First Time Credit Card Application

[Anonymous]

Alright, where to start. I'm entirely new with this, i've been poking around reading the site and trying to gleem what i could from online resources but i've decided to just register here and ask for some guidance.

General Data:

I'm 24 years old.

Never had a credit card.

Low income (i typically wait tables).

Student.

I did what seemed most sensible and attempted to look up my credit report with annualcreditreport.com ---- Experian guided me to a page saying I have 0 negatives and 0 positives on my record, but it seemed impossible to get any actual number from them without paying... After submitting my request with equifax they said my information did not match my file and refused to disclose it online. Trans-union said essentially the same thing, although they offered to validate via phone by calling, guess what, my OLD home's telephone number that no longer even has service. SO that left me bashing my head against the wall.

This information would have been quit pertinent as i have a few possible blemishes from my past that i have no idea how they have affected me or if they have at all.

These Potential Blemishes Are:

---A title Loan in 2009 that was paid in full within two months.

---A 100-150 late free from blockbuster from 2005 (my friend borrowed my card and never returned anything, blockbuster passed it to collections, i was young at the time and didn't even really care or understand the potential impact on my future)

---An overdrafted account with Colonial Bank (Now BB&T) passed on to collections (i originally overdrafted 6 dollars and by the time i realized it i had accrued 760 dollars in late fees, overdraft fees, penalties, etc. This was passed on to a collections agency.)

I am about to sell my car (2003 Buick) and pay off all my debts, i imagine this would be the first step, aside from arguing my case in each instance.

Alright, now i am attempting to get my first credit card and start building credit from what i think is "limited or none". I could be wrong, but i don't think i have "bad" credit.

So far my best plan is to pay off debts, get a Visa student card and spend 10% each month and pay in full. I have grown up quite a bit in the last few years and am actually quite on top of things and very conservative with my spending and general finances.

Any advice on this complicated situation is MUCH appreciated.

Thanks in advance.

[Anonymous]

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@Anonymous wrote:

Alright, where to start. I'm entirely new with this, i've been poking around reading the site and trying to gleem what i could from online resources but i've decided to just register here and ask for some guidance.

General Data:

I'm 24 years old.

Never had a credit card.

Low income (i typically wait tables).

Student.

I did what seemed most sensible and attempted to look up my credit report with annualcreditreport.com ---- Experian guided me to a page saying I have 0 negatives and 0 positives on my record, but it seemed impossible to get any actual number from them without paying... After submitting my request with equifax they said my information did not match my file and refused to disclose it online. Trans-union said essentially the same thing, although they offered to validate via phone by calling, guess what, my OLD home's telephone number that no longer even has service. SO that left me bashing my head against the wall.

This information would have been quit pertinent as i have a few possible blemishes from my past that i have no idea how they have affected me or if they have at all.

These Potential Blemishes Are:

---A title Loan in 2009 that was paid in full within two months.

---A 100-150 late free from blockbuster from 2005 (my friend borrowed my card and never returned anything, blockbuster passed it to collections, i was young at the time and didn't even really care or understand the potential impact on my future)

---An overdrafted account with Colonial Bank (Now BB&T) passed on to collections (i originally overdrafted 6 dollars and by the time i realized it i had accrued 760 dollars in late fees, overdraft fees, penalties, etc. This was passed on to a collections agency.)

I am about to sell my car (2003 Buick) and pay off all my debts, i imagine this would be the first step, aside from arguing my case in each instance.

Alright, now i am attempting to get my first credit card and start building credit from what i think is "limited or none". I could be wrong, but i don't think i have "bad" credit.

So far my best plan is to pay off debts, get a Visa student card and spend 10% each month and pay in full. I have grown up quite a bit in the last few years and am actually quite on top of things and very conservative with my spending and general finances.

Any advice on this complicated situation is MUCH appreciated.

Thanks in advance.

---

Welcome!

You said you are a student- do you have any student loans? If so, have you ever made payments on them? This will start the AAoA and credit score clock ticking.

If you have not paid anything on credit for at least 6 months, you are a blank file to FICO scoring & possibly the CRAs. Neither good nor bad, just unknown.

The title loan may be a minor ding, the collections will be worse, but drop off 7.5 years from DoFD.

Selling your car may not help anything. If your collections are nearing 7.5 years old, you may wait and just let them drop off rather than restarting the clock. Search PFD and DV letters for more info to help you decide.

First step is to get a credit report from the 3 bureaus using your current info- Physically call each bureau and ask them to get a CR pulled for you.

[Anonymous]

Thanks alot warthog,

That is a good point about the drop off time, i think blockbuster will be gone in the next year or two, if it ever showed up at all, not to mention that company is going out of business altogether (whatever impact that may have). Whereas my banking/overdraft fiasco is only 2 years old. BUT i intend to get in contact with them tomorrow and contest every single charge. Either way, i'll have to deal with the bank if i ever want another account anywhere, correct?

