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@newyorkplusphoenix34, I would not be too hasty to close your accounts if they are not costing you any fees.
Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.
I would see if you prequalify for a Discover It, or Capital One Platinum. Depending on your credit you may qualify for either. Otherwise, you should consider a secured credit card.
IHMO, Discover It Secured is one of the best-secured credit cards for no or limited credit, poor credit, and bad credit applicants — and one of the best gas credit cards you can get with bad credit. Disco offers 2% cash back at restaurants and gas stations (one up to $1,000 in combined purchases each quarter) and 1% cash back on other purchases. You’ll need an up-front security deposit of at least $200 to apply for the Discover It Secured Card.
Capital One Secured Mastercard requires a refundable security deposit of $49, $99 or $200 based on your creditworthiness. Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line. Get access to a higher credit line after making your first 5 monthly payments on time.
The Citi Diamond Secured Mastercard can help you establish, improve or rebuild your credit. Build your credit history by using your card responsibly. Best of all, there's no annual fee. Applicants must meet Citi Bank's credit qualification criteria for this card, which includes a review of your income and your debt. If approved, a minimum of $200 security deposit is required. The security deposit is always equal to your credit limit and will be held for an initial term of up to 18 months. You must not have any bankruptcy history within the last two years.
Bank of America's BankAmericard Secured Credit Card is designed to help establish, strengthen or rebuild credit for an annual fee of $39. A minimum refundable security deposit of $300 is required to open this account. Your maximum credit limit will be determined by the amount of the security deposit you provide, your income and your ability to pay the credit line established. If you provide a deposit that exceeds the calculated maximum amount based on your ability to pay, a will be returned to you for the difference. BoA periodically reviews your account and, based on your overall credit history (including your account with BoA and other credit cards and loans), you may qualify to have your security deposit returned. Not all cardholders will qualify.
An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into Self Lender or a Share Secured Loan at a Credit Union.
Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit.
Good info from Medic.
I would ask why they're decreasing your CL. Have you had high balances and only paid minimum pmts?
Have you allowed the Ulta card to use most of it's limit and not paid it down? Anything neg hit your report recently?
The best way to build those credit lines would be to charge something and then pay it off right away or at least most of the way.
Do you know your Fico scores?
Those cards are decent for rebuilding (in part) if used properly.
Again Medic's advice for a secured Disco or other will help a lot.
Welcome to the forums, NewYork,
If these are you only two revolving lines of credit then you don't want to close them without replacing them with at least 1 new card. Your scores will drop for having no revolving credit accounts because you won't be fulfilling that part of the 'credit mix' requirement. Once you get one or two new accounts reporting, you can go ahead and close the two store cards if you still wish to do so -- though a low credit limit doesn't negate the value of a solid payment history, so they may be worth keeping for a while; and as your credit improves, the limits will follow.
Do you know your FICO scores for all 3 bureaus? If not, you need to find out what they are. You can sign up for a $1 / 7-day trial at creditchecktotal.com to view all 3 scores and reports so you'll know where you stand and able to determine which cards you may be qualified to get. Just make sure you cancel the trial before the 7 days are up so you are not charged the monthly fee (or you can keep the service and get udpated scores each month).
Since your credit is limited, and you have the 3 collections, you will probably need to get a secured credit card to start - you can look into Capital One and / or Discover as both of their secured versions can graduate to an unsecured card after 7-15 months of responsible use. Also - you should look into trying to get the collections removed from your reports - you can search the rebuild forums for "collection account removal", or something along those lines, for advice on how to do so.
Awesome advice given here
. Op, if you can provide your current Fico 8 scores, inquiries, etc so we csn help guide you better. I agree dont close the cards if thats all you have . Just pay one off and let the other not report more than 9%. Welcome to the forum by the way
. Op, if you can provide your current Fico 8 scores, inquiries, etc so we csn help guide you better. I agree dont close the cards if thats all you have . Just pay one off and let the other not report more than 9%. Welcome to the forum by the way
@AverageJoesCredit wrote:
Awesome advice given here
I was thinking the same. The above posters really broke it down for you well. I also agree with all of them. Get the utilization down to under 9% on one card and pay the other one down completely. Then as mentioned already, I would look into seeing if you can do something about getting those collection accounts removed. The options given to you were good ones by Medic, concerning what possible cards to look into. After paying you balances down, I would look into this a little more.
OP do you have any late payments on these two accounts, Ulta or VS? Even though you are frustrated with the limit, you should not close them, until you establish better credit on other cards.
Since you paid off the Capital One cards, you might be able to apply for another. Getting a secured Capital One card would also be good.
The only real requirement in credit credit is to pay at least the minimum payment, by the due date of that payment. From the collections it seems you might want to focus on that. Only charge items you know you can pay, and then pay them soon.
The advice about managing utilization is good in an ideal sense, but due to the collection history, and the very low limit cards you will be getting for a while, your main focus needs to be paying on time, not managing utilization other than not going over limit on any card. After you build some good history of on time payments, you can add the factor of managing utilization.
