Garden Club Meeting - August 2012

[Isanham]

Hey gang.  This is my first post here, but been lurking since May.  Thanks for all the great tips and suggestions that I've stolen from you guys since then...

I've barely started to rebuild my credit after complete wipeout over many years worth of bad medical debt and a bad mortgage situation:

• BK13 in 4/07 (discharged 5/12) and a foreclosure (1/12).

After my 5 year credit moratorium from BK13 ended, I went and got some re-builder cards in this order:

• BofA Secured ($800CL)
• Cap 1 Unsecured ($300)
• Credit One Unsecured ($300) - Regret this one already
• Cap 1 Unsecured ($500)

I got all crazy and actually used the cards, under the mistaken impression that PIF meant zero reporting balance.  Instead I show 3 maxed out cards and my last Cap1 isn't reporting yet, and that's the only one not near full UTIL at statement date...  Next reporting cycle will be a completely different picture.  Good thing with micro CL's is they're really easy to pay down (in fact I already had!)

TU FICO shows 608 and EQ at 615, the score power thingie on here tells me if I pay my reported balances down to under $100 my score will jump to 665-712!!!???!!!!  This doesn't seem possible to me, but I'll take whatever boost comes of it.  I do have good AAoA due to a really old student loan and some positive TL's on closed accounts still reporting from the early 2000's.

Basically, all I want is another shot at a mortgage in July 2014.  5 years of BK13 moratorium taught me how to live without credit app's - same as gardening, right?  So, gardening I go!  Last app was 8/10 for the Cap1 $500.  Unless there's a strategic reason that will increase my score to app for something, in the garden I will stay til mortgage time.

Thanks Again!

[LS2982]

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@Isanham wrote:

Hey gang.  This is my first post here, but been lurking since May.  Thanks for all the great tips and suggestions that I've stolen from you guys since then...

I've barely started to rebuild my credit after complete wipeout over many years worth of bad medical debt and a bad mortgage situation:

• BK13 in 4/07 (discharged 5/12) and a foreclosure (1/12).

After my 5 year credit moratorium from BK13 ended, I went and got some re-builder cards in this order:

• BofA Secured ($800CL)
• Cap 1 Unsecured ($300)
• Credit One Unsecured ($300) - Regret this one already
• Cap 1 Unsecured ($500)

I got all crazy and actually used the cards, under the mistaken impression that PIF meant zero reporting balance.  Instead I show 3 maxed out cards and my last Cap1 isn't reporting yet, and that's the only one not near full UTIL at statement date...  Next reporting cycle will be a completely different picture.  Good thing with micro CL's is they're really easy to pay down (in fact I already had!)

TU FICO shows 608 and EQ at 615, the score power thingie on here tells me if I pay my reported balances down to under $100 my score will jump to 665-712!!!???!!!!  This doesn't seem possible to me, but I'll take whatever boost comes of it.  I do have good AAoA due to a really old student loan and some positive TL's on closed accounts still reporting from the early 2000's.

Basically, all I want is another shot at a mortgage in July 2014.  5 years of BK13 moratorium taught me how to live without credit app's - same as gardening, right?  So, gardening I go!  Last app was 8/10 for the Cap1 $500.  Unless there's a strategic reason that will increase my score to app for something, in the garden I will stay til mortgage time.

Thanks Again!

---

Axe the CreditOne card, and up the deposit on the BoA secured, that will help you gain higher CL's down the road.

[Brusilov]

4 months app free!!!  8 more to go then pulling the trigger on PenFed.

[Revelate]

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@LS2982 wrote:

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@Isanham wrote:

Basically, all I want is another shot at a mortgage in July 2014.  5 years of BK13 moratorium taught me how to live without credit app's - same as gardening, right?  So, gardening I go!  Last app was 8/10 for the Cap1 $500.  Unless there's a strategic reason that will increase my score to app for something, in the garden I will stay til mortgage time.

Thanks Again!

---

Axe the CreditOne card, and up the deposit on the BoA secured, that will help you gain higher CL's down the road.

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Welcome to the forums Isanham!

I'd dump the CreditOne as well if it's older than six months.   As for the BOFA secured, it really depends when you're looking to get the mortgage.  If it's within six months, just chill, and that may apply in your case within 12 months actually.  CL's are nice for later, but it's not a strategic financial decision unlike a mortgage: credit cards are completely secondary to mortgage loans.