And no, i've never had a student loan (applying right now). Not sure what credit Bureau hours are, but i suppose i'll call them this evening or tomorrow morning.

Judging from your response/evaluation of this situation, i guess its as i thought when looking up credit cards, i fall into the "no, or limited credit".

What's my best bet are far as building from here?

I am looking at this ( http://usa.visa.com/cardadvisor/CardAdvisorSearch?QP4=1&QP2=Cash&x=40&y=11&categoryId=1 )credit card to get started (about to apply, assuming this is a good decision). I intend to spend 10% of my limit and pay off in full every month. That is the best bet correct? Would this work better with two credit cards? (no more of course)That is how i would show "revolving utilization, right?

[blacklotus]

ArthurC:

I think your Fico scores will be alot higher than what you think.  You seem like you have stayed away from using credit and are not in debt which in my mind is great. Definitely get your scores first before you app for that card or whatever card you want.  

Be very careful with student loans don't take any out unless you really need them because they can trap you into debt- I am speaking from experience- carrying a student loan burden is the worst feeling in the world.  If you can get by without them I would recommend you do so and if you really need one take out just exactly what you need.  I have since paid mine off but I had defaulted on them at one point and that really sends your scores into subprime levels where it is pretty much impossible to get credit.

I wouldn't sell the car until you can get a better one.  IMHO. 

[Anonymous]

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@Anonymous wrote:

Thanks alot warthog,

That is a good point about the drop off time, i think blockbuster will be gone in the next year or two, if it ever showed up at all, not to mention that company is going out of business altogether (whatever impact that may have). Whereas my banking/overdraft fiasco is only 2 years old. BUT i intend to get in contact with them tomorrow and contest every single charge. Either way, i'll have to deal with the bank if i ever want another account anywhere, correct?

And no, i've never had a student loan (applying right now). Not sure what credit Bureau hours are, but i suppose i'll call them this evening or tomorrow morning.

Judging from your response/evaluation of this situation, i guess its as i thought when looking up credit cards, i fall into the "no, or limited credit".

What's my best bet are far as building from here?

I am looking at this ( http://usa.visa.com/cardadvisor/CardAdvisorSearch?QP4=1&QP2=Cash&x=40&y=11&categoryId=1 )credit card to get started (about to apply, assuming this is a good decision). I intend to spend 10% of my limit and pay off in full every month. That is the best bet correct? Would this work better with two credit cards? (no more of course)That is how i would show "revolving utilization, right?

---

Before calling anybody, pull the reports from the CRAs using current info- what you would put on a credit app. If its doesn't show a collection, don't worry about it immediately. As for dealing with the bank, not necessarily. check out http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/What-Steps-Do-I-Take-Do-I-DV-PFD/td-p/337142 and go from there.

If you are eligible for Federal stafford loans, get one ASAP. As soon as it disburses, make 1 payment to start showing the acct on your report, wait 6 months before apping.

Best bet for building is to GW/PFD/DV any collections, get a student loan, pay it, wait 6 months, then app for CC. Once you get a CC or 3, keep util <9% of CL on 1 card when statement cuts, then PIF before due date.

At this point, I would wait to dispute any charges. Especially for the bank, since it was initially a low amount a GW and possible PFD may do wonders while disputing may just tick them off. see http://ficoforums.myfico.com/t5/General-Credit-Topics/Goodwill-Primer/m-p/9424

[Anonymous]

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@blacklotus wrote:

ArthurC:

I think your Fico scores will be alot higher than what you think.  You seem like you have stayed away from using credit and are not in debt which in my mind is great. Definitely get your scores first before you app for that card or whatever card you want.  

Be very careful with student loans don't take any out unless you really need them because they can trap you into debt- I am speaking from experience- carrying a student loan burden is the worst feeling in the world.  If you can get by without them I would recommend you do so and if you really need one take out just exactly what you need.  I have since paid mine off but I had defaulted on them at one point and that really sends your scores into subprime levels where it is pretty much impossible to get credit.

I wouldn't sell the car until you can get a better one.  IMHO. 

---

This is kind of a lopsided view. You should take out whatever student loans you need to get through school and have a purpose for. Fed money is cheap, and it will let you get through school much easier. Even private loans have a place if you know what you will use them for- one friend in college took out an extra 4k in loans just to have a private room so he could study & sleep as needed. For him it was worth it, and he made it back later. Just understand that taking out loans for a 52" plasma TV is probably not wise and you will do OK. Also, defaults are punished extra harshly because the payment/deferment programs are pretty generous & you're ruining it for the millions of kids who came after you.