topic Re: Building credit from nothing w/ past debts in Rebuilding Your Credit

Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 00:41:31 GMT

Hello everyone, this is my first post FYI.

Basically, I have 5 items that are currently unpaid across all 3 CRs. One bill from sprint for 560 (TU), a medical bill for 380 (TU), a Medical bill for 255 (TU and EX), a medical bill for 16 (EX and EQ), and lastly a comcast bill for 41 (EX and EQ).... Today I spent the whole days making calls seeing what can be done about these bills. Sprint for 560 agreed to let me pay half, so I will be doing that when I get paid on friday. The two bigger medical bills atm aren't really willing to do anything for me and I paid the 16 dollar medical and the 41 dollar comcast bill in full. If the remainding medical bills won't give me a break it might take me a couple checks to pay them off, but no matter what I want to get rid of that sprint bill on friday, because I am aware that non-medical look worse than medical bills. My real question is, should I get a secured credit card as soon as possible or should I wait until EVERYTHING is paid off and removed from my CR? Sidenote: I have no credit scores whatsoever. If you run my credit report it will obviously point out the debt but it will also say that I don't have a sufficient enough credit history to even generate a score. I have been told this is a good thing because it's like starting from scratch. So, I'm not sure if my score will rise quicker if all the debt is gone before starting out w/ a card or not. I figure it is DEFINITELY in my best interest to get rid of the non-medical before obtaining a card though. I apologize if I gave more information than necessessary but any guidance or info anyone has for me would be greatly appreciated.

Thank you,

Shamrock

Re: Building credit from nothing w/ past debts

Rebuilding69 — Tue, 29 Sep 2015 03:59:39 GMT

I don't have any experience with secured cards, but building your profile with cards should be done earlier not later. That plus fixing anything listed on your report should be done concurrently imo.

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 04:12:30 GMT

@Anonymous wrote:
Hello everyone, this is my first post FYI.

Basically, I have 5 items that are currently unpaid across all 3 CRs. One bill from sprint for 560 (TU), a medical bill for 380 (TU), a Medical bill for 255 (TU and EX), a medical bill for 16 (EX and EQ), and lastly a comcast bill for 41 (EX and EQ).... Today I spent the whole days making calls seeing what can be done about these bills. Sprint for 560 agreed to let me pay half, so I will be doing that when I get paid on friday. The two bigger medical bills atm aren't really willing to do anything for me and I paid the 16 dollar medical and the 41 dollar comcast bill in full. If the remainding medical bills won't give me a break it might take me a couple checks to pay them off, but no matter what I want to get rid of that sprint bill on friday, because I am aware that non-medical look worse than medical bills. My real question is, should I get a secured credit card as soon as possible or should I wait until EVERYTHING is paid off and removed from my CR? Sidenote: I have no credit scores whatsoever. If you run my credit report it will obviously point out the debt but it will also say that I don't have a sufficient enough credit history to even generate a score. I have been told this is a good thing because it's like starting from scratch. So, I'm not sure if my score will rise quicker if all the debt is gone before starting out w/ a card or not. I figure it is DEFINITELY in my best interest to get rid of the non-medical before obtaining a card though. I apologize if I gave more information than necessessary but any guidance or info anyone has for me would be greatly appreciated.

Thank you,
Shamrock

Absolutely get a secured CC as soon as possible - get two! And then get a third!

Seriously you need to have three revolving credit card account to boost your scores faster. I would suggest beginning with Open Sky. Stay away from Credit One and First Premier, no matter how tempting they may be.

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 05:17:05 GMT

I've read a lot of bad stuff about blue sky. Such as bad customer service, take forever to post payments, website difficult to use, etc. What are your reasons for disliking capital one? If it matters, I don't give a **bleep** about interest or annual fees or anything, I just want to build the credit even if that means paying a little more. I know I would definitely prefer a card that would graduate to an unsecured card.

If I wait until all I have left is two active medical collections do you think I might qualify for an unsecured card?

