Would you use Retail Cards to improve your Utilization?

[MountainHiker]

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@FireMedic1 wrote:

So you do have 2 Cap1 cards. Sounded like just 2 store cards was all you had. The baddies will hold you back till you settle or fall off. Especially Charge offs 

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Yes it's four cards total. And they're all excellent cards. Rebuilding credit is definitely a long process and truth be told I'm actually making good progress. Just have to keep adding positives while subtracting the negatives. I plan to attack the Chase Bank charged off account but before that I will attempt to  join a excellent credit union in order to build a relationship with a customer friendly lender. The prime banks are not going to look at me seriously until my file is clean which won't be for two more years. Not a problem. Life is all about solutions. 

Thanks for all your thoughtfulness. Very much appreciated. 

[Gollum]

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@MountainHiker wrote:

Hi everyone.

I wanted to learn what everyone else's experience and opinion has been like while rebuilding your credit from a rough period.

When you went through that period when many lenders wouldn't offer you credit, did you utilize Subprime credit cards only and just wait out that period until your credit improved? Or did you utilize every possible lender including Retail store cards?

My Bloomingdale's and Macy's accounts have been amazing to me. Extremely loyal and generous, and they factor in my needs more than most major credit card lenders do with people who have excellent credit.

And they do this despite my credit file having 2 derogatory accounts remaining. And I don't spend much on these two Retail Cards. I only buy what I need. There have been at least two months when I don't buy anything and I keep my balance at zero. And every month Bloomingdale's and Macy's still increase my spending limit. 

What has been your rebuilding experience? Did you also use Retail Cards to improve your overall Utilization? 

Personally speaking it's been extremely helpful. My major credit card spending limits are very small, and there are months when I need to carry a small balance. But because of my large spending limits on my Retail Credit Cards my utilization stays very low and that is very advantageous. 

If you can't get approved for a major Prime credit card lender would you use Retail Cards for utilization and if you like that store for shopping? And if you can get approved for prime credit cards would you use Retail Cards for utilization?

BTW Macy's and Bloomingdales do offer American Express store cards once your score improves. Which is pretty cool to have a store card that can be used anywhere. 

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Every month, I paid my current bills and the collection agency. Eventually, I paid off the collection agency. I kept paying my current bills. Eventually, I bought a new car at 12.5% interest. I paid the car payment every month. Eventually, I re-financed my almost paid-off auto loan at a lower interest rate and used the equity in my auto as part of my down payment on my house.

The moral of the story is: pay your bills, and keep paying your bills.

[MountainHiker]

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@Gollum wrote:

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@MountainHiker wrote:

Hi everyone.

I wanted to learn what everyone else's experience and opinion has been like while rebuilding your credit from a rough period.

When you went through that period when many lenders wouldn't offer you credit, did you utilize Subprime credit cards only and just wait out that period until your credit improved? Or did you utilize every possible lender including Retail store cards?

My Bloomingdale's and Macy's accounts have been amazing to me. Extremely loyal and generous, and they factor in my needs more than most major credit card lenders do with people who have excellent credit.

And they do this despite my credit file having 2 derogatory accounts remaining. And I don't spend much on these two Retail Cards. I only buy what I need. There have been at least two months when I don't buy anything and I keep my balance at zero. And every month Bloomingdale's and Macy's still increase my spending limit. 

What has been your rebuilding experience? Did you also use Retail Cards to improve your overall Utilization? 

Personally speaking it's been extremely helpful. My major credit card spending limits are very small, and there are months when I need to carry a small balance. But because of my large spending limits on my Retail Credit Cards my utilization stays very low and that is very advantageous. 

If you can't get approved for a major Prime credit card lender would you use Retail Cards for utilization and if you like that store for shopping? And if you can get approved for prime credit cards would you use Retail Cards for utilization?

BTW Macy's and Bloomingdales do offer American Express store cards once your score improves. Which is pretty cool to have a store card that can be used anywhere. 

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Every month, I paid my current bills and the collection agency. Eventually, I paid off the collection agency. I kept paying my current bills. Eventually, I bought a new car at 12.5% interest. I paid the car payment every month. Eventually, I re-financed my almost paid-off auto loan at a lower interest rate and used the equity in my auto as part of my down payment on my house.

The moral of the story is: pay your bills, and keep paying your bills.

