A few comments in no particular order:
- Personally I think Dave Ramsey is a charlatan who offers advice which hurts more people than it helps.
- Credit is a tool akin to a chainsaw, use it responsibly and you will reap the benefits, use it carelessly and it can hurt you, often badly.
- You've made a good start with your Mission Lane cards (but I'd put them on the chopping block as soon as you land some better cards), so there's one each; most folks around here will tell you to get optimal credit scores you'll need three cards each plus a small installment loan which can take the form of an SSL (more on this in a bit).
- I would suggest you apply for one secured credit card, say a secured Discover or if you're eligible to join NFCU, their secured nRewards card. Once both cards graduate both of these cards will be keepers for the long haul.
- For your third cards I would recommend applying for something like the CapOne Quicksilver or SavorOne cards (or one of each).
- Regarding the SSL (Secured Share Loan), if you join NFCU, use their offering, if not, join Pentagon Federal and use theirs. Either way, deposit some money in a savings account, let it age for a month, and then call them and take out the SSL for roughly the same amount (most folks seem to opt for $3,000 so they have longer repayment terms), then pay the loan down to under 9% (which will push our next due date out many months or years). I don't know for sure, but I believe SSLs can be opened up as joint accounts, so one SSL will be reported on both of your credit reports.
- Assuming you follow the above, in a few months you'll each have enough (i.e. three revolving lines of credit and one installment line) reporting to the credit bureaus which gives maximum scoring points.
- One thing not mentioned above is the benefits you'll gain from opting for such cards as listed above; during 2013 and 2020 I went nearly 7 years with no credit cards (I ultimately filed Chapter 13 in early 2015) and lived exclusively off my debit card. For me, the initial benefit I gained when I got my first card in July of 2020 was to be able to rent a car at a major airport and a nice hotel room; both were no-gos with a debit card. What I hadn't counted on were the cash rewards; in the three and a half years since I got my first credit card (post bankruptcy), I've earned well over $3,000 in cash back rewards against which I've paid exactly $0.00 in interest.
- Regarding your current and potentially future credit cards, keep treating them like a debit card, buy what you need, pay it off, rinse and repeat. Using this model you'll use the tool of credit to your advantage and never suffer any of the potential injuries careless use can cause.
@Tauren1 wrote:Yea, the Mission Lane is just a stepping stone, and being as we've been avoiding credit like the plague for over half a decade, all that glamour and stuff the wrap around that Credit Karma Guarantee gave us some false sense of security we were practically guaranteed approval, I guess thats the only reason we took the risk to apply.
I'm getting all kinds of pre-approvals on Experian's website for like Credit One bank, Capital One Quicksilver (I even got a preapproval for cap one for good credit products on their direct website too), I'm just too scared of that small print "Pre-approval does not guaranteed acceptance" and wasting a hard pull.
Also, say we do get one, or even two credit cards in the future. Whats the proper time to distance out the applications? Our Mission Lane was issued in October, paid in full every month since (Usually 2 payments a month to keep it under 10% utilization). Also, in the event we do get a better credit card, would we want to close the Mission Lane or let it sit, because I was under the impression closing a credit card could have a big impact to your credit score.
A few other comments:
- Your CapitalOne preapproval is highly likely to result in a new card in your wallet; they were my first unsecured card after my Chapter 13.
- Avoid the likes of CreditOne, they are pretty much a bottom feeder.
- Also, take anything CreditKarma presents to you with a huge grain of salt, and ignore their scores entirely, they are Vantage 3.0 scores and essentially worthless.
- And yes, a few months between applications is a good idea.
@Tauren1 wrote:@Horseshoez Really solid advice, and I actually read your journey post about your BK ride before I even posted, was pretty inspiring.
A few questions in regards to your suggestions. NFCU and Pentagon CU, are those for veterans or all applicants? I'm a veteran and have had a USAA CC with a small limit, but it was included in the bankruptcy as it was an all or nothing kind of deal.
Do you know if USAA is bankruptcy friendly after a period of time, or are there other options for veterans like USAA?
Thanks, yeah, my recovery ride was interesting and I started out pretty stupid by racking up lots of hard pulls with nothing to show for them but one secured card.
Regarding NFCU and PenFed, the former is exclusively for military members and their families, the latter can be used by anyone (I'm a member of both). Regarding USAA, I have no experience with them, but I have heard anecdotally they are not bankruptcy friendly.
And thank you for your service.
Keep us posted.
Check Cap One and Merrick Bank.
My first rebuild card was Cap One QS and I got a $3k SL.
GL!
