one of their charities). Here is a thread with more details on the different FICO versions and what is currently available via myfico.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-many-flavors-of-FICO-Editions-versions-and-variations/td-p/1197617

Personally, I would wait for all of your baddies to be cleared up and at least 1 year of good credit history before buying any more scores. I think you will want 1 year of revolving (and ideally an installment loan) history before applying for a mortgage.

Re: Hello! New here...my story...

Anonymous — Wed, 25 Mar 2015 03:40:26 GMT

Thank you, CreditDunce, for all the great information. I wanted to try by the end of the year, but after much thought and reading more useful information on here, realistically it looks like I need at least one more year of solid credit history rebuilding and for sure making sure those baddies have fallen off.

Besides es a car, what is another way I can see about installment loan? I don't need a new or semi-new car for sure.