NEWBIE QUESTION RE: CCs PLEASE HELP!

[Anonymous]

I will definitely take that under consideration.  I will visit the rebuilding forum for sure when I get a break from work.  Meanwhile, from what I have read, CRAs use several different scorecards to assess a credit score.  So, for myself personally, I have never owned a CC.  I have zero student debt, it is all paid off on time.   What's killing my credit is a bad auto loan and a tax lien of my ex-husbands that should be gone soon.  The rest is all medical- literally less than $1500.00.  And of those, 7 of the 9 are falling off in the next 12 - 16 months. 

I'm concerned that once I am on a better scorecard, I will lose MORE points per inquiry than I will on this scorecard. 

Meanwhile, I was approved for a CapOne (just got notice).  )))) this is my first ever CC.  I am very excited.  The limit is low ($500), so I am wondering what in my life costs $50 or less on a monthly basis (7-11 trip, maybe, lol) but I'm really excited at seeing this show up on the CRAs, and seeing what impact it has on my score (if any). 

Wish me luck! I'm off to work again!

[TiggerDat]

My advice, first read the handy little booklet offered on the sign in screen!

Get Credit Karma and monitor your progress.

Open no more than four revolving accounts. 

Don't open any more after that before you get the mortgage.

Don't pay anything off which is outside the Statute of Limitations.  (Sorry, I know some will find this wrong of me to say, but if it gets paid it could stay on longer!)

Pay the tax lien or get your name off of it if it really is not your responsibility in any way.  Pay it off as soon as possible.  Even if you have the money, pay it with that CapOne card, then pay the CapOne card.  If it isn't counted as a cash advance, then it should earn rewards.  If it is counted as a cash advance, then don't use the card for it!

Only buy what you need and be thrifty about it.  Don't buy Del Monte, when the Kroger brand will do just fine.  Buy quality as long as you really need something durable, it should last longer and not need to be replaced as often.  Find the lowest price you can on everything.

Find excuses not to party, or party at home for cheaper.  Don't drive drunk, etc.  (This is related to being thrifty!)  Tell you friends that you have to work late.  Have plans with a coworker they don't know.  If you do go out, tell them you have to go to another friends birthday party which also happens to be that night.  Tell them you have to pick up a friend at the airport.  Tell them you will be at your parents house helping them repaint the living room. 

Charge only what you need, but charge everything if you can get rewards for doing it.  Use the best rewards card you have.  Pay the balance in full every month.

Pay a little extra on the car loan each month, unless it will make it so you can't pay the amount due in the next two months.  (Paying it down reduces interest you will pay overall and help qualify you for more or even for a mortgage.  Debt to income!)

Build up an emergency fund and have an emergency credit card.

Use all cards at least once every four to six months so they won't get closed.

If you get a secured card, get one with no/low annual fee which will graduate after a year or two.  (Unless you have no choice but to get one which won't.)  Once they become unsecure try and get credit limit increases on all your cards.  Shoot for at least $2000 on at least one card.  (Higher limits show responsible behavior.  It shows that the bank trusts you and according the the FICO booklet it can boost your score.  It is mentioned sometimes in denials for credit cards, so it must be a factor!)

Make sure that your utilization rate is less than 10% each month starting at 3 months before the mortgage. 

Resolve yourself to the fact that you might not be able to make it two years, but you sure are going to try!  And consider a fixer upper!  This will help you out in the long run when you go to resell it!

It took me a while to rebuild my credit.  I have a 715 score.  But, I also have many new accounts!  My average age of accounts is fairly low.  I however am on a much longer plan.  I don't need a mortgage for at least two more years.  I need a car loan before that I think!  I have been thrifty and have save a fair amount of money.  I have the money for a down payment or even for a fixer upper in an OK neighborhood.  (Or at least two houses in Detroit, but up to 10 which need work.)  There are some really nice houses in Youngstown Ohio, I don't live there, or anywhere near there, but to buy a house there and find a job, even if it is a commute, would be fine by me.  I wanted the best rewards cards, so I could continue being thrifty, but be rewarded better for being thrifty.  So I adopted some practices that meant I would get everything that I want and more.  I have great clothes, a new computer, most of the better rewards cards, and a fair amount of savings doing so.  Yeah, I will need a mortgage one day, but to get there I have other plans first to insure that I get the house I really, really want one day.  It took me a long time to get to where I am right now and I still have more work to do, but I have achieved more than I thought I could in some ways. 

