What to do?

[Anonymous]

I'm at a point where I'm not sure what to do. I opened a discover card almost 4 months ago, the 3rd statement is coming up in 5 days and I've paid the card off (sometimes multiple times before statement closed). I just product changed yesterday from the Chase Slate to the Freedom Unlimited that I got 2 years ago (confirmed that there wouldn't be a hard pull. I've also pre-qualified for the Chase Freedom, Freedom Unlimited, and the Sapphire Preferred. Also Pre-approved for the Amex Gold and Amex Delta Gold Cards. I want to start traveling and I wanted to know how I should handle things. I like the perks of the Sapphire Reserve and the Amex Platinum, but I don't want to waste an inquiry if it's almost guaranteed that I'm not going to get them. My current setup is as follows:

Capital One Platinum (Secured) (Opened 2012): $600 - 0% Util

Capital One Platinum PC to Captial One Quicksilver (Opened 04-2017 - PC last month): $500 - 0% Util

Chase Slate PC to Chase Freedom Unlimited (Opened 04-2017 - PC yesterday): $500 - 0$ Util

Discover IT Cashback (Opened in March 2019): $1250 Util - 20% (can pay down to below 8% before the statement close and pay off at due date)

Income: Just over 100k and household income about 165k

Collections:

Experian: 1 collection posted 8 months ago for an old sprint account my mother and grandmother were using: $372

Equifax: 2 collections - 1 for sprint mentioned above and 1 for an IBC bank account I had back in 2012 (set to fall off in Decemeber...was paid in full in 2012)

Transunion: Same as Equifax

Scores: 

EX:660

EQ:660

Transunion:674

Payments:99% - Last late 2 years ago

Cards on my "to get" list: 

Chase Sapphire Reserve or Sapphire Preferred if denied
American Express Platinum
Marriot Bonvoy Boundless by Chase
UnitedSM Explorer Card by Chase
Chase Ink Business Preferred
American Express Gold
Hilton Honors Amex Ascend Card
Alliant Visa Signature Credit Card

I can pay off the collection now but I'm unsure how it will affect my credit score. I also have a Conn's account that I can pay down to 8% or pay off, but unsure how it will affect my credit. Looking to not have any drop in score unless it's to apply for cards. Looking to optimize cards for travel but am open to cashback cards as they will grow my available credit. 

ETA: I also own a business which is not displayed in my income above and am open to business cards as well. 

[Anonymous]

Well well well that's an insteresting collection there.  The thing is though your scores and limits are a bit on the lower side for approvals to happen with the cards you're wanting.

I know from experience those collections are holding you back significantly especially if you were to need to apply for housing at some poiint.  In my situation decades ago I had 2-3 collections on my reports from the past and the place I wanted to get wouldn't approve a lease w/o clearing them up first.  

For less than $500 for the one I would just go ahead and start negotiating with them to PFD on it and just be done with it.  The bank account on the other hand since you didn't list an amount is hard to say but, it's worthwhile to clear it up as well.

Ideally you want to be a transactor each month and not a revolver when it comes to these balances and CL's.  Carrying a balance doesn't make sense right now when it's costing you $ to carry it.

Additionally your 2 Cap1 cards are bucketed from the looks of it and won't be growing any time soon.

Chase @ $500 for ~2 years isn't a good sign either but, then again it was opened with the 2 Cap1 accounts showing low limits.  A future app should yield a better CL from them once your reports are cleaned up.

Disco will grow as you use it and hit the CLI button monthly 

Otherwise after some cleanup and optimizing your reports you should then be able to tackle some of the cards you want.

Cards on my "to get" list: 

Chase Sapphire Reserve or Sapphire Preferred if denied - CSP requires $5K opening limit and CSR starts at $10K  (need to boost your current limits to have some success)
American Express Platinum - doesn't report a CL
Marriot Bonvoy Boundless by Chase - might be possible as a "starter" w/ Chase 
UnitedSM Explorer Card by Chase - might be possible as a "starter" w/ Chase 
Chase Ink Business Preferred - can't say 
American Express Gold - doesn't report a CL
Hilton Honors Amex Ascend Card - might be possible as a "starter" w/ Amex
Alliant Visa Signature Credit Card - haven't heard anything bad other than after the first year it's not really worth the AF

[Anonymous]

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@Anonymous wrote:

Well well well that's an insteresting collection there.  The thing is though your scores and limits are a bit on the lower side for approvals to happen with the cards you're wanting.

I know from experience those collections are holding you back significantly especially if you were to need to apply for housing at some poiint.  In my situation decades ago I had 2-3 collections on my reports from the past and the place I wanted to get wouldn't approve a lease w/o clearing them up first.   I already purchased a home 2 years ago, they never asked me about the bank collection and the Sprint account wasn't in collections at the time. I thought they were paying it monthly. 

For less than $500 for the one I would just go ahead and start negotiating with them to PFD on it and just be done with it.  The bank account on the other hand since you didn't list an amount is hard to say but, it's worthwhile to clear it up as well. I tried to negiotiate with Source Receivables. They stated that they do not do any type of PFD. I reached out to sprint and they stated that "they will mark the account that I no longer owe any debt", which I'm assuming they're just going to make the collection paid. 

Ideally you want to be a transactor each month and not a revolver when it comes to these balances and CL's.  Carrying a balance doesn't make sense right now when it's costing you $ to carry it. I pay my accounts in full each month, I don't revolve. The 20% on my Discover shows that because I pay everything (bills included) on my discover card, then I pay my Discover card. I've read that it might be a good idea to pay the card down to 1%, let the statement close, then pay off the one 1% before the due date. Since Discover reports to CRAs the day after statement close.

Additionally your 2 Cap1 cards are bucketed from the looks of it and won't be growing any time soon.