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Awesome testament. Thank you for sharing that advice. 

[SweetCreditObsession]

@MountainHiker, I absolutely used retail cards to pad my utilization especially when I was rebuilding. They grew faster than my major cards and helped me get larger SL on new cards as I added them. Best wishes on building up your TCL.

[Rogue46]

I used the SCT in the beginning of my rebuild for a couple store cards and it helped get my credit journey off the ground but after picking up a few major cards after that I have little use for them.

As for utilization purposes it doesn't matter to me since I PIF every month. So I guess my answer is if you have high utilization and want to balance it out then it makes sense but other then that I'd stay away from store cards unless you shop a certain place alot then go for it. 

[MountainHiker]

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@SweetCreditObsession wrote:

@MountainHiker, I absolutely used retail cards to pad my utilization especially when I was rebuilding. They grew faster than my major cards and helped me get larger SL on new cards as I added them. Best wishes on building up your TCL.

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Awesome data points. Thank you for your input.

I'll be honest with you. It almost feels counterproductive not to use Retail Cards to improve the strength of a credit file. As you mentioned when rebuilding credit most lenders are not knocking on the door to offer spending limits higher than $500 to $1000. But the opposite is true with retail credit card accounts.

It's to that person's advantage having higher spending limit accounts on the report if they would like to be approved for major credit cards in the future. Especially considering that most tradelines are now decided by a software algorithm that looks at a individual's credit file history and current spending limits. And those factors are taken in consideration for new approvals. 

If creditors did not take in consideration your current spending limits when determining how much to offer a new applicant. Then that would be one reason not to seek out the high spending limits that retail credit cards provide. But that's not the reality of credit approvals. 

[MountainHiker]

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@Rogue46 wrote:

I used the SCT in the beginning of my rebuild for a couple store cards and it helped get my credit journey off the ground but after picking up a few major cards after that I have little use for them.

As for utilization purposes it doesn't matter to me since I PIF every month. So I guess my answer is if you have high utilization and want to balance it out then it makes sense but other then that I'd stay away from store cards unless you shop a certain place alot then go for it. 

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Hi and thank you for posting your journey.

My job requires that I travel multiple times per month. In doing so I often have to rent transportation during those trips. My two major credit cards have very small spending limits which means my utilization percentage would be in major trouble every month. 

Thankfully because of my two store cards I'm able to keep my overall utilization near 10%.

And I pay in full most months but due to my traveling responsibilities it's not often possible to have a zero balance before the statement date. 

That's one reason why I would like to get approved for an American Express charge card. 

In any case I am appreciative for my utilization padding store credit cards. 

Bloomingdale's and Macy's has been awesome to me. In only three months Bloomies has increased my limit from $1000 to $6000. And by this months end I hope to increase it to $10K. 

And I will stop there because that will be more than enough for my utilization purposes. And will work on doing the same with Macy's. 

[GApeachy]

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@SweetCreditObsession wrote:

helped me get larger SL on new cards as I added them. 

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This^^^^^.....worked like a charm.

Btw, you're actually in the most exciting time of your credit history.  So the two years you have left before everything is squeaky clean are the foundation years. Build wisely and strategically utilizing everything you can to boost your profile.   Then, in two yrs, when you present yourself to the big dawgs look at what you're profile is wearing. High limits, low utl, and a few years credit history with charge and revolvers.

Wisely......hootie-hooo🦉

[Rogue46]

In my experience the retail card credit limits go up much faster then the majors, for awhile i was getting $2k+ increases nearly every month.

My Boscovs and Lowes cards are north of $30k which definitely helps utilization 

[MountainHiker]

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@GApeachy wrote:

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@SweetCreditObsession wrote:

helped me get larger SL on new cards as I added them. 

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This^^^^^.....worked like a charm.

Btw, you're actually in the most exciting time of your credit history.  So the two years you have left before everything is squeaky clean are the foundation years. Build wisely and strategically utilizing everything you can to boost your profile.   Then, in two yrs, when you present yourself to the big dawgs look at what you're profile is wearing. High limits, low utl, and a few years credit history with charge and revolvers.

Wisely......hootie-hooo🦉

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Awesome awesome reply.

And it's much appreciated. Love the positivity it definitely filters in. 

When it comes to rebuilding credit, I now approach this situation like Bob the builder.