Help for a Credit Noob

[Tuck831]

Hey everyone, hopefully I don't get blasted for posting this redundant thread. I'm self taught when it comes to my credit score. I've skimmed through some threads here, and combined with what I've read in other places, along with Credit Karma/Sesame, it gets overwhelming very quickly.

I'm not sure where to start or what info is most valuable, but like everyone else, I am trying to boost my credit score as quickly as possible.

I started working on things about six months ago, and until then, my score has floated around 500-520 for years. Things were left out of sight, out of mind, and I never considered working on my credit, let alone needing it.

As of about a week ago, my FICO score is 662. Credit Karma shows my Transunion score at 646 and Equifax at 655 as of 1/14.

Lately, more noticable than before, I've been getting a ton of pre-qualified letters from Capital One and USAA for new credit cards. Currently, I only have two open accounts...a secured Discover card, six months old with a $500 limit that's used and paid in full each month, and a $5500 jewelry account that was used once and paid in full. Total credit utilization stays under 10%.

I have two derogatory remarks on my credit from years ago that are both under dispute.

Any advice on a solid move to make?

[Anonymous]

First, pull your reports from www.annualcreditreport.com - you get a feee pull every 12 months. Then go to www.creditchecktotal.com and pay $1 for a seven-day trial to get your three FICO scores. All sources of Experian scores that I’ve found will provide your FICO score but sites like CK that provide Transunion and Equifax give you the VantageScore 3.0 model score, which is different from FICO and not generally used by lenders. Once you have your scores, cancel the trial to avoid being auto-enrolled in a $30/month subscription.

With this info in hand, post up your good accounts with limit, usage, and age, as well as your derogatory entries including their balance, limit, account owner, and date of first delinquency (DoFD, found on your reports). Finally, provide your scores for each bureau.

With this info, we can advise you on what to tackle first if there is a reason to go after one derog first in particular.

As for new accounts, you could likely use one of the companies that is mailing you to help continue rebuilding. The minimum optimal credit mix to boost your score is three revolving accounts and one installment account (which we can discuss as well).

Looking forward to a follow up on here so we can get you pointed in the right direction, and welcome to the forums - you are absolutely in the right place to get back on track and rebuilt better than ever

[Tuck831]

Thanks for the reply!

So, here's all of the info you mentioned...

Good Accounts:

Discover Fin Svcs LLC. $500 limit (secured, revolving). 36% Usage, paid in full monthly. Age - 6mo

Majr Financial Corpora (Jewelry Acct). $5000 limit, revolving charge acct. 0% Usage. Age - 6mo

Derogatory:

R&R Professional Recovery. $93 balance. Collection. DoFD 11/1/18

Transworld System Inc. $762 balance. Collection. DoFD 11/1/18

Scores (CreditCheckTotal):

TransUnion - 624

Experian - 624

Equifax - 635

FICO - NASAFCU shows a score of 662 based on Experian data as of 12/14/19.

            Discover shows a score of 614 based on TransUnion data as of 1/10/20

Also, while fetching my FICO scores, I noticed on the Experian app, it lists:

FICO Score 2 - 664

FICO Auto Score 8 - 612

FICO Auto Score 2 - 637

FICO Bankcard Score 8 - 634

FICO Bankcard Score 3 - 668

FICO Bankcard Score 2 - 685

What do these numbers mean?

I've gotten "pre-selected" credit card offers from USAA (Preferred Cash Rewards Visa Signature credit card); a "pre-qualified" offer from Capital One (Platinum Mastercard); and "pre-approved" offer from Credit One Bank (Platinum Visa card). I'd like to apply for one of these but don't want to take a negative hit if I'm denied. I don't know enough to make an educated decision based off of my credit file.

Also, to my understanding, I'm eligible for a refund of my secured deposit for my Discover card after 6 months. Being that I'm now at the 6 month mark, is this something I need to ask for or should I just expect a check or credit? I've also read that I could request a credit line increase...I don't know where to begin.

Thank you for your help!! Your response is very much appreciated!

[Anonymous]

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@Tuck831 wrote:

Thanks for the reply!

So, here's all of the info you mentioned...

Good Accounts:

Discover Fin Svcs LLC. $500 limit (secured, revolving). 36% Usage, paid in full monthly. Age - 6mo

Leave a small balance of maybe $15-20 or so on the card to report. Once the next statement cuts, pay that off. Then use the card normally and repeat at the end of the statement period. If you allow no balances to report, you take a 10ish point penalty on your scores. Doing it this way will give you those points but still allow you to pay no interest.

Majr Financial Corpora (Jewelry Acct). $5000 limit, revolving charge acct. 0% Usage. Age - 6mo

Derogatory:

R&R Professional Recovery. $93 balance. Collection. DoFD 11/1/18

Transworld System Inc. $762 balance. Collection. DoFD 11/1/18

Search for these CA names on the forum along with "PFD" in the search to see if they're known for a willingness to delete upon payment. If so, ask for this when you call, so that once they're paid, they'll delete their entries on your reports.

Scores (CreditCheckTotal):

TransUnion - 624

Experian - 624

Equifax - 635

FICO - NASAFCU shows a score of 662 based on Experian data as of 12/14/19.

            Discover shows a score of 614 based on TransUnion data as of 1/10/20

Also, while fetching my FICO scores, I noticed on the Experian app, it lists:

FICO Score 2 - 664

FICO Auto Score 8 - 612

FICO Auto Score 2 - 637

FICO Bankcard Score 8 - 634

FICO Bankcard Score 3 - 668

FICO Bankcard Score 2 - 685

What do these numbers mean?

There are 28 different versions of FICO scores, optimized for various things like cards, auto loans, mortgages, etc. They weigh different factors of your profile differently which accounts for the score differences. Additionally some lenders have their own unique internal scores, and you may be seeing some of those. Most lenders use FICO8, aka Classic FICO.

I've gotten "pre-selected" credit card offers from USAA (Preferred Cash Rewards Visa Signature credit card); a "pre-qualified" offer from Capital One (Platinum Mastercard); and "pre-approved" offer from Credit One Bank (Platinum Visa card). I'd like to apply for