Good luck.

[elim]

State Department Federal Credit Union (open to everyone)

Deposit $250 and take out a share secured loan, They will hand you $250 back. Use that $250 for their Secured Card. (2 for 1 with no Credit Check or Annual Fee)

Along with your cap1 CC, these will report positive while you do the hard work in cleaning your reports in rebuilding.

[Anonymous]

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@Anonymous wrote:

Hi Everyone, I'm new to this forum and new to getting control of my score.  I have low, low scores (467 EQ, 495 TU, 526 EX).  My overall debt is not too bad, actually, but there are a few accts in collections (about 2/3 of which are aging out 2015/2016) and I havea state tax lien due to my ex not filing his taxes (trying to resolve this with the state) and a bad auto loan.  Both of these make up 7/8 of my bad debt. 

I have a CC showing up thru FPB, which I am honestly not sure I ever signed up for so I'm disputing it (it's a $395 debt, but it's killing me with a 195% CU ratio). The rest  of my total debt (excepting the tax lien and bad auto loan) total less than $500 (medical).That's the total sum of my debt. 

However, all the score sims are saying that getting a revolving acct is the way to go for a pretty good jump in pts.  My question is .... if I get a revolving acct (looking at CapOne secured), my score is simulated to jump about 25 pts.  Is there going to be a long term difference if I get, say, ten of these cards?  I realize amassing a lot of new credit will hurt my score initially, but really.... I mean, it's not like it can get much worse LOL.  I'm looking for the long term benefits of having a bunch of cards with a 10% or less CU over, say, 12-18 months.  If one card can bump me 25 pts, will 5 cards bump me 125? Or is it not that simple?  Thanks so much in advance for helping!

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Yes, I would get the Cap1 secured cc. I did that when I didn't have credit history 3 years ago. It's only $49 deposit to geta $200 CL. I had mine around 9 months before I applied for unsecured cc, which is my discover. Just used the secured card heavily and pay it off full and then you can leave some balance and pay it full again. That's what I did on mine. If you want a higher credit limit than $200 I believe they'll let you do that by depositing more money. I close that card once I got my Discover card which I think was a mistake at the time because it means my credit history went back to zero but I at least got an unsercured card.

[takeshi74]

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@Anonymous wrote:

However, all the score sims are saying that getting a revolving acct is the way to go for a pretty good jump in pts.

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If you have derogs then you need to address them.  Hit the Rebuilding subforum and see what you can do about them.  Derogs will tend to hold you back no matter what else you do.  Definitely consider utilization, mix of credit and all the other factors but don't assume that you can recover without addressing the derogs.  Carefully research because it is possible to make things worse.

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@Anonymous wrote:

Is there going to be a long term difference if I get, say, ten of these cards?

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If -- and that's a big if with poor credit -- you could get approved for 10 new cards you'd kill your credit with the hard pulls and hits to your AAoA and you'd still have the derogs dragging you down.  It's unlikely that you'd see that many approvals IMO.

Addressing the derogs isn't going to be easy and it's going to be a long, slow process so be prepared to be in this for the long haul.

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@Anonymous wrote:

If one card can bump me 25 pts, will 5 cards bump me 125? Or is it not that simple?

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It's defintiely not that simple.  If the scoring models simply granted X points for doing Y then we would have already reverse engineered the scoring models.  You can't assume direct or linear relationships with the scoring models.

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@Anonymous wrote:

Meanwhile, from what I have read, CRAs use several different scorecards to assess a credit score.

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Not the CRA's -- creditors.  Creditors can and do differ in the scoring models and CRA's that they use to assess your credit but that's really not relevant to what you're asking about.

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@Anonymous wrote:

So, for myself personally, I have never owned a CC.

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In that case you do want to gradually (with your credit) work your way up to the general recommendation of at least 2-3 cards.  You may want to consider secured cards.

Just picking nits here but you don't actually own your credit cards.

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@Anonymous wrote:

I'm concerned that once I am on a better scorecard, I will lose MORE points per inquiry than I will on this scorecard. 

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HP's tend to have a bigger impact for thinner profiles and poor profiles.  Stronger profiles generally see less impact from each HP.

