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Your brother is right -- but I'd go a step further and say not to apply to any of those tradelines you've listed. Stick to bank-issued cards. Start off with secured if necessary, wait 6 months to build a solid, positive payment history, then apply for an unsecured card. You need bank-issued credit cards on your reports; I'm not sure how the tradelines you've mentioned code - whether as store cards or consumer finance accounts - but neither reflect as well on both your scores and to lenders as bank-issue cards. You can save the money you'd spend on all the fees involved with those types of accounts and instead open one or a few decent limit secured cards - at least that way you'll eventually get your money back instead of essentially throwing it away.
3 credit cards and an installment loan is all you need to begin (re)buiilding. And credit limits mean nothing as far as FICO scoring; a $200 credit limit will have the same effect on your scores as a $20K limit provided utilization remains low and under control. Creditors will issue higher limits if your income, debt-to-income ratio (DTI), and overall credit profile supports it -- in other words, just because you have a few random $15K limits on your reports doesn't mean a bankcard issuer will match or exceed that amount.
And as stated by the previous poster, you should get your FICO scores if you have not already done so. Also - what negatives are currently on your reports? You stated you were in the process of disputing several items -- and inquiries (?) - is there fraudulent info on your reports? Why are you disputing inquiries?
EDIT: Just saw one of your replies. So you only have one negative on your reports? An unpaid charge-off? If you can take care of that charge-off (either have it removed or pay / settle it), then you may be able to obtain an unsecured card without going the secured route at all.
@myfavoritehue wrote:There are several credit forums/groups I am apart of and this practice has worked well for others. Reading this confuses me as to what the correct answer is.
I understand your reasoning behind a bank not offering a specific limit of credit strictly based off the limit on my report. That makes sense. What I don't understand is, if these tools are available, why shouldn't I be using them?
I have seen multiple people use the tradelines I listed above as a way to increase their utilization, which in turn improved their scores, somewhat significantly, then receive better interest rates or higher limits of credit, from banks, not long after those tradelines posted.
All of my scores are in the 520-530 range. This is before my car loan will post, which is through Chase.
I am currently disputing the charge off and the collection now. Neither creditor has been able to provide evidence that the account is mine which deems it removable by law.
Because quality over quantity. Can these types of tradelines help you (scorewise) initially? Yes. Do you need them to help you? No.
A random $15K credit line can certainly help with utilization -- if you already have high revolving uiltlization. But you don't have any utilization other than the outstanding balance on that charge-off (which you can eliminate by either paying it or having it removed if it's fraudulant). So you do not need a useless $15K tradline to help with utilization. A $200 secured card will have the same exact effect on your FICO scores as a $15K Jeweler's club card. You just need to have a revolving account reporting.
Put it like this --- if you were a lender manually reviewing an applicant's credit report would you be more comfortable extending credit to the person with a bunch of random online-store-only cards that LITERALLY ANYBODY CAN GET REGARDLESS OF CREDIT HISTORY with high, unearned credit limits, OR the person with a couple of reputable bank cards that are used for everyday expenses in the real world with lower limits that have the potential to grow over time with responsible use...? (Hint: it should be the latter...).
You can, obviously, do whatever you want... I'm just giving you my opinion since you asked for advice. Credit is long-term, not short-term, so you should be looking at long-term solutions as opposed to quick-trick fixes. You don't need those tradelines.