Chase @ $500 for ~2 years isn't a good sign either but, then again it was opened with the 2 Cap1 accounts showing low limits.  A future app should yield a better CL from them once your reports are cleaned up.

Disco will grow as you use it and hit the CLI button monthly 

I reached out to Chase last week about CLI and they stated that I wouldn't be able to get any CLI without a HP. As I said, they had pre-approved me for the Chase Freedom, Freedom Unlimited, and Sapphire Prefered. I only want the Chase Sapphire Reserve for the benefits as I'll be traveling before a year from June. Otherwise I'd just apply for the CSP and a Freedom card. Given the 2/30 and 5/24 rules they have.

Otherwise after some cleanup and optimizing your reports you should then be able to tackle some of the cards you want.

Cards on my "to get" list: 

Chase Sapphire Reserve or Sapphire Preferred if denied for CSR - CSP requires $5K opening limit and CSR starts at $10K  (need to boost your current limits to have some success)
American Express Platinum - doesn't report a CL
Marriot Bonvoy Boundless by Chase - might be possible as a "starter" w/ Chase 
UnitedSM Explorer Card by Chase - might be possible as a "starter" w/ Chase 
Chase Ink Business Preferred - can't say 
American Express Gold - doesn't report a CL
Hilton Honors Amex Ascend Card - might be possible as a "starter" w/ Amex
Alliant Visa Signature Credit Card - haven't heard anything bad other than after the first year it's not really worth the AF

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So my main question is, should I just go ahead and pay the collection in full to Sprint, even if it won't be taken off my report? I just don't want to pay it, then my score takes a dive because of how algorithms see what's reported. 

[Anonymous]

Hmmm... while I was replying the thread removed your reply.....

With Disco I just charge stuff normally like bills as you do and have it setup for auto pay.  It worked well over the last few years to bring it up to a 50K limit.  20% of your limit is a bit much for scoring purposes.  If you have a small bill like Hulu or Netflix to just generate activity monthly until the limit grows that would be easier to manage for the most points gain.

It's almost always best to clear up any outstanding debts if you can.  For the small debts you mentioned you're in a better position with them gone.  

[Anonymous]

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@Anonymous wrote:

Hmmm... while I was replying the thread removed your reply.....

With Disco I just charge stuff normally like bills as you do and have it setup for auto pay.  It worked well over the last few years to bring it up to a 50K limit.  20% of your limit is a bit much for scoring purposes.  If you have a small bill like Hulu or Netflix to just generate activity monthly until the limit grows that would be easier to manage for the most points gain.

It's almost always best to clear up any outstanding debts if you can.  For the small debts you mentioned you're in a better position with them gone.  

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Got you. I'm trying to get on Sprint chat to confirm if I pay through their portal, will they recall the collection from the CO and from my report. As I said, the bank account that went to the collection was PIF back in 2012, so there's nothing I can do about it until after December when it falls off. 

[Anonymous]

I missed the bank account part being PIF 2012.  Yeah, as needy as Sprint is even if they don't do the payment through the portal just pay it off to save yourself from complications when you apply for something and have forgotten about it and it rears its ugly head again.

[CreditInspired]

OP

There are two problems that will hold you back from getting the cards on your wishlist: your existing cards have toy limits and that 8-mo old collection is too new. 

IMHO, if it were me, this is what I would do:

1. Pay off all 3 collections.

2. Ask for a CLI on Discover. If it’s instantly approved, call and do a double dip. (Good idea to pay down to 8%)  

Also, where are you getting the preapprovals from? I fear they are just marketing. Make sure to see if you’re prequalified from the credit cards websites.

Are there green checkmarks showing for those prequals for the Chase cards?  

GL2U

[Anonymous]

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@CreditInspired wrote:

OP

There are two problems that will hold you back from getting the cards on your wishlist: your existing cards have toy limits and that 8-mo old collection is too new. 

IMHO, if it were me, this is what I would do:

1. Pay off all 3 collections.

2. Ask for a CLI on Discover. If it’s instantly approved, call and do a double dip. (Good idea to pay down to 8%)  

Also, where are you getting the preapprovals from? I fear they are just marketing. Make sure to see if you’re prequalified from the credit cards websites.

Are there green checkmarks showing for those prequals for the Chase cards?  

GL2U

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1. There are only 2 collections. 1 is for Sprint, $372. 1 is for a bank account I had back in 2011-2012, it went to collections and was PIF in 2012. I didn't use the account and apparently, they were charging monthly fees (IBC Bank for anyone who's wondering). 

2. Would it just be best to pay it down to 1% then try the CLI and double dip? 

3. The credit card pre-approvals are from the credit card issuers website, when I log into my Chase account, they are there under "Just for you" (Green star, not a checkmark) and I did a "check for offers" for Amex and that's what they stated I was pre-approved for. 

[Anonymous]

Disco doesn't care about balance when going for a CLI in my experience of ~20 CLI's over the years.

Pre-Approvals are good and almost a lock when it comes to Chase and Amex but, if you want the most bang for your buck I would payoff Sprint and see what your updated scores look like before pulling the trigger on the apps.  I'm just advising to be in the best possible spot before applying to get the most out of them w/o having to recon the limit or wait for CLI's to make them more useable.

[CreditInspired]

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@Anonymous wrote:

Disco doesn't care about balance when going for a CLI in my experience of ~20 CLI's over the years.

Pre-Approvals are good and almost a lock when it comes to Chase and Amex but, if you want the most bang for your buck I would payoff Sprint and see what your updated scores look like before pulling the trigger on the apps.  I'm just advising to be in the best possible spot before applying to get the most out of them w/o having to recon the limit or wait for CLI's to make them more useable.

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Thanks @Anonymous. This is really good to know. 😁