Re: Building credit from nothing w/ past debts

gdale6 — Tue, 29 Sep 2015 16:08:18 GMT

@Anonymous wrote:
I've read a lot of bad stuff about blue sky. Such as bad customer service, take forever to post payments, website difficult to use, etc. What are your reasons for disliking capital one? If it matters, I don't give a **bleep** about interest or annual fees or anything, I just want to build the credit even if that means paying a little more. I know I would definitely prefer a card that would graduate to an unsecured card.

If I wait until all I have left is two active medical collections do you think I might qualify for an unsecured card?

Credit 1 and First Premier are vulture banks that charge outrageous fees for issuance and maintenance of the credit issued to you. Cap-1 isnt like them at all but their secured doesnt graduate. For secured I would just get them you want to start building your history ASAP you might have a shot with Cap-1 unsecured with your proposal just would depend on how old their are. Welcome to the forum

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 16:23:20 GMT

The two medical bills are from February of 2012

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 16:35:52 GMT

Do you agree with the recommendation to get 3 cards right away lol

Re: Building credit from nothing w/ past debts

gdale6 — Tue, 29 Sep 2015 16:49:17 GMT

@Anonymous wrote:
Do you agree with the recommendation to get 3 cards right away lol

ASAP yes you need to start building your positive credit history. Since those medicals are from 2012 and if they are not updating monthly I would try to get the Cap-1 Platinum card once you are left with just the medical CAs since this is only 1 unsecured I would open your 2 secureds ASAP.

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 17:25:10 GMT

Which secured would you recommend

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 17:35:00 GMT

@Anonymous wrote:
Hello everyone, this is my first post FYI.

Basically, I have 5 items that are currently unpaid across all 3 CRs. One bill from sprint for 560 (TU), a medical bill for 380 (TU), a Medical bill for 255 (TU and EX), a medical bill for 16 (EX and EQ), and lastly a comcast bill for 41 (EX and EQ).... Today I spent the whole days making calls seeing what can be done about these bills. Sprint for 560 agreed to let me pay half, so I will be doing that when I get paid on friday. The two bigger medical bills atm aren't really willing to do anything for me and I paid the 16 dollar medical and the 41 dollar comcast bill in full. If the remainding medical bills won't give me a break it might take me a couple checks to pay them off, but no matter what I want to get rid of that sprint bill on friday, because I am aware that non-medical look worse than medical bills. My real question is, should I get a secured credit card as soon as possible or should I wait until EVERYTHING is paid off and removed from my CR? Sidenote: I have no credit scores whatsoever. If you run my credit report it will obviously point out the debt but it will also say that I don't have a sufficient enough credit history to even generate a score. I have been told this is a good thing because it's like starting from scratch. So, I'm not sure if my score will rise quicker if all the debt is gone before starting out w/ a card or not. I figure it is DEFINITELY in my best interest to get rid of the non-medical before obtaining a card though. I apologize if I gave more information than necessessary but any guidance or info anyone has for me would be greatly appreciated.

Thank you,
Shamrock

Welcome to the forums!

A point that hasnt been made earlier is that your 'credit history' is 35% of your Fico score and its important to get that cleaned up, as you're doing.

Another category is your 'current accounts' and it is 30% of your score.

You can and should pay attention to both of these categories at the same time and they contribute independently to your score.

In the current accounts category, the Fico scoring system looks for 3 or more revolving accounts like CCs. A secured card counts the same as an unsecured card. At this point, the amounts are not important, just that they are in good standing and report to all 3 CRAs, as most do.

Every time you open a CC for the first 3, your scores will see an increase and you will establish a history.

If you can get a CC, you need to have one report a small amount, as in less than 10% If you have more than one CC, let the others report at zero and just one at less than 10%. If they all report at zero, you will lose some of the points you gained by opening them.

Another category is 'credit mix', worth 10%. Fico looks for 3 CCs, one installment loan, and a mortgage. You will get a score increase for satisfying these conditions.

So, by opening CCs, you will get score contributions from the 'current accounts' category and also a little from the 'credit mix' category.

At the top of this forum is a sticky thread about helpful rebuilding tips. Inside that one is a link to a chart showing many of the secured cards available.

