Rebuilding, need advice if I should apply for a card.

[Anonymous]

Hello,

This is my first post on the forums and I am looking for some advice. I am 27 years old, just married a few months ago and beginning to look in to home shopping. About a year ago I began paying for services for Lexington Law firm to help clean up my credit, for the first 5-6 months they did a great job, now its slowed down and I also just subscribed to CreditRepair.com to assist with cleaning things up. I know everything they do I can achieve on my own but I have a pretty packed schedule so that is why I went this route.

Anyway, here is my finanical picture:

Household salary: $130,500/year

Student Loans: $18,000 left

Capital One Secured Card: $70 balance / $1000 limit

Capital One Quicksilver Card: $3,570 balance / $7,000 limit

Ford Credit: $23,500 balance/ $553 monthly payment.

Cpaital One Auto Finance: Was $3000 balance but I just paid in full 3 weeks ago

Monthly Rent: $1200

My DTI: 15%

Joint DTI: 22%

Now, when I got my car in December 2014 the dealerships ran my credit (2 different dealerships) and generated a lot of hard inquires on my account. Experian is showing 6 hard inquires, Trans Union shows like 15 and Equifax shows 13. I am hoping that the CreditRepair.com service can help with this, because it is to my understanding that if reports are pulled for the same things at one time it can be consolodated in to 1 hard inquiry instead of multiples. I have a total of 9 old accounts from 5+ years ago that were in collections / charge offs. Some were due to a bad joint applicant, and caused a trickle effect trying to catch up making me fall back on other open accounts. 

My current Fico scores:

Experian: 634 (According to myFICO) but according to my Experian report I pulled today it says my score is 643.

Transunion: 655 (According to myFICO) | 694 (According to Transunion Report)

Equifax: 644 (According to myFICO) | 645 (According to Equifax report)

Now finally my question, should I avoid applying for the Discover IT card? I don't want to further hurt my chances at applying for a mortgage (which could be anytime between September - March... I plan to apply through Capital One and the rep I spoke with said they require a minimum 620 Fico score) but I am wondering if I do not have enough cards on my report to help with mortgage process and the 1 benefit to the Discover IT card is 0% APR on balance transfer so I would like to move my Capital One Quicksilver balance to the Discover Card to pay off.

Any advice you guys can provide I would grealty appreciate, I have learned a lot just by reading the site and browsing the forums.

Thank you very much!

[Anonymous]

I am hoping that the CreditRepair.com service can help with this, because it is to my understanding that if reports are pulled for the same things at one time it can be consolodated in to 1 hard inquiry instead of multiples.

It appears that you have a misunderstanding on this issue. The Fico scoring model discounts multiple inquiries of this type when calculating the score by weighting them as 1. However, there is no proviso for "consolidating" them. They will still appear.

As for the Discover It, I think your odds at this point are slim. 

[Anonymous]

Of the 9 baddies that are 5+ years ago how many have fallen off and when would the next ones fall off?

Because those collections would is what's hindering your score and also probably will be the reason listed if denied.

I've heard conflicting sides, where some say that discover is easy to get, some say hard and apparently there's a secured version of IT.

The inquiries you have, if done within a two week span, will be consolidated to one when fico factors it in for the score--but it will still show all the different lenders that have pulled your file.

I would be more concerned about the baddies and the balance being over 50% for one of the cards and last would be the inquires.

[Anonymous]

@Greenapple13,

My Equifax report has 11 Potential Negatives:

1. Student Loan: Was late 120 days (5), 90 days (2). Last negative activity on this account 2010. This was one account where I was paying my co-signer who was "managing" the loan until I began getting calls about it not getting paid etc.

2. Collection Agency for a BofA credit card - First deliquency 2009, resolved in 2012. Item 3 would be the original BofA account. This ended up being in a bad spot because at the time I began playing major catch up on my student loan as well as another account that my joint applicant was just pocketing my payments, so I fell so far back I was devoting a lot of my paychecks which back then was very small to try and catch up.

4. Capital One Credit Card - Same as items 2&3, because I was putting so much money in to an auto loan and student loan becuase of the person essentially stealing my money I had nothing to manage my other accounts. This was a 30, 90 & 120 late payments. Last negative was 2010. I now just paid off an auto-loan with Capital One, and have 2 open credit cards and a savings account. I also plan to use them for a mortgage.

5. Ford Credit seems to appear 2 times under my Equifax negative accounts, for the same loan on my old car.

6. HSBC Bank Credit Card - Same reasoning as the items 2-4.. all of my funds were going to get me caught up on a car loan and student loan I thought was being taken care of. This was 10/2010. Item#7 This account was sold to a collection agency and I did a charge off (wish I didn't now.)

8. Another collection agency for a store card: closed in 2012, did not pay in full, marked as charge off.

9. Student Loan #2 - Bad marking for payments last negative was 2011.

10. TD Auto Finance - Joint applicant wasn't paying it, last reported negative mark was 2009.

A lot of it basically was a domino effect of having to majorly catch up on 3 or4 loans that were co-signed and later found out the party "managing" the loans wasn't using the money I was giving them to pay for them. Hard lesson learned but it essentially stretched me so thin I fell behind in other accounts because at the time I wasn't making as much and couldn't pay for it all.

So I guess with this info, I should withold from applying for another card. Do you guys think this would deny me of a mortgage? I very green to that process, my current financial picture (salary & expenses) are fine, my Fico score meets Capital One's requirements but I don't know if its more than just the score # and they see those negative itmes and run away. I can only explain them with what I had said before about falling behind due to my joint applicant not manaing the loans when they told me they were.

Thank you both for your replies. I am just seeking some guidance so I can make the right moves.

[Anonymous]

If I were in your shoes, I wouldn't apply for anything right now and work on the negatives.  In case you have been there yet, there is a rebuilding sub-section on here that has a ton of info.  The knowledge can help you not use a credit repair company saving yourself money.

[Anonymous]

Just so you know regarding the inquiries.  When you apply for an auto loan or mortgage and have inquiries within a short period of time they are scored by MyFico as one inquiry but each and every inquiry still shows up in your report and no credit repair agency can 'consolidate' them into one inquiry.  Take Yes-It's-Me suggestion and visit our rebuilding forums and save your money.  Everything that a credit repair agency can to do to help you, you can do yourself 

[Anonymous]

Mortgages are like Auto loans..because there is a collateral, it actually is not as difficult as getting a credit card unsecured with a revolving line.

the only difference is that when you are approved, at what rate and for how much.

the better credit you have, the more assets you hold--the larger the loan can be, and the lower the interest and absence of points..

congratulations on your marriage btw, how does your partner's credit look?  i only ask because you may still get approved for a mortgage, but if it is not at an ideal amount/rate it may be better if, depending on your partner's credit file, that they apply themselves separate from you (you can still be on the deed not just the loan)

[Anonymous]

Thanks guys for all of the feedback. I am going to hold off on applying for the credit card. I just saw the special for the 0% interest on balance transfers for 12 months and I thouhgt I could save a little money on paying it off. Only reason I thought it could work is because my Credit Karma profile shows "Very Good Odds" of approval and the user reviews on the card seemed to have some people with similar scores to myself.

I will definitley take a look over at the forum for some advice. I planned to give CreditRepair.com like 60 days to see what they can do.

Thank you for the well wishes. I believe her credit score is in the high 700's to low 800's. The only downside to having her apply solo for the morgage is her income is not high enough to get us to qualify for the loan amount we would be looking for ($250-$300k).