topic Re: Am I missing anything? (Rebuild Strategy) in Rebuilding Your Credit

Am I missing anything? (Rebuild Strategy)

DSBABC — Tue, 09 Aug 2022 05:18:06 GMT

I am attempting to rebuild, and I would appreciate any suggestions of what I might be missing, or what might need to be adjusted/done to reach my goal.

As many of you seem to be quite knowledgeable, I seek your input:

Thus far, I have

Credit Builder Products:

• Kikoff Credit (Jan. 2022) -- to report paid-in-full (0% utilization)

• Kikoff Credit Builder (Mar. 2022) -- to report paid-in-full (closed).

• Credit Strong Build-1K (Apr. 2022) -- to report paid-in-full (closed)

• SeedFi Credit Builder Prime (Aug. 2022)

Update (8/8/2022):

Closed CreditStrong + Kikof Credit + Kikoff Builder; all will report paid-in-full.

Credit Accounts:

• Auto Loan (Mar. 2022)

• NFCU nRewards Card (Secured) (Apr. 2022)

• Petal 1 Card (Unsecured) (May 2022)

• Sable Card (Secured) (May 2022)

Credit Utilization: 1%

Payment History: 100% (All Auto-Pay)

Hard Inquiries: EQ (6), EX (9) TU (6)

Derogatory: 1 (Aug. 2016)

Current Scores: 660 to 680

Credit Monitoring:

• Credit Karma (Vantage Score 3.0)(TU, EQ)

• CreditSesame(Vantage Score 3.0)(TU)

• WalletHub (Vantage Score 3.0)(TU)

• Experian (FICO 8)

Next Goal: 700+

Long-Term Goal: Return to 800+ (once upon a time, long long ago...)

Considering the accounts are so new, I assume that with increased account age, and continued payments, my scores may naturally increase, but I was hoping to help it along as much as possible.

So, am I missing anything; or is there anything that might be suggested?

Re: Am I missing anything? (Rebuild Strategy)

TheKid2 — Fri, 05 Aug 2022 17:19:13 GMT

Based on your information I don't see much to call a rebuild. If you only have 1 6 year old derog and your credit utilization is 1% I'm not sure why your scores would be so low. I guess newness and letting the acounts age.

You don't say where you get your scores or how you monitor your credit, though. What is that 1 derog? You're actually getting close to where you can EE.

I'd just sit and garden for the time being! Your scores will go up over time with continued on time payments.

Re: Am I missing anything? (Rebuild Strategy)

gdale6 — Fri, 05 Aug 2022 17:38:35 GMT

The derog and the newness of your new credit is why the Fico is where its at. What is the derog?

Re: Am I missing anything? (Rebuild Strategy)

DSBABC — Sun, 07 Aug 2022 16:05:51 GMT

@TheKid2 wrote:
Based on your information I don't see much to call a rebuild. If you only have 1 6 year old derog and your credit utilization is 1% I'm not sure why your scores would be so low. I guess newness and letting the acounts age.

You don't say where you get your scores or how you monitor your credit, though. What is that 1 derog? You're actually getting close to where you can EE.

I'd just sit and garden for the time being! Your scores will go up over time with continued on time payments.

I monitor through Credit Karma, Experian, etc.

Past credit card/student loan charge offs, dragged the score down; and those were only eliminated from Credit Reports around the start (Jan/Feb) of 2022, so fairly recently. No Bankruptcy, No Repo, No Foreclosure... just credit cards, and student loans, after a bit of catastrophe around 10 years ago.

The current derogatory is a past landlord/property manager who (directly) sent to collections an unknown claim of additional money owed -- several months after I moved.-- which I never owed, and they refuse to explain the debt they claim to be owed, or any legitimate basis for that supposed debt. I was up to date and nothing was owed when I moved; but they want me to pay an extra $3k without telling me the reason. They never contacted me, and they only sent it directly to collections, with no explanation, and they refuse to explain it, beyond just saying that it is "owed" (umm...for what?). That has been incredibly frustrating. I have been trying to get it removed all along, but each Credit Report dispute just confirms the debt with the Collection Agency (who claims it is owed); and no further information has ever been provided -- which it (obviously) should be clarified, but nothing is ever clarified or explained. Thus, I continue trying to dispute, and wait for it to drop off.

So, as of early 2022, my credit report looked empty, after everything dropped off, which created other issues of not having trade-lines open, which itself hindered opening new credit accounts -- hence why I've stacked up on Credit Building products, to add credit accounts, to have something (anything) reporting positive activity.

Everything is fairly new (6 months or less), from effectively having nothing being reported (other than past derogatory); and so, I presume it will increase as the accounts age, but I was hoping to setup as much as possible, to at least help it grow most/fastest with time.

Years ago, my credit was pretty solid, but a bit of catastrophe destroyed that, and only recently were things removed, and able to try to build back up.

While I know it takes time, my impatience is largely due to not seeing much score movement at all in the last couple months, and so I was thinking about what else I might do to help it along.