If you're looking a ways down the road to a mortgage, then the BOFA deposit is a good strategic credit move, just make it a large one as it does count as a credit inquiry in your file.  BOFA secureds reliably graduate in a year from opening anyway, so you'll get the money back pre-downpayment... and I think you can count it for your reserve anyway on a mortgage application.  

Beyond that, additional gardening is nothing but goodness for you: you want those pretty green OK's (admittedly on some reports they're black and white) marching across your report on those credit cards you have.  That's the path towards long-term FICO growth, in the short term take a look around the forums for "revolving utilization" and take a look at how to make your tradelines look as best as possible from a credit score perspective.  Well worth knowing before heading into the mortgage process.

[tinuviel]

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@Isanham wrote:

Hey gang.  This is my first post here, but been lurking since May.  Thanks for all the great tips and suggestions that I've stolen from you guys since then...

I've barely started to rebuild my credit after complete wipeout over many years worth of bad medical debt and a bad mortgage situation:

• BK13 in 4/07 (discharged 5/12) and a foreclosure (1/12).

After my 5 year credit moratorium from BK13 ended, I went and got some re-builder cards in this order:

• BofA Secured ($800CL)
• Cap 1 Unsecured ($300)
• Credit One Unsecured ($300) - Regret this one already
• Cap 1 Unsecured ($500)

I got all crazy and actually used the cards, under the mistaken impression that PIF meant zero reporting balance.  Instead I show 3 maxed out cards and my last Cap1 isn't reporting yet, and that's the only one not near full UTIL at statement date...  Next reporting cycle will be a completely different picture.  Good thing with micro CL's is they're really easy to pay down (in fact I already had!)

TU FICO shows 608 and EQ at 615, the score power thingie on here tells me if I pay my reported balances down to under $100 my score will jump to 665-712!!!???!!!!  This doesn't seem possible to me, but I'll take whatever boost comes of it.  I do have good AAoA due to a really old student loan and some positive TL's on closed accounts still reporting from the early 2000's.

Basically, all I want is another shot at a mortgage in July 2014.  5 years of BK13 moratorium taught me how to live without credit app's - same as gardening, right?  So, gardening I go!  Last app was 8/10 for the Cap1 $500.  Unless there's a strategic reason that will increase my score to app for something, in the garden I will stay til mortgage time.

Thanks Again!

---

Hi, and welcome to both the forums and the Garden Club!

Utilization plays a major role in your scores, so if you're cards are reporting as maxed out, then you are taking a major hit. You should expect to see a huge improvement in your scores if you pay things down. The ideal situation is to pay off the cards and have all but one report a zero balance; allow one card to report a balance that's less than 10% of your CL. This is a good thing to know if you're trying to tweak your scores right before apping for a mortgage, so that you can get the highest possible score component related to utilization.

[Roarmeister]

Coming up to a month in the garden. I've got the rake and garden hose hose out!  And plan to be there for the next year.

I started looking around at new vehicles last month.  I don't plan on actually buying anything for another year due to a couple of reasons but looking never hurt anyone.  1st, my vehicle is still in good condition and was paid off in February.  I made some bigger purchases earlier this summer that raised my CC balance above where I prefer it to be so I figure it will take about 8 months to pay it down to zero.  Next because hard pulls for credit cards are counted as a negative for the first year and on the records for 2, I thought it would be best to apply for the credit cards now, wait for the year to lapse and then look at buying a new vehicle.  Besides the extra headroom for utilization would be good for me. 

I had always intended to get one or two more cards - this time a cash rewards card and preferably a VISA to go with my M/C and Amex.  So the timing made sense to apply for them now instead of sometime in the future.  I couldn't decide between 2 top cards so both - a MBNA SmartCash Platinum+  and a ScotiaBank Visa Momentum. The logic being that I wanted a total of 5 CCs with no more than 2 reporting utilization at any one time.  Both were approved and I added $20k and $10k CLs to my stable for a total of $71k.  My plan for the reward cards is to charge my utilities and other regular expenses to them to collect the cash rewards, PIF before the statement date, and make the cards work for me.

