Rebuilding With Credit Cards Help!!

[ks1987]

Ok guys, my current score is a 598 (Equifax), 591 (Transunion) and a 592 (Experian).  I have had one Cap One cc for the last few years, but it has always had a small CL of $500. I have kept a 0 balance or a very low one. I read that the Orchard Card is good to help rebuild, so I applied and got approved for a $300 CL. Will such a small CL hurt me now? I'm so scared I made a mistake. Any suggestions on how to improve credit score with these cards is greatly appreciated!

[espnjunkie]

You are going about it the right way. Limits are going to be small while you are rebuilding, but they cann help you get some positive payment history under your belt and boost your scores over time. Garden, pay everything in full if you can and make sure to always be on time.

[ks1987]

Great! I had a few late payments on a few things back in 2010, but everything else on my credit is great! I am always on time with everything and have been since September of 2010. My credit to debt ratio is low. I have like $5700 in student loans and a car that I owe $8300 on. My capital one cc has a zero balance, recently (which hasn't been reported yet) and this new card will have a 0 balance with a $300 limit, so do I leave both of them at 0? Or what's the best way to handle them?

[espnjunkie]

Right now it's not hugely important. Your credit score is a snapshot of your credit at that exact time. Utilization month to month doesn't really matter too much. The general rule of thumb for the 'best' results (ymmv obviously) is to have all your cards report a balance of 0, but let one card report a 1-9% utilization balance report.

At this point it is most important that you try to pay on time and in full each statement if you can

[ks1987]

Thanks so much! What kind of immediate affect do you think it will have on my score? Will it lower it at first?

[espnjunkie]

Right now what your scores are is not that important. Taking a small point hit isn't a big deal when you needto focus on the long term and big picture of rebuilding. Unless you are planning on applying for new credit sometime soon your current scores don't make much difference.

Garden mode moving forward and you will see progress in 6-12 months

[ks1987]

Thanks so much for your information! I feel like I made the right decision to open the card. Do you have any idea of how paying off student loans a little at a time while still making good monthly payments will help? I thought about getting a new vehicle in the next few months, but not sure.

[espnjunkie]

Paying off debt can always help haha. It's a marathon not a sprint to restore your credit

[Wolf3]

I think adding the 2nd CC was a good idea.  

IMO, you should use your cards for normal expenses and PIF every month.     CC issuers want you to use their cards, they have no reason to give CLI if you don't use them.

[Anonymous]

I got a card with a $200 limit from chase which ticked me off. Then my next card was over $5000.

I havent seen any evidence that a low limit card affected my score or ability to get a high limit card.

It seems to be more about credit usage, how much total credit you have now, paying on time and using the hell out of your cards.

The more I use my cards the more I get invitations for more cards and more limit increases.