topic Re: Approved for credit card, trying to rebuild, now what? in Rebuilding Your Credit

Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Tue, 23 Feb 2021 20:27:00 GMT

Thanks to the very smart people in this community, I was just approved for a $500 Captial One Platinum card.

Here is my quick story:

Scores between 570-590

Not much to dispute (maybe one or two things)

Student loans are HUGE

Only car as open credit line and JC Penny card that is my parents and I am only really on their card for the credit history. They put me on there when I was 20, I am 50 and still on LOL….

Credit seemed to stall because of no credit lines…

It has been a long time since I had a credit card. My understanding is to:

Keep utilization below $50 (10% or cred line)
Pay on time each month
Use card each month

Any other tricks or trades I need to know? I will also post this question in the other thread.

THANKS TO YOU ALL!!!

Re: Approved for credit card, trying to rebuild, now what?

AllZero — Tue, 23 Feb 2021 21:30:36 GMT

Do you have any derogatory or delinquency that needs to be addressed?

Re: Approved for credit card, trying to rebuild, now what?

RSX — Tue, 23 Feb 2021 21:33:43 GMT

welcome!

you should get a secured card as well from a bank or CU - nothing crazy high, $2-500 should do - research which ones will graduate to Unsecured before getting it

use the card as much as you want - it is only when the statement posts that you want it under 8%

you can run it up to $3 or $400 and pay off multiple times in the month if you want

before you dispute anything (which they make all too easy on CK), make sure it really is a mistake - do NOT dispute anything that is valid

good luck on your rebuild!

Re: Approved for credit card, trying to rebuild, now what?

simplegirl — Tue, 23 Feb 2021 21:53:39 GMT

You do need 3 revolvers under your name to maximize points.

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Tue, 23 Feb 2021 23:05:41 GMT

1 and I am addressing them

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Tue, 23 Feb 2021 23:07:30 GMT

So I have JC Penny, this new card and you are suggesting one more revolving credit? I will try for secured. Sure I do now or wait a bit. My score will take a hit today from the credit card I was just approved for... Thanks

Re: Approved for credit card, trying to rebuild, now what?

simplegirl — Wed, 24 Feb 2021 00:27:43 GMT

@NicoleMichigan wrote:
So I have JC Penny, this new card and you are suggesting one more revolving credit? I will try for secured. Sure I do now or wait a bit. My score will take a hit today from the credit card I was just approved for... Thanks

It is better to get them around the same time so that your average age of accounts doesn't drop again but that is just how i look at it. But yes 1 more card is needed to maximize your points toward your scores. Also you can practice azeo (All zero except one).

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Wed, 24 Feb 2021 03:58:53 GMT

Ok explain azeo? Newbie here.... My other thought (instead of getting the 3rd now) was to wait 6+ months until my score recovers from this inquiry and until I have started a good payment history to apply for the 3rd card that would offer good rewards and travel points since I travel quite a bit to maximize that benefit too. Thoughts?

Re: Approved for credit card, trying to rebuild, now what?

simplegirl — Wed, 24 Feb 2021 04:05:04 GMT

That is a good plan and azeo is when you have multiple credit cards with a zero balance except one card which would report a $10 balance.

Re: Approved for credit card, trying to rebuild, now what?

AllZero — Wed, 24 Feb 2021 04:32:22 GMT

@NicoleMichigan wrote:
1 and I am addressing them

Your course of action may depend on the age of the delinquency or derogatory or if it is updating monthly. If updating monthly, you may want to address it before credit seeking to improve odds at approval for unsecured products.

In ~3 months time, see if you can do a product upgrade from Platinum to Quicksilver (not the Quicksilver One with the annual fee). Capital One check for upgrade link

Re: Approved for credit card, trying to rebuild, now what?

Anonymous — Wed, 24 Feb 2021 21:53:09 GMT

You’re score doesn’t recover from an inquiry for 365 days. While you may gain points by 6 months, it won’t be from the inquiry.

Having 3 bankcards gets rid of the too few bankcards Penalty. A JCPenney PLCC card will not get rid of that penalty or count towards that metric; it is a Revolver, but it is not a bankcard.

The number of bankcards you have is a Scoring Metric. No one knows the optimal number. It is believed to be ~4. Bankcards are Revolvers, but revolvers aren't necessarily bankcards.

