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First post here and wondering if I'm doing the right thing...

joesef
Regular Contributor

First post here and wondering if I'm doing the right thing...

Two years ago I got laid off and my score sank to 380. Kept my car payment going but my cards didn't get paid and they closed. All collections are paid off. Embarrasing I know but now I'm sitting at 650. I have a Capital One with a cl of 750 and a Indigo Visa at 300. Total owed is 27.00. I plan on buying a home next year and figured I needed more open accounts and plan on putting very little money on new cards and pay off when due just to show I can manage credit.

 

I got approved today for a Target (300) Kohls (300) Pier 1 (1000) and HSN (1000). I know this will ding my credit but I figure a year from now they won't hurt as bad. My goal is to break into the 700's. Was I wrong to go after this many cards in such a short period? I do have a car payment that I owe 9,000 on which will be paid off in August. Does 700 look realistic by this time next year with no missed payments and low utilization? Thanks!

Message 1 of 13
12 REPLIES 12
Bella007
Senior Contributor

Re: First post here and wondering if I'm doing the right thing...

Welcome, joesef! 

 

You really don't need more than 3 credit cards, but what you do need is "credit mix." FICO scoring takes that into account, so opening a share secured loan will help you out.

 

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

 

Almost forgot to add that if you have a student loan, you already have an installment loan for credit mix. Auto loans work too so, if you have either of those, you're already set.

 

Smiley Happy

Current Scores: EQ 679;TU 647; EX 679 Gardening since 11/7/18
Beginning Scores-- EQ 632; TU 576; EX 619 FICO 08 (06/13/16) - BK7 discharged 11/2015
Message 2 of 13
joesef
Regular Contributor

Re: First post here and wondering if I'm doing the right thing...

Thank you for the welcome!

 

I do have a mix on my credit profile. I should have mentioned that but a paid off car with my ex wife. Never late. A paid off loan which did go to collections but zero balance now. But now just credit cards and my car loan. I'm just so set on getting to the 700's by next year this time. I hope this turns out well. Smiley Happy

Message 3 of 13
Bella007
Senior Contributor

Re: First post here and wondering if I'm doing the right thing...

Awesome! I'm sure if you just watch your utilization and PIF each month, you scores are going to go up, up, up! 

Current Scores: EQ 679;TU 647; EX 679 Gardening since 11/7/18
Beginning Scores-- EQ 632; TU 576; EX 619 FICO 08 (06/13/16) - BK7 discharged 11/2015
Message 4 of 13
SouthJamaica
Super Contributor

Re: First post here and wondering if I'm doing the right thing...


@joesef wrote:

Two years ago I got laid off and my score sank to 380. Kept my car payment going but my cards didn't get paid and they closed. All collections are paid off. Embarrasing I know but now I'm sitting at 650. I have a Capital One with a cl of 750 and a Indigo Visa at 300. Total owed is 27.00. I plan on buying a home next year and figured I needed more open accounts and plan on putting very little money on new cards and pay off when due just to show I can manage credit.

 

I got approved today for a Target (300) Kohls (300) Pier 1 (1000) and HSN (1000). I know this will ding my credit but I figure a year from now they won't hurt as bad. My goal is to break into the 700's. Was I wrong to go after this many cards in such a short period? I do have a car payment that I owe 9,000 on which will be paid off in August. Does 700 look realistic by this time next year with no missed payments and low utilization? Thanks!


1. Congratulations on the good progress you've made.

2. Welcome to the forum.

3. Be careful about paying the car loan down to zero. What happens is, when your installment loans get down to 9% of their original loan amount, you get a score boost, but when you get down to zero you get a score drop in some of the FICO models.

4. It's not totally great that you got the store cards, but it's not terrible either. Your plan of putting very little money on the cards, and paying them off is good, but be sure to pay them down before the statement reports too: (a) make sure less than half report a balance on the statement, (b) make sure no card reports more than 29%, (c) make sure your cards overall report less than 10% utilization.


Total revolving limits 663000 (585000 reporting) FICO 8: EQ 716 TU 747 EX 713

Message 5 of 13
Bella007
Senior Contributor

Re: First post here and wondering if I'm doing the right thing...


@SouthJamaica wrote:

@joesef wrote:

Two years ago I got laid off and my score sank to 380. Kept my car payment going but my cards didn't get paid and they closed. All collections are paid off. Embarrasing I know but now I'm sitting at 650. I have a Capital One with a cl of 750 and a Indigo Visa at 300. Total owed is 27.00. I plan on buying a home next year and figured I needed more open accounts and plan on putting very little money on new cards and pay off when due just to show I can manage credit.