Earlier this year I had transferred my debt from 2 high interest cards onto my low interest card (5.99%) so that I would minimize my interest payable.  I then went on vacation and racked up a few more charges to this card.  Unfortunately because of doing this I sent the utilization on that one card fairly high to 40% and 0% on the other cards.  My overall utilization went to almost 11%.  Opps - I realized a few days ago when I got my quarterly credit score (FAKKO) that it dropped largely because of that fact (-22 pts).  It also dropped slightly because the the hard pulls for the new credit cards and because I lowered my AAoA.  The addition of the CL headroom didn't seem enough to counter these negatives.

So my score dropped, big deal.  I won't be making any credit apps for a while (new auto sometime next year, mortgage renewal May 2014) so right now the score is for educational purposes and tracking.   But when I will need the credit apps in the future - I know my negatives from the hard pulls will be gone, the AAoA will be more mature and I will have paid off my CC debt in total.  My score goal is still to get all three scores above 800 by year end but that will be dependent on how quickly I can pay off my balance.  I am projecting a 5% utilization by Christmas and 0% by April.  On the other hand I may just ask for more CLIs and lower the percentage a bit more.

Slowly but surely I am getting smarter about how I use and manage credit.  That's my story and I am sticking to it. 

[tinuviel]

I'm starting to feel a real longing to come back! It's been fun out here, and I've brought back some wonderful new seedlings, but I really feel and urge to settle back in.

I'll make it official soon.

[luvsandyshores]

Congrats Tinu on reaching your goal!

[Anonymous]

Is there room in here for me?  Even though Winter will be here before we know it, I think I can work on making my new seedlings grow! 

11 months ago, when I got my current car loan, my Experian score was 520. As of a few weeks ago that was close to 650 and my Equifax was at 693 this past week. I put in a few apps to refi the car but got shot down on all of them. The letters listed the reasons as being because of my BK that was discharged in Feb of '10 and some tax liens. One also noted a lack of time with credit after my discharge.  After putting in those apps and getting the feeling that I wasn't going to get anywhere, I tried for a few credit cards. That worked much better!  I had a total CL of $1800.00 between 3 cards. Now it's up to $7900.00. I started with Merrick Bank. I had a pre-qualified app from them for a $1000.00 CL. Took care of that. Then I went for Barclay's. They denied me earlier this year. I was surprized to see an approval for $1300.00.  Yay me!  Then I jumped on the Walmart site and was given a $600.00 CL. Felt good considering I've read about a lot of people getting $200. Then I called Orchard Bank. My CL with them was $750.00. They upped it to $950. (wahoo...).  I'd been kicking around Target. Read mixed reviews here with a lot of small CLs that never grow. I figured I'd do one more app so I stopped into my local store. They showed me $3000.00 worth of love. This was a HUGE surprize!!! 

I'm done applying and will watch everything grow for awhile. I usually have about $1400. rotating per month so my utilization was close to 80% depending on use and payments. That number has been coming down slowly. Even if it stays the same, utilization will now stay in the mid teens so my score should have the momentum to keep building speed and everything will grow on it's own. 

Plans for the next 6 months are to maybe close my Capital One Secured card. It has a $300.00 limit. $200.00 of that is mine. It's the lowest # of the group and I don't think it will harm anything if I close it down. I'll try refinancing again.  Hoping to be in the 700 club then.

One thing that I don't understand is last year, I got denied for most credit cards (Target, Barclay's and one other) but was able to get sub-prime auto loans. Again, score was in the low 500s. Now, it's in the mid to upper 600s, I get approved for "ok" cards, surprizing limits on a couple of them but get denied for the 3 auto loans that I applied for. My current one is at 17.1%.  I would have been happy with 8.99% for now.

[webhopper]

@posativelyliving

Try for the auto refi again in 6 months. Don't be discouraged. If you're way underwater it will be harder to refi. Try to make extra payments on the car if possible to bring your principle down. Also when you apply for refi; try to go with a shorter term such as 36 or 42 months. This will show lenders that you are ready and willing to get way above water on it as opposed to stopping payments. It helps push things in your favor as the lender analyzes the overall risk of the loan. Also; check with local credit unions. They can have more discretion than big banks as far as approving loans