What to do, use cc or not use.

[Anonymous]

i'm rebuilding since bk discharge last july 2007. my first card since then is orchard (bis surprise, lol..300 limit, opened in august), an old macy's entry with a 300 limit that has been on my file for over a year. i have been charging a few dollars on orchard and paying it off in full every month, not really using macys.


last january 2008, i appllied for target red card, only 200 limit, and applied for hooters mastercard, they said approved online, i called them, they said they i should have received the card already, 750 limit with annual fee....right now, tha's not important. so, right now i have two revolving and two store cards, correct? my question is, to quickly rebuild my score, should i charge and pay in full, or just not use the card? both will be a zero balance regardless of which method i use, but will charging and paying get me a better score?


to be honest, i really like using my wachovia bank debit card better because of the points. i have no intention of carying any carryover balance on any unsecured credit cards. in perhaps 6 months to a year, i will be applying for a car loan, perhaps about 5-8 thousand, and would like to get a good rate if that is even possible with a bk record, but would not borrow too much if i can help, hoping to just get a loan to diversify my credit. i would most like put a huge down payment if i have it and borrow a few thousand for a one to 1.5 year car loan. i'd like to diversify my credit and build it quickly so i could possibly entertain the thought of buying a condo once the housing market bottoms in a year or two. any advice?


i'm guessing my scores are in the low to mid 600's.....about 40 point gaps between the 3 scores. i can only assume since i think those free credit scores i use to check my score are not real fico.....i intend to use the myfico package sometime in june after i have history in my hooters and target cards.


also, should i apply for more new cards a few months from now?

Message Edited by whoisjohngalt7 on 02-10-2008 01:01 PM

Message Edited by whoisjohngalt7 on 02-10-2008 01:01 PM

[haulingthescoreup]

Hi, welcome to the forums!

Are you a Firefox user? Your post seems to be a victim of the dreaded Giant Firefox Paragraph Blob, and I know that my 53-year-old eyeballs crossed about 5 lines in.

If you could, please click on the options button at the top right of your post and choose edit message. It will re-open in a text box, still as a blob. Look down at the bottom left, and you'll see a small click box next to "Automatically convert carriage returns to HTML line breaks." Check that, and that will preserve your paragraphs.

Anyway, once you do that, go back and re-insert your paragraphs. You might see < div > or < br > where they used to be. Then click preview post and the bottom right to see if everything behaved. Once you're happy with it, click "submit post" again. hope that helps!

Message Edited by haulingthescoreup on 02-10-2008 11:53 AM

[Anonymous]

FICO likes to see at least a little bit of CC use, but does not like to see a lot of CC debt.  What some members here do is use their cards for a small purchase every few months, and let that balance report to the CRAs.  If you do this, don't let the reported balance be more than 9% of that card's CL, and don't let more than half of your cards report a balance at the same time.

If you just let your cards sit and don't use them at all, FICO doesn't give you any credit for them after a while because you're not demonstrating responsible use of credit, you're demonstrating no use of the credit available to you.  I think it's around 6 months of $0 balances on a card that FICO will stop counting it in its utilization calculations.

Also, CCCs don't like it when you don't use your cards either, and many of them will either CLD you or close your account for inactivity unless you show at least a little bit of use on them.

Just charge a cheeseburger on each of them every once in a while to keep everyone happy.

Hope this helps.

[Anonymous]

Just to add:

As far as getting a loan just to improve your score, it probably won't help much, if at all.  Installment loans (non-mortgage) are the least important types of accounts for FICO.  Your payment history and utilization on revolving accounts are much more important.  Don't take out a loan just for FICO, take out a loan if you need one.

As far as applying for new cards in a few months, you will be hit with an inquiry for each card you apply for, and if you are approved, FICO will hit you again for having a new account once it shows up on your CRs.  Also, every time you add a new account, you are reducing your average age of accounts, which is an important consideration for FICO.  This effect will be temporary, however, and once you establish good history on the new accounts and let them age a bit, your FICO should recover and even be higher than it was before, provided nothing else bad happens on your reports in the meantime.

Since you said you plan to apply for a mortgage in 1-2 years, do keep in mind that mortgage brokers generally don't like to see a lot of new accounts, so it's advisable to avoid applying for new credit 6 months to a year before you plan on mortgage shopping.

Good luck.

