Would you use Retail Cards to improve your Utilization?

[MountainHiker]

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. 

[FireMedic1]

Whats holding you back from a non-store card? Its best to have a MC/Visa/Discover.  You dont improve util %'s unless your carrying high balances and pay them down. Doesnt appear your doing this with your 2 store cards. Do you have any other cards besides the 2 store cards.

[Calistal]

I absolutely used store cards to pad utilization and build my profile. I started out with a singular card for $300 from capital one, but the next 2 or so cards I got were store cards. It never hurt me, only helped. I'm a big fan of using what you have rather than waiting around 😂 but I've got ADHD and can't keep form a long term goal appropriately to save my life. 

[mrgarrettscott]

When I was rebuilding, I went the secured credit card route. My primary bank at the time said the minimum deposit was $300 which I did and lived with that $300 limit for about six months before applying for and getting approved for a CAP1 QS. I think the store card route is a harder way to rebuild because it is locked to a store versus being accepted everywhere like Visa and Mastercard. My two store cards, Amazon Prime and Home Depot certainly help my utilization as the CLIs kept coming.

[slickwidit]

Everyone has given great advise so far. The short answer is yes, here at FICO we do pad lol.

[M_Smart007]

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@slickwidit wrote:

Everyone has given great advise so far. The short answer is yes, here at FICO we do pad lol.

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And some pad more than others

[MountainHiker]

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@FireMedic1 wrote:

Whats holding you back from a non-store card? Its best to have a MC/Visa/Discover.  You dont improve util %'s unless your carrying high balances and pay them down. Doesnt appear your doing this with your 2 store cards. Do you have any other cards besides the 2 store cards.

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FireMedic

I ask that question all the time. What is holding these lenders back from offering me higher limit prime credit cards. 

My scores are in range for approval. It's true that my two capital one cards are kinda new. 9 months and 2 months. My Macy's is s 8 months and my Bloomingdale's is 4 months. That's probably part of the issue.

Fortunately my student loans are 13 years old. Average age of total credit is 9 years old. Experian rates the age of my credit file as excellent. And I get a excellent for credit mix. 

I think it's probably like a few of the very kind posters have said. Until those baddies fall off I will need to go with a good credit union. Banks are more conservative than credit unions. 

I think it comes down to the fact that banks are simply not going to consider my file for a credit card while those two baddies are in tow. And to be honest I'm not sure if I want to pay off that Honda financial charge off. Now I'm wondering if 24 months is all that long to wait before they age off. 

$20k is a lot of money.

But I am leaning towards paying off Chase Bank because that debt is more manageable. Big difference between $1900 and $20k. 

And negotiating a charged off account comes with some risk. If I try to settle that thing there's a chance of re-aging it. 

Right now I'm trying to learn as much information as possible. And as much information as the good people on this website are kind enough to offer. 

[MountainHiker]

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@Calistal wrote:

I absolutely used store cards to pad utilization and build my profile. I started out with a singular card for $300 from capital one, but the next 2 or so cards I got were store cards. It never hurt me, only helped. I'm a big fan of using what you have rather than waiting around 😂 but I've got ADHD and can't keep form a long term goal appropriately to save my life. 

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Awesome input.

I know some people frown on the method of using Retail Credit Cards. And I totally understand why. They can only be used at that retail store. 

But I agree with you that they work extremely well for padding. And I don't often carry high balances, but it does happen some of the time. And these Retail Cards seem to protect my credit score to a large degree. 

But also my scores went up  substantially after adding additional tradelines. 

From the start, I wondered if adding additional tradelines and especially Retail Cards would hurt my scores or  boost my FICO scores, and it definitely helped. 

I'm fully aware that most people recommend sticking with a credit mix that includes only cards that are majors. But let me attest to the experience of not being able to get approved for prime credit cards while   benefiting from Retail Cards. 

I'm hoping my two high spending limits on my Retail Credit Cards will help me get approved for a Prime high limit major credit card. My Capital One cards have a $1000 & $500 SL.

But my Bloomingdale's and Macy's accounts are at $6000 & $4100. 

And I know that's not a lot compared to many of the wonderful posters on this site, but it's light years where I was at 12 months ago. 

Twelve months ago Capital One wouldn't offer me a secured credit card. True fact. 

I was like the poor beaten up puppy looking for someone kind to pet me. 

[MountainHiker]

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@mrgarrettscott wrote:

When I was rebuilding, I went the secured credit card route. My primary bank at the time said the minimum deposit was $300 which I did and lived with that $300 limit for about six months before applying for and getting approved for a CAP1 QS. I think the store card route is a harder way to rebuild because it is locked to a store versus being accepted everywhere like Visa and Mastercard. My two store cards, Amazon Prime and Home Depot certainly help my utilization as the CLIs kept coming.

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Utilization is a big deal for maintaining a decent credit score. And in my case because I have small limits there are times when I need to rent vehicles while out of town and my major credit card utilization is going to suffer. 

During those weeks my Retail Cards really save the day. Otherwise my overall utilization would be at around 80 to 90% instead of 12%> 

[FireMedic1]

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