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@Anonymous wrote:

Meanwhile, I was approved for a CapOne (just got notice).  )))) this is my first ever CC.  I am very excited.  The limit is low ($500), so I am wondering what in my life costs $50 or less on a monthly basis (7-11 trip, maybe, lol) but I'm really excited at seeing this show up on the CRAs, and seeing what impact it has on my score (if any). 

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Keep in mind that you can pay prior to the date that your card reports to manage reported utilization.  Most cards report on statement date but make sure you verify when each of your cards reports.

[sweetschuni]

Continue learning and improving!

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Hi Everyone, I'm new to this forum and new to getting control of my score.  I have low, low scores (467 EQ, 495 TU, 526 EX).  My overall debt is not too bad, actually, but there are a few accts in collections (about 2/3 of which are aging out 2015/2016) and I havea state tax lien due to my ex not filing his taxes (trying to resolve this with the state) and a bad auto loan.  Both of these make up 7/8 of my bad debt. 

I have a CC showing up thru FPB, which I am honestly not sure I ever signed up for so I'm disputing it (it's a $395 debt, but it's killing me with a 195% CU ratio). The rest  of my total debt (excepting the tax lien and bad auto loan) total less than $500 (medical).That's the total sum of my debt. 

However, all the score sims are saying that getting a revolving acct is the way to go for a pretty good jump in pts.  My question is .... if I get a revolving acct (looking at CapOne secured), my score is simulated to jump about 25 pts.  Is there going to be a long term difference if I get, say, ten of these cards?  I realize amassing a lot of new credit will hurt my score initially, but really.... I mean, it's not like it can get much worse LOL.  I'm looking for the long term benefits of having a bunch of cards with a 10% or less CU over, say, 12-18 months.  If one card can bump me 25 pts, will 5 cards bump me 125? Or is it not that simple?  Thanks so much in advance for helping!

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Yes, I would get the Cap1 secured cc. I did that when I didn't have credit history 3 years ago. It's only $49 deposit to geta $200 CL. I had mine around 9 months before I applied for unsecured cc, which is my discover. Just used the secured card heavily and pay it off full and then you can leave some balance and pay it full again. That's what I did on mine. If you want a higher credit limit than $200 I believe they'll let you do that by depositing more money. I close that card once I got my Discover card which I think was a mistake at the time because it means my credit history went back to zero but I at least got an unsercured card.

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What do you mean your credit history went back to zero? Someone correct me if I'm wrong, but I thought positive history can stay on your report for up to ten years.

[Anonymous]

Thanks so much for the awesome way you responded to each one of my major concerns.  I am learning about credit for the first time, so this forum has been a HUGE help in learning what to do, and how to not do it wrong. 

I have no idea (no LEGAL idea, anyway, ha ha) on how to get derogs off my report.  I came across a site while I was browsing about it on my phone which gave a pretty explicit idea of how to remove derogs.  It involved how often to dispute, how to change what you are disputing, etc.  It also addressed "ghost" derogs, which pop up after they have been removed.  Ugh.  Seems like this is a lot harder than it should be- I'm thinking I can just go live off the grid until 2020 (when my last derog says bye-bye) and never let anyone near my credit again

Meanwhile, I have resigned myself to living in this house or renting until my credit is where I want it to be.  As I said before, I actually own this place, but the mortgage is in my ex husbands named.  It's his nasty little unpaid tax lien sitting on my report doing who knows what amount of damage.  There was a reason for the divorce- but that's a whole 'nother forum, lol.

Actually, me and the hubs were thinking about leasing- I mean, lots of smart guys and gals with killer credit lease their vehicles- they get top of the line, brand new vehicles every three years, and pay a lower overall cost.  I mean, for me to own the kind of home I want, I'm looking at about $1100 a mo in mtg (we live in Oklahoma folks, it's cheap out here), BUT, after you add in taxes, insurance, maintenance and repairs, it's really quite a bit closer to $1500, which is what the home want would rent for.  Hmmm.  It may be easier just to lease a premium home (no one checks credit out here for leasing, with the exception of a few prop mgt cos) until the kiddo is out of HS, (5 years), then get ourselves a nice little executive townhome. 

I'm not really seeing the benefit of home ownership today.  Of course, I'm female, so that's subject to change.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Hi Everyone, I'm new to this forum and new to getting control of my score.  I have low, low scores (467 EQ, 495 TU, 526 EX).  My overall debt is not too bad, actually, but there are a few accts in collections (about 2/3 of which are aging out 2015/2016) and I havea state tax lien due to my ex not filing his taxes (trying to resolve this with the state) and a bad auto loan.  Both of these make up 7/8 of my bad debt. 