Number of revolvers is significant as well because the higher the number, the lower the thresholds you can hit when implementing AZEO. (many people suggest at least 3 revolvers, so that you can hit 33%, but there are lower thresholds version depending.) JCPenney does count towards this number; it is a Revolver.

I recommend at least 5 total Revolvers with at least 4 of those being bankcards. 3 revolvers will allow you to hit the 33% of accounts with a balance threshold, but it will not get rid of the too few bankcards Penalty.

Edited for clarity. 2.24.21 4:52pm

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Wed, 24 Feb 2021 14:07:05 GMT

I am almost there. What do you mean one card will report a $10 balance? The other cards won't get closed for non activity? Thanks again for being patient with me...

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Wed, 24 Feb 2021 14:15:11 GMT

Wow. Ok, this is a lot of information. Good information, but a lot. If I understand you correctly, JC Penny IS a revolver but not a bankcard so it won't count for my 3. I now have a new one, and my goal shall be to get 2-3 more to get rid of that penalty for having low revolving credit. I will take babysteps with that and work to get there in the next 12-18 months.

Secondly, I understand you saying that once I have all 3 bankcards, this is a bit of a formula that goes into how it improves my credit. Part of that formula is the utilization of the cards. I will put a push pin into that and check back with this thread when I am there (having 3 cards) but I appreciate the knowledge, adds some things to think about.

Finally, can you give me advice on what I should do with this one card (utilization, day to pay, how much to pay, etc.) so that I can at least get the benefit out of that...

Oh and one other thing. Capitol One has inquiries on my report that I did not make. What should I do about those? If there are within a year, are they still impacting my score? I have other inquires that are two years old that are STILL on my report. Are they impacting my score?

Ok...finally, finally I will look at the deragatory mark to see if it is reporting monthly. If it is, I will make it a priority to remove.

Re: Approved for credit card, trying to rebuild, now what?

Anonymous — Wed, 24 Feb 2021 21:49:13 GMT

@NicoleMichigan wrote:
Wow. Ok, this is a lot of information. Good information, but a lot. If I understand you correctly, JC Penny IS a revolver but not a bankcard so it won't count for my 3. I now have a new one, and my goal shall be to get 2-3 more to get rid of that penalty for having low revolving credit. I will take babysteps with that and work to get there in the next 12-18 months.

Secondly, I understand you saying that once I have all 3 bankcards, this is a bit of a formula that goes into how it improves my credit. Part of that formula is the utilization of the cards. I will put a push pin into that and check back with this thread when I am there (having 3 cards) but I appreciate the knowledge, adds some things to think about.

Finally, can you give me advice on what I should do with this one card (utilization, day to pay, how much to pay, etc.) so that I can at least get the benefit out of that...

Oh and one other thing. Capitol One has inquiries on my report that I did not make. What should I do about those? If there are within a year, are they still impacting my score? I have other inquires that are two years old that are STILL on my report. Are they impacting my score?

Ok...finally, finally I will look at the deragatory mark to see if it is reporting monthly. If it is, I will make it a priority to remove.

@NicoleMichigan that is correct JCPenney is a Revolver, but not a bankcard, unless it's the MasterCard/Visa version.

Therefore it does not count towards your 3 bankcards that you get penalized until you have. It does help AZEO, specifically the number of accounts with a Balance.

Yes, your goal should be at least 5 revolvers, with at least 4 of those being bankcards imo. So you already have 1 bankcard and 1 non-bankcard Revolver. You need 3 more bankcards and you're good for minimum bankcard and revolver recommendations.

then of course there's always a recommendation for at least 1 loan and you get the most points out of it on 8/9 when it's under 10% utilization.

there's also indications that until you have a total of 7 paid as agreed accounts on your record, (closed ones count) that you don't have enough established payment history for minimum optimal requirements.

So if you have your 5 clean revolvers and you have a clean loan, that's 6 right there. And if you've ever had any good account before, you have more than that already. If not, in time you'll probably get another loan.

yes reported utilization is extremely important. Preferably you only want one bankcard reporting a balance, $20 is fine. I usually recommend between five and $20 but as long as you're under $100 you're good. You can use it all you want to spend all you want just make sure it's paid down that amount when the statement closes. You can use your entire credit limit multiple times and pay it off multiple times throughout the month if necessary.

if you did not do anything to cause capital one to put an inquiry on your report then you need to contact them and have them remove them and if that doesn't work you'll have to move forward to a dispute.

