Hi, everyone. I'm new on the boards although I've been lurking a little. I'm a rebuilder after a very long 10 years of self-employment/small business problems and not very much credit (one sub-prime card with low limit) and fun stuff like 14% auto loans. Recently, I finally got tired of shredding all the Cap One pre-approvals coming in the mail, and so, on a lark, last December I applied. To my surprise got the Platinum Mastercard with a $2k limit. Since that was successful, I applied for and got a Miliestone Gold Mastercard with a $300 CL. Then I started checking scores and realized it was time to start working on it and get back some control.
Past history: not too good. I won't go into all the reasons and difficulties, but we are self-employed and income is irregular--it's always either feast or famine. During the mid-2000s we had to file chap 13. It was a bad advice (from the IRS) and we ended up letting it be dismissed. We had high credit scores prior to that, and nobody got burned because of the bk, but most of our credit cards (even Cap One) got closed anyway. I don't know why, but the good accounts have disappeared from our CR. Two baddies are still there.
Two years ago our 27-year-old mortgage went into forbearance. They told us NOT to make any payments during consideration and the process took a number of months. After approval, we had a 3-month "trial." So, then they reported it as unpaid all that time--so there's like this long streak , 7 or 8 months!!, of big red circles. However, the loan was successfully modified, we've had 17 months of perfect payments, and the balance on it is less than $20k.
Besides the mortgage, there are still two baddies left (plus EQ won't let go of the bk until April 2017). One will roll off in Oct (Exp rolled it off early). I'm not sure what to do about the other, but that's another discussion. Until we figure out the best way to handle it, it's still showing as a charge-off for a couple of years.
We would like to pay off the mtg next summer, sell the house and buy a new one. My goal is to get this all cleaned up and scores raised by then so the mortgage process won't be so hard. We won't be clean enough for a conventional loan by then (mainly because of the current mortgage lates), but we will only need to finance about 25-30%. My husband is a disabled vet, so we're eligible for a VA loan with lower score requirements. Just need to get those scores up.
So, my questions: when you start rebuilding, how long should you garden? And who's good to go for next? What can we do to improve our position by then?
I currently have 4 cards (two are AU). I'd like to get rid of the sub-prime card. Cap One's auto CLI bumped me to $5k, so total available credit is about $8,000 with hubby's auto CLI coming up next month. No lates or misses. Util is at 9%. AAoU is excellent (28 years). We use cards frequently and run small balances or PIF. No other open accts except the mtg. 2 hard pulls in 2 years. FICOs today are 682 EX, 666 EQ, 642 TU. EQ and TU should catch up with Exp in Oct. I was planning to wait till then, but from reading on here, I'm wondering if I should go for more now to get a score bump sooner, and to have a few more months for the AAoA? I got such a big bump from Exp when I got the Cap One CLI that I'm thinking maybe the sooner, the better.
I've been looking at Discover It, Barclay's, Cap One Quicksilver. One? Two? Maybe a store card? Walmart, Lowe's, Amazon? I don't really know how hard it is to get any of these cards. I think I'm pre-qualified for Discover and QS1, but the last thing I need at this point is a decline, so I don't want to rush--just wanna get going if it will help.
Any suggestions or advice? All help appreciated.
Starting Score: 640