I am eligible for membership in USAA and I have a secured card with them for 250. I was denied a regular CC from B of A and they made a counter offer that I get their secured CC. The B of A will graduate but the USAA does not. I felt it was important for e to build a relationship with each of them.

HTH

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 17:53:47 GMT

Almost forgot -

An excellent way to get established with credit -

You can join the State Department Federal CU and get membership using the 'who can join' link, which is open to everyone that complies.

You can deposit 500 in an account and then borrow 500 in a secured loan, paying it back at 14 a month for 36 months.

You can take the proceeds of the secured loan and use it as collateral to get a 500 secured CC.

That is a lot of mileage out of 500 bucks.

This would give you both a CC and an installment loan, (two categories of credit scores) and also build a relationship with a great organization that will reward you in the future with other financial products, like an auto loan and other CCs.

I joined SDFCU in about 10 minutes and established a small deposit account with them

HTH

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 19:30:01 GMT

@Anonymous wrote:
I've read a lot of bad stuff about blue sky. Such as bad customer service, take forever to post payments, website difficult to use, etc. What are your reasons for disliking capital one? If it matters, I don't give a **bleep** about interest or annual fees or anything, I just want to build the credit even if that means paying a little more. I know I would definitely prefer a card that would graduate to an unsecured card.

If I wait until all I have left is two active medical collections do you think I might qualify for an unsecured card?

I have no problem with Capital One, its CREDIT One that I despise. They are wholly owned by Sherman Capital, a very large junk debt buyer - the enemy as far as I am concerned. I won't do business with a company that ruins people with one hand then offers credit at predatory terms with the other. If you are willing to do that, thats your choice, just know who you are climbing in bed with.

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 19:33:58 GMT

Oops I confused capital one and credit one, MY BAD. excuse my foul language too, I'm not used tp posting on forums

Re: Building credit from nothing w/ past debts

gdale6 — Tue, 29 Sep 2015 20:57:57 GMT

@Anonymous wrote:
Which secured would you recommend

I like the secured card offered by SDFCU but Im pretty sure it doesnt graduate, I do know its a SP if you put the money in savings and open it up by calling in, We have a database of secured cards on this site you might want to take a look at it too.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Secured-Cards-Database/td-p/3846302

Re: Building credit from nothing w/ past debts

Anonymous — Tue, 29 Sep 2015 21:04:19 GMT

Oh and it has to be one thst doesn't require a checking account

Re: Building credit from nothing w/ past debts

Anonymous — Wed, 30 Sep 2015 00:13:59 GMT

When you say report a small amount, you mean the amount that the credit bureau is led to believe im using each month right? Not a balance? I keep hearing the number 30% is what you want the CBs to see

Re: Building credit from nothing w/ past debts

Anonymous — Wed, 30 Sep 2015 03:27:44 GMT

@Anonymous wrote:
When you say report a small amount, you mean the amount that the credit bureau is led to believe im using each month right? Not a balance? I keep hearing the number 30% is what you want the CBs to see

We are suggesting that you show a small amount of less than 10%.

Find the reporting date when the statement cuts, because that is what will show on your CRs.

You will get the best score with only one CC reporting a balance of less than 10%. if the due date is after the statement date, you can pay it off if you want to avoid interest charges. Then start the routine again for the next month.

Most CCCs like to see usage on their CC. You can charge up to the CL and then pay it down before the statement date. Some people actually run it up and pay it down multiple times within the month, but strive to show less than 10% for the statement date. This will show the card issuer that you can handle the credit and influence them to increase your CL.

If you go to 30% UTI, you will not get as many points as if you kept it less than 10%. If you go around 85 or 90 %, it will be considered maxed out and you will lose several points. If you have all CCs report at zero, you will lose some points. Nine percent or less is considered the magic number.

You want your total UTI to be under 10% and each CC to also be under 10% for reporting.

Many people try to get 10 times the amount of credit they predict they will need so that their UTI will stay low, making their scores stay up.

HTH

Re: Building credit from nothing w/ past debts

Anonymous — Wed, 30 Sep 2015 03:59:23 GMT

Oh okay wow, that made perfect sense. I just applied for n was approved for a capital one secured, just gotta wait til payday to put the deposit down