Am I on the right track?

[sycotik]

  I have read this forum for about 4 hours now looking over everything I can.  I am sure I have a lot more reading to do.  But, from what I have read so far I want to make sure I am on the right track.  I just pulled my EX score and I am at 652 (I will use myfico starting next month).  I have 2 credit cards.  One has a limit of $2500 and one has a limit of $1000.  The latter is paid off and has been $0 balance for about 2 years.  I probably need to use it sparingly just to keep it on record.  The other will be paid off down to $100 by the end of next month.  I have a personal loan for 5k which will also be PIF by the end of January.  Lastly I have a car loan for 10k with 8k remaining.  My credit history is about 6 years and my average history is 2.5 years. I have 2 collections that are PIF.  One is going to drop off in March 09 and the other I am going to write a GW letter to see if they will take it off. 

  I am wondering if I should get a store card or some other credit card to help with the revolving credit.  I was thinking of just asking for a CLI on the $2500 because the last one I got was last March (went from $1000 to $2500).  Is there anything else I should do in the next couple of months that would help out?  I could probably pay off the car in 6 months but that is my only installment credit I have (no mortgage or anything else).

Thanks much

[SCF]

Welcome to the forums, and Merry Christmas!

I think you could definitely stand to have another CC or two if you want, maybe one more CC and one store card (no VISA/MasterCard logo).  You might take a bit of a hit initially for the inquiries and new accounts, and drop to your average age, but it should help your utility stay low, and part of your score is based on how many accounts report a balance, so having 4 means you don't have to worry about that as much.  Only have as many CCs as you're comfortable with, especially knowing that you'll need to use them regularly.  CCCs have become much stricter about closing unused accounts as they try to get some potential debt off their books by reducing the CLs they have out there.  Try getting a CC from your local CU, it's a great way to establish a credit relationship with them and they often have the best rates for auto and home loans.

Other than that, I think you are right on track.  As far as having an installment loan, that is important to your mix, but mix is a small part of your score, so I would say do whatever is best for you financially in terms of paying off your auto loan and when you get ready to fine tune your scores for a mortgage or other new account, plan ahead to get an auto or personal loan in there several months ahead of time for the installment mix.

Good luck on getting that collection removed with GW, you should see a boost when one of them drops off next year!

[sycotik]

Thanks much for the quick reply.  Is there any reason I should request that "store" credit card now before the end of the year?  Does that make a difference if the request is in the middle or the end of the year?  I know that after the one CC is paid down and when that collection falls off in March my FICO should rise.  Should I just wait until then? 

[SCF]

Honestly, there are FICO High Achievers who just have one or two CCs like you, so part of this is what you feel most comfortable with.  If you don't have any baddies other than the two collection accounts, you should have no trouble getting a store card whenever you want, I would time it so your 10% off or whatever goodie is most useful to you, especially if you have a big purchase coming up.  In terms of another CC if you want one, you could definitely wait until March, see what comes of getting rid of your other collections and then apply for a nice card from Chase, BofA or another prime lender.

A good thing at this point might be to use the pre-approval tool at BofA to see if they have any offers for you, that will give you a sense of what you qualify for now in terms of prime cards.

[Anonymous]

Your on the right track. Pay down your balances so you can have a good debt to credit ratio. I would probably hold off on applying for a new account until the collection account falls of your report in March. Having a store card (consumer charge account) would be a plus to your mix of credit. Keep in mind though, mix of credit only counts for 10% of your fico score. When I applied for my first store card a couple months ago, I lost 38 points. But I gained 24 points after paying off my 1st personal loan the following month. So something you might want to consider before apping for a store card. But honestly, I don't think you need more credit accounts except a CLI at this time. Only apply for credit if your truly need it. Your in good hands now. Let your CC's grow with you and age! Good luck!

[haulingthescoreup]

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sycotik wrote:

  I have read this forum for about 4 hours now looking over everything I can.  I am sure I have a lot more reading to do.  But, from what I have read so far I want to make sure I am on the right track.  I just pulled my EX score and I am at 652 (I will use myfico starting next month)...

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Just to clarify, if you got your "score" from EX (Experian), this is a FAKO score, and your real FICO score might be higher or lower.

We've kinda made up our own abbreviations here:

EQ - Equifax
TU = Transunion
EX = Experian

[sycotik]

I pulled it before I found this forum.  The score is what got me searching and what led me to here.  I will probably wait until mid to late Jan before I sign up for the Myfico product.  I want to get the CC paid down before I check it again.  But thanks for the heads up.  I have learned alot from here and I am sure I will learn more.  The abbreviations is what I have to learn.  I have to keep 2 pages open on the forum.  One for searching and the other is the abbreviations page LOL.

[sycotik]

Well, I went ahead and got the SW from this site.  I decided that I would rather be updated as the score changes instead of waiting until it was paid.  It came up as the same score (652) so no difference there.  I should have all of that paid down by the second week in Jan.  I am also going to wait until March when the collection comes off before I apply for anything else (even a store card). 

  I cant really think of anything else I can do except keep the balance low on the cards and pay on time.  Is there anything else that I can be proactive about until March?