 

I got approved today for a Target (300) Kohls (300) Pier 1 (1000) and HSN (1000). I know this will ding my credit but I figure a year from now they won't hurt as bad. My goal is to break into the 700's. Was I wrong to go after this many cards in such a short period? I do have a car payment that I owe 9,000 on which will be paid off in August. Does 700 look realistic by this time next year with no missed payments and low utilization? Thanks!


1. Congratulations on the good progress you've made.

2. Welcome to the forum.

3. Be careful about paying the car loan down to zero. What happens is, when your installment loans get down to 9% of their original loan amount, you get a score boost, but when you get down to zero you get a score drop in some of the FICO models.

4. It's not totally great that you got the store cards, but it's not terrible either. Your plan of putting very little money on the cards, and paying them off is good, but be sure to pay them down before the statement reports too: (a) make sure less than half report a balance on the statement, (b) make sure no card reports more than 29%, (c) make sure your cards overall report less than 10% utilization.


Great advice, SJ! Smiley Happy

Current Scores: EQ 679;TU 647; EX 679 Gardening since 11/7/18
Beginning Scores-- EQ 632; TU 576; EX 619 FICO 08 (06/13/16) - BK7 discharged 11/2015
Message 6 of 13
joesef
Regular Contributor

Re: First post here and wondering if I'm doing the right thing...

1) Thank you!

2) Thank you again. I wil learn lots on here from people like yourself. Smiley Happy

3) My plan is to pay the car off about 8 months early because I still need to buy some things for my house when I buy. I don't have alot and didn't take alot from my divorce. And I figured since that expensive car payment is out of the way I can free up money to buy what I still need, Should I take it down as low as I can go but not close it as I'm going through the process of buying a home? Leave a 1000 on it or something?

4) I plan on putting like 20.00 on each card and paying off when the bill comes just to show that I can borrow money and pay off on time with low utilization. I figured that would help me. I don't plan on running any card up, this is strictly a credit building process to hopefully get me to my 700 score that I want.

Message 7 of 13
RobertEG
Legendary Contributor

Re: First post here and wondering if I'm doing the right thing...

I would first focus on the highest-weighted category, Payment History, and attempt to remove major derogs.

What are the major derogs that are still showing, how old are they, and do the accounts remain delinquent?

Message 8 of 13
joesef
Regular Contributor

Re: First post here and wondering if I'm doing the right thing...

My derogs are late payments from when I got laid off and went to collections a couple years ago.. But they all have a zero balance now. I paid them all off in full but it stinks to still see them on there. I can't dispute them becuase they were in fact mine but a couple did get removed by the collection agency when I paid them. The other collection agency would not remove them.  I guess I just have to live with those being on there for a few more years unless there is a way to get them off because they are paid in full.

Message 9 of 13
SouthJamaica
Super Contributor

Re: First post here and wondering if I'm doing the right thing...


@Bella007 wrote:

@SouthJamaica wrote:

@joesef wrote:

Two years ago I got laid off and my score sank to 380. Kept my car payment going but my cards didn't get paid and they closed. All collections are paid off. Embarrasing I know but now I'm sitting at 650. I have a Capital One with a cl of 750 and a Indigo Visa at 300. Total owed is 27.00. I plan on buying a home next year and figured I needed more open accounts and plan on putting very little money on new cards and pay off when due just to show I can manage credit.

 

I got approved today for a Target (300) Kohls (300) Pier 1 (1000) and HSN (1000). I know this will ding my credit but I figure a year from now they won't hurt as bad. My goal is to break into the 700's. Was I wrong to go after this many cards in such a short period? I do have a car payment that I owe 9,000 on which will be paid off in August. Does 700 look realistic by this time next year with no missed payments and low utilization? Thanks!


1. Congratulations on the good progress you've made.

2. Welcome to the forum.

3. Be careful about paying the car loan down to zero. What happens is, when your installment loans get down to 9% of their original loan amount, you get a score boost, but when you get down to zero you get a score drop in some of the FICO models.

4. It's not totally great that you got the store cards, but it's not terrible either. Your plan of putting very little money on the cards, and paying them off is good, but be sure to pay them down before the statement reports too: (a) make sure less than half report a balance on the statement, (b) make sure no card reports more than 29%, (c) make sure your cards overall report less than 10% utilization.


Great advice, SJ! Smiley Happy


Thanks, Bella Smiley Happy


Total revolving limits 663000 (585000 reporting) FICO 8: EQ 716 TU 747 EX 713

Message 10 of 13
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