Re: Am I missing anything? (Rebuild Strategy)

mfinsmi1 — Sun, 07 Aug 2022 19:08:20 GMT

@DSBABC im not sure what these credit builder products are and how they report so what im about to say may not apply if these products cover this

.... but you need more diversity in your credit mix - my suggestion is do a secured savings loan (will add another installment account to your credit mix in addition to your auto loan) - also adding positive UNSECURED lines of creidt over time will also help boost your score. Seeing as you have several new accounts reporting i wouldnt suggest doing this part just yet - let your accounts age and down the line add some unsecured lines of creidt. But definitly look into adding an additonal installment loan to diverisfy your credit profile unless these credit repair products report as installment loans

Re: Am I missing anything? (Rebuild Strategy)

DSBABC — Sun, 07 Aug 2022 20:42:16 GMT

@mfinsmi1 wrote:
@DSBABC im not sure what these credit builder products are and how they report so what im about to say may not apply if these products cover this

.... but you need more diversity in your credit mix - my suggestion is do a secured savings loan (will add another installment account to your credit mix in addition to your auto loan) - also adding positive UNSECURED lines of creidt over time will also help boost your score. Seeing as you have several new accounts reporting i wouldnt suggest doing this part just yet - let your accounts age and down the line add some unsecured lines of creidt. But definitly look into adding an additonal installment loan to diverisfy your credit profile unless these credit repair products report as installment loans

You make good points.

Initially, I had nothing reporting, so I was just trying to jumpstart it a bit.

From what I saw initially, there didn't seem to be many available options of what could be added.

However, I'm starting to see how that my scores seem to be around the range where at least some options are starting to open to me -- and my goal is to achieve a mix, but I'm not sure what else to add.

(I'm thinking that another unsecured card + time, will likely help it).

As for those credit builder products:

Credit Builder Products:

• Kikoff Credit (Jan. 2022) -- reports as revolving credit / charge card.

• Kikoff Credit Builder (Mar. 2022) -- reports as a secured loan.

• Credit Strong Build-1K (Apr. 2022) -- reports as a secured loan.

• SeedFi Credit Builder Prime (Aug. 2022) -- reports as a secured credit line.

Re: Am I missing anything? (Rebuild Strategy)

FireMedic1 — Sun, 07 Aug 2022 22:40:28 GMT

@mfinsmi1 wrote:
@DSBABC im not sure what these credit builder products are and how they report so what im about to say may not apply if these products cover this

.... but you need more diversity in your credit mix - my suggestion is do a secured savings loan (will add another installment account to your credit mix in addition to your auto loan) - also adding positive UNSECURED lines of creidt over time will also help boost your score. Seeing as you have several new accounts reporting i wouldnt suggest doing this part just yet - let your accounts age and down the line add some unsecured lines of creidt. But definitly look into adding an additonal installment loan to diverisfy your credit profile unless these credit repair products report as installment loans

Little correction. Those rebuilder loans are installment loans. Only 1 is needed @DSBABC . More loans dont mean higher scores. You can close 3 of them if you want and can. Three cards and 1 loan get the ball rolling. Go from there.

Re: Am I missing anything? (Rebuild Strategy)

mfinsmi1 — Sun, 07 Aug 2022 23:08:08 GMT

@FireMedic1 @DSBABC yes as i thought since these products are savings backed installment loans - what i said is indeed pointless lol

Re: Am I missing anything? (Rebuild Strategy)

DSBABC — Tue, 09 Aug 2022 06:00:27 GMT

Good point. Initially, I opened each credit builder account just to add accounts reporting, but after considering the redundancy, and the way it reports having additional debt; I realized that it wouldn't really benefit me, in light of other accounts reporting.

Update: I closed the Kikoff Credit, Kikoff Credit Builder, and Credit Strong products, and each will report paid-in-full.

Re: Am I missing anything? (Rebuild Strategy)

FireMedic1 — Tue, 09 Aug 2022 08:37:45 GMT

@DSBABC wrote:
Good point. Initially, I opened each credit builder account just to add accounts reporting, but after considering the redundancy, and the way it reports having additional debt; I realized that it wouldn't really benefit me, in light of other accounts reporting.

Update: I closed the Kikoff Credit, Kikoff Credit Builder, and Credit Strong products, and each will report paid-in-full.

Nice. 3 less headaches to keep up with.

Re: Am I missing anything? (Rebuild Strategy)

DSBABC — Wed, 10 Aug 2022 06:37:57 GMT

@FireMedic1 wrote:
@DSBABC wrote:
Good point. Initially, I opened each credit builder account just to add accounts reporting, but after considering the redundancy, and the way it reports having additional debt; I realized that it wouldn't really benefit me, in light of other accounts reporting.

Update: I closed the Kikoff Credit, Kikoff Credit Builder, and Credit Strong products, and each will report paid-in-full.
Nice. 3 less headaches to keep up with.

Yea, what really put me over the edge of closing them was that I realized that CreditStrong (Austin Capital Bank) had only reported 1x since April (instead on monthly); and Kikoff didn't report to all 3 bureaus. To pay for a service, that isn't even performed, seemed a bit pointless -- especially when the Kikoff Credit actually increased my utilization (since I keep a $0 balance on all CC, paid before statement + due date, and Kikoff Credit left a small balance, paid off monthly).

