Had a bad start - How to build credit now

[Anonymous]

Hello all! New to these boards and they're great.

I'm looking for advice on what the best thing to do is at this point. I managed to damage my credit back in college with a charged off credit card and a defaulted student loan. Now I'm working on paying back the loan but have 4 collections accounts on my CR that say they were charged off with a claim filed with the government. Last year my credit scores were in the mid-500's. I had an Orchard Bank secured for 1 year which I closed to escape annual fees and now have Chase with CL $300, Cap 1 with CL $500, and Direct Merchants with CL $800. My EQ FICO is 625, and my FAKO's are EQ: 603, EX: 644, and TU: 651. I keep utilization below 50% and generally pay in full. I have 9 EX, 7 EQ, 6 TU inquiries. What should I do now if I want to build my credit and get those CL's up?

Message Edited by ChaoticKinesis on 08-31-2007 10:37 PM

[fused]

I'm a little confused when you say you keep your CC util below 50% and generally PIF. Do you have CC (credit card) balances reporting on your CRs (credit reports)? Have you read the credit scoring 101 thread? Great stuff! Come back with your questions, we are here to help.

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

[Anonymous]

I just finished reading that thread and there is definitely some good info in there. To answer your question: yes the CCC's are reporting amounts, I'm still figuring out what the amounts are. I should amend what I said about PIF: I pay the full statement balance for previous month but not the total credit balance.

I understand 10% is ideal but that's a bit hard to maintain with such low limits. Also, I'm more interested in longer term improvements than what my score is this month, so I think staying below 10% is not that important here (please correct me if I'm wrong on this).

The main thing I'd like to know is whether I should apply for more credit now—and if so which?—or do I wait it out?

Message Edited by ChaoticKinesis on 08-31-2007 11:24 PM

[Anonymous]

I definitely understand the utilization factor with such low limits.  The cards you have a rebuilders and the best way to go about getting the best bang for your buck on those would be to alternate usage. use one card one month and pay in full.  Rotating them over the numbr of cards you have.  Tht would allow them all to mostly report a 0 balance keeping your utilization down acorss the board.

You said you PIF every month, you could also pay the day before the statement fell to prevent the cards from reporting the high amounts to the credit bureaus.  Or use cash (my favorite) and only use the cards for small purchases or things you would use them for anyway and PIF before statement dte.

When I was still using the low limit cards, I had things like the cable bill, and phone bill billed directly to my card and PIF before statement date.  Just make sure you have the funds in the bank to do so.  I planned a budget in Money (cause I like to shop). Jsut to be sure Iwouldnt be pulling savings come card payment time.

Message Edited by Brammy on 09-01-2007 07:56 AM