[Anonymous]

Great advice cheddar

[Anonymous]

thanks for the advice guys.

i was planning to apply for a couple more cards like 6 months from now after i check my fico's during that time to see if good history since would help substantially.

but to be honest, i don't know of any other cards who are bk friendly besides the ones i already have.

i really don't know if these four cards with no balance, timely paid would improve my scores to the high 600's, if not flirt with 700 by year's end.

i've challenged my reports to the point of the only ones left are the ones included in the bk. all have been told to report 0 balances, because some of them were not doing so, so i'm sure that would help my score.

any other advice to help my scores to the desired levels by year's end besides what i'm already doing?

[Anonymous]

whoisjohngalt7 wrote:

but to be honest, i don't know of any other cards who are bk friendly besides the ones i already have.

There is a "BK Friendly Credit Cards" sticky thread at the top of this forum.

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whoisjohngalt7 wrote:

i really don't know if these four cards with no balance, timely paid would improve my scores to the high 600's, if not flirt with 700 by year's end.

---

Without knowing what your baddies look like, how old they are, and most importantly, without knowing what your current scores are, that's not really an easy question to answer.

I know you want to wait to pull your scores, but until you know where you're starting from, nobody can really predict what they might look like a year from now.

Good luck.

Message Edited by cheddar on 02-10-2008 04:14 PM

[Anonymous]

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@Anonymous wrote:

@Anonymous wrote:

but to be honest, i don't know of any other cards who are bk friendly besides the ones i already have.

There is a "BK Friendly Credit Cards" sticky thread at the top of this forum.

---

@Anonymous wrote:

i really don't know if these four cards with no balance, timely paid would improve my scores to the high 600's, if not flirt with 700 by year's end.

---

Without knowing what your baddies look like, how old they are, and most importantly, without knowing what your current scores are, that's not really an easy question to answer.

I know you want to wait to pull your scores, but until you know where you're starting from, nobody can really predict what they might look like a year from now.

Good luck.

Message Edited by cheddar on 02-10-2008 04:14 PM

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gotcha,

like i said , the only scores i pulled are several from the freebies site, which i doubt are real fico's. they range from the low to mid 600's.

i have about 5-6 revolving included in bk, chase was charged off to colelctions and that was paid in settlement...chase should be coming off of one bureau next year...let's see, 2 crap 1, chase, aspire, shell gas card paid in settlement, best buy, car loan IIB.....that is it.

the only thing in collections was the charged off by chase which was settled for less...this will come off next year i believe.

those are what is weighing me down.

the good stuff.

an old providian i closed in good standing a long time ago.

the good part currently is macy's, which is actually not my account, i use to have a robinson's may, that i paid in settlement, then i guess they were bought out my macy's so that got included in my report as good standing, but no card.

orchard, which was opened in august 2007.

target and hooters, opened in 01/08. my room mate got my card from the mail and just gave it to me today.

inquiries are from my bank, cell phone, orchard, and im sure hooters and target.

macys 297 = july 2005

hooters 750 = january 31 2008

target 200 = january 31 2008

orchard 300 = august 2007


bankruptcy discharge in july 2007
all have 0 balances.

[Anonymous]

OK, I really hate to be the bearer of bad news, but I'm not sure you can count on flirting with 700s, as you put it, by the end of this year.  At that time, the BK will be only 1.5 years old, and with a recent BK (1.5 years is considered recent for a BK), you really shouldn't expect more than low to mid 600s.

You will have one positive account just barely over a year, and two positive accounts still considered "new."

Also, your INQs from the apps in January will still be counting against you.

The good news is that all of your baddies will be one year older, so some of them may start to hurt less than they do now.

Now, I could be way off track, but I'm just not seeing the makings of a 700 within the next 10 months.

But as long as you keep your new accounts in good standing, and follow the tips I mentioned in the above posts, I'm sure you can get there.  It just may take a little more time than you'd like.

Anyone else have an opinion?  Back me up?  Or tell me how wrong I am, too, if you want?

Message Edited by cheddar on 02-10-2008 09:39 PM

[gdtobefree]

Best advice I can give, Use each card once for a small amount, 20 bucks, DO NOT pay it in full pay in 2 months, do that 3-4 times through the year, potential lenders like to see a payment history BUT do not like to see that you used up to your CL on any card, they DO look at the high balance on your credit file. If you don't want to do that and they charge a AF DO NOT pay that AF off use it to make 2-3 payments.

Showing them that you don't use your full balance proves to them that you won't go haywire with your CCs after you get your mortgage.

Whatever you do DO NOT close any of them, NEVER close an account in good standing, it will hurt you more then help you.