Also, when applying for something recently, a lender comment was that it showed as if not much progress was being made towards paying off those small (credit builder) loans -- because the Credit Builder loans are designed for small payments, made over a long time -- but to the lender, it apparently raised a red flag, to appear as if I was having difficulty paying off a tiny amount, even though having solid income and almost no debt (only a car loan).

So, all in all, I think that was a great suggestion, that made a lot of sense, as I started looking into it.

Re: Am I missing anything? (Rebuild Strategy)

TRC_WA — Wed, 10 Aug 2022 07:56:55 GMT

@DSBABC wrote:

Yea, what really put me over the edge of closing them was that I realized that CreditStrong (Austin Capital Bank) had only reported 1x since April (instead on monthly); and Kikoff didn't report to all 3 bureaus. To pay for a service, that isn't even performed, seemed a bit pointless --

I've never heard of those credit builder products you mentioned and hopefully they didn't charge you too much. To pay for something like that I think is pointless. It's like people who pay credit repair companies to do the same disputing that you can do yourself.

Sounds like you're on the right track. Lots of good info here. I've done well with mine post Ch 13 and will have clean reports within the next 12 months or so.

Good luck!

Re: Am I missing anything? (Rebuild Strategy)

SuperFlyEDSguy — Thu, 11 Aug 2022 01:03:30 GMT

First, you need to get this derogatory removed if they cannot prove that you owe it!

That should be fairly easy provided that they don't have a judgement against you, however you'd likely know it if they did as it would show up in your credit reports. Start by writing the ex-landlord a letter to investigate the debt and to provide proof of the debt. If they don't respond or don't remove it, you could send a copy along with a letter to investigate with the CRAs. I'd include in that letter that the ex-landlord has not responded to a written request sent via US Mail - Certified Return Receipt Requested (RRR). Always use this service as it proves that the documents were sent and include a copy of the return receipt in your package. They have 30-days to investigate a request, however it's 45-days if you are disputing a line item on your free annual credit report(s). Call me old fashioned, but I find a nicely developed packet goes much further than requesting an investigation online!

Next up, you're banking with NFCU, an excellent choice, so use their services to your advantage!!! You can take out a "pledge loan" with them instead of using these secured loan services that many of us never heard of. The nRewards Card was smart, but ensure that you use it, pay it off regularly and they will eventually graduate you! It took me 13-months to graduate, so be patient. I got their "credit card trifecta" not long thereafter, maybe 18-months total to include the More Rewards AMEX and Platinum Visa cards. You'll likely be approved for a second, unsecured card right after graduating. Just DON'T apply for the Flagship Card as that will take some time! Back to the nRewards card, I paid mine off 2 or 3 times per month and tried to keep the utilization at any given time below 30%. I would strongly recommend putting a minimum of $1,000 down as your security deposit as it will show as much on your credit reports. Nobody but you and Navy Federal will know it's a secured card – maximize it!

As everyone is saying, it's all a waiting game, and that's very much true. You could get some more accounts strategically and though they will cost you more HPs, they also will show positive credit usage and aging. I'd try to show a variety, at least right now. Use what you have and this is the important part:

Keep your utilization as low as possible – meaning 7% or less is ideal, 10% is good, and under 30% is pretty much a must! You'll be amazed how much a couple hundred bucks showing as balances could swing your score at this juncture.

Another idea for a reputable loan is the Upgrade Card as it shows like a Personal Line of Credit (P-LOC). The interest is on the higher side, but it's an easy way to show that you could manage a P-LOC. Basically, this product works like a credit card for purchasing, but you pay it back as a loan as the end of the month balance is turned into equal monthly payments. They are VERY likely to ask for documentation, but are not hard to get, IMHO. As long as you're not self-employed the application process is not too bad.

Next up, I've been getting better-and-better cards for two years now, and I've used the card recommendations on Credit Karma to my favor. They were very accurate in my case! I would NOT use the recommendations from Experian as they are still offering me subpar cards! Capital One usually gives everyone their first "Unsecured Platinum Card" with a $300 limit, more if you're very lucky. Honestly, I wouldn't worry too much about the HPs if you're showing some strong growth as they too will drop off. The thing is to put MORE weight into those HPs if you expect to use credit to fund a major purchase such as a car loan or home mortgage.

The bottom line, IMHO, is to get that report cleaned spotlessly! It will be far easier to get new credit with it off of there. Based on what you said, I'd start the disputed in a "one-two combo" to ensure that you have the necessary backup to bring to the CRAs if it comes to it, and it likely will as they haven't replied back thus far. Use a strong letter, so start looking for quality templates to work with. Now, it's different though as you'll have a plan. In the meantime, take advantage of what NFCU offers as I mentioned above! Let everything else garden while waiting for that derogatory to be removed. Once removed, try for a couple unsecured cards based on reliable recommendations and let it all garden after that! My signature (below)has many of the credit products that I took advantage of while in a similar boat. Just try to avoid annual fees and the like whenever possible, personally $39 is even a stretch, but may be do-able. Feel free to DM me with any questions, but I may take a while to reply as I never know how I will feel from one day to the next. That's a long story all it's own though!