Scorewise inquiries affect score 365 days. However they are on your report for 24 to 25 months.

yes if it's reporting monthly, make it a priority.

when you get time, read the Scoring Primer linked at the top of my signature, it will teach you a lot. Good luck! Make sure and come back and tell us of your success!

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Wed, 24 Feb 2021 21:22:40 GMT

I will. I appreciate you (and everyone else) so much.... It was because of this group that I built my home 12 years ago. Nasty divorce, starting over again...

Quick question. I remember somewhere on this site you could find out when the statement closes for different credit cards. Is it the same for all cards, or a different date for different users? Would the CC company give me that information? I want to know when it CLOSES right, not when a new bill is generated each month.

Re: Approved for credit card, trying to rebuild, now what?

simplegirl — Wed, 24 Feb 2021 21:36:39 GMT

It is different but you can find out when it closes by looking at the date on your credit report under last payment or through you bank statements which would be the date that it goes through like for me my citi bill is due on the 27th and reports on the 1st. Also my capital one is due on the 20th and reports on the 26th. I guess the common denominator is it reports 6 days after your due date but i would make sure.

Re: Approved for credit card, trying to rebuild, now what?

Anonymous — Sat, 27 Feb 2021 18:47:36 GMT

@NicoleMichigan wrote:
I will. I appreciate you (and everyone else) so much.... It was because of this group that I built my home 12 years ago. Nasty divorce, starting over again...

Quick question. I remember somewhere on this site you could find out when the statement closes for different credit cards. Is it the same for all cards, or a different date for different users? Would the CC company give me that information? I want to know when it CLOSES right, not when a new bill is generated each month.

@NicoleMichigan yes, you have a due date, a statement closing date, and a reporting date. For most creditors the last two are the same. But for some, like US Bank and Elan, they may be different. They for instance report the balance from the last business day of the month.

Most report the balance from the statement closing date, which is usually 4 to 6 days after the due date. The problem is it can change each month. Some creditors like American Express make it easy to see it from the app when the cycle is closing, some make it more difficult. But it's usually the same day give or take a day or two every month.

if you cannot tell from your app or website or latest statement, call, ask, or send a secure message asking what day the cycle closes and how to predict it with that lender, if necessary. Yes cycle dates vary for different people so.

Edit: @NicoleMichigan there are some creditors that have everybody cycle on the same day, like some credit unions, but I just wanted to make a note of that because we were discussing it and sometimes they are the same, but for most creditors they can be different for everybody, I think.

Re: Approved for credit card, trying to rebuild, now what?

Horseshoez — Sat, 27 Feb 2021 08:47:26 GMT

@NicoleMichigan wrote:
Ok explain azeo? Newbie here.... My other thought (instead of getting the 3rd now) was to wait 6+ months until my score recovers from this inquiry and until I have started a good payment history to apply for the 3rd card that would offer good rewards and travel points since I travel quite a bit to maximize that benefit too. Thoughts?

I spent a lot of time last year looking at credit cards which offer cash rewards or travel points and which had a reasonably good chance of approval for those of us with low credit ratings (I'm only 1-year past my Chapter 13 discharge), and to be quite honest, I found exactly one, and it was a secured credit card and only offered a flat 1% cash back. I travel a lot as well so if you've found a card which offers "good rewards and travel points", I'd love to hear about it.

Re: Approved for credit card, trying to rebuild, now what?

Anonymous — Tue, 02 Mar 2021 09:07:49 GMT

Keeping utilization low is great. Also, it's about the date that your balance is reported. So, you could use it for, let's say, a $100 purchase and then pay that down to $49 so that the balance you're carrying is less than 10% Utilization.

The utilization is about your Total Credit. That's the Under 10%. Still, use but low usage of your card is likely a good thing.

My first secured card last summer, I would use it and pay it off 3x in the month to avoid the interest.

Set up Auto Pay is always a good thing to catch yourself should something happen. Just a safety net.

You may make payments more than once a month. 2x a month could prove beneficial.

Congratulations!

Re: Approved for credit card, trying to rebuild, now what?

NicoleMichigan — Tue, 02 Mar 2021 14:40:41 GMT

So I am looking for 3 dates. The date it closes, the date it is reported and the due date? Geez lol...

How do you find all of this out. I know the due date is on the bill. But how do you find out the date it closes and the date it is reported? I am assuming reported means to the 3 Credit Bs?

THANKS