I have a CC showing up thru FPB, which I am honestly not sure I ever signed up for so I'm disputing it (it's a $395 debt, but it's killing me with a 195% CU ratio). The rest  of my total debt (excepting the tax lien and bad auto loan) total less than $500 (medical).That's the total sum of my debt. 

However, all the score sims are saying that getting a revolving acct is the way to go for a pretty good jump in pts.  My question is .... if I get a revolving acct (looking at CapOne secured), my score is simulated to jump about 25 pts.  Is there going to be a long term difference if I get, say, ten of these cards?  I realize amassing a lot of new credit will hurt my score initially, but really.... I mean, it's not like it can get much worse LOL.  I'm looking for the long term benefits of having a bunch of cards with a 10% or less CU over, say, 12-18 months.  If one card can bump me 25 pts, will 5 cards bump me 125? Or is it not that simple?  Thanks so much in advance for helping!

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Yes, I would get the Cap1 secured cc. I did that when I didn't have credit history 3 years ago. It's only $49 deposit to geta $200 CL. I had mine around 9 months before I applied for unsecured cc, which is my discover. Just used the secured card heavily and pay it off full and then you can leave some balance and pay it full again. That's what I did on mine. If you want a higher credit limit than $200 I believe they'll let you do that by depositing more money. I close that card once I got my Discover card which I think was a mistake at the time because it means my credit history went back to zero but I at least got an unsercured card.

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What do you mean your credit history went back to zero? Someone correct me if I'm wrong, but I thought positive history can stay on your report for up to ten years.

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I close my secured CC before after one month of the Discover opened. So basically my credit history went back becuase technically my secured CC would be my oldest card but I close that right after I got my second card. I don't think a close credit card counts toward my AAoA. I'm not quite sure actually.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Hi Everyone, I'm new to this forum and new to getting control of my score.  I have low, low scores (467 EQ, 495 TU, 526 EX).  My overall debt is not too bad, actually, but there are a few accts in collections (about 2/3 of which are aging out 2015/2016) and I havea state tax lien due to my ex not filing his taxes (trying to resolve this with the state) and a bad auto loan.  Both of these make up 7/8 of my bad debt. 

I have a CC showing up thru FPB, which I am honestly not sure I ever signed up for so I'm disputing it (it's a $395 debt, but it's killing me with a 195% CU ratio). The rest  of my total debt (excepting the tax lien and bad auto loan) total less than $500 (medical).That's the total sum of my debt. 

However, all the score sims are saying that getting a revolving acct is the way to go for a pretty good jump in pts.  My question is .... if I get a revolving acct (looking at CapOne secured), my score is simulated to jump about 25 pts.  Is there going to be a long term difference if I get, say, ten of these cards?  I realize amassing a lot of new credit will hurt my score initially, but really.... I mean, it's not like it can get much worse LOL.  I'm looking for the long term benefits of having a bunch of cards with a 10% or less CU over, say, 12-18 months.  If one card can bump me 25 pts, will 5 cards bump me 125? Or is it not that simple?  Thanks so much in advance for helping!

---

Yes, I would get the Cap1 secured cc. I did that when I didn't have credit history 3 years ago. It's only $49 deposit to geta $200 CL. I had mine around 9 months before I applied for unsecured cc, which is my discover. Just used the secured card heavily and pay it off full and then you can leave some balance and pay it full again. That's what I did on mine. If you want a higher credit limit than $200 I believe they'll let you do that by depositing more money. I close that card once I got my Discover card which I think was a mistake at the time because it means my credit history went back to zero but I at least got an unsercured card.

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What do you mean your credit history went back to zero? Someone correct me if I'm wrong, but I thought positive history can stay on your report for up to ten years.

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I close my secured CC before after one month of the Discover opened. So basically my credit history went back becuase technically my secured CC would be my oldest card but I close that right after I got my second card. I don't think a close credit card counts toward my AAoA. I'm not quite sure actually.

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Closed accounts still count towards you AAoA. Maybe you were looking at something similar to credit karma, which doesn't track the AAoA of all your accounts.  They only track the open accounts.  If credit history went back to zero everytime we closed an account before we opened another it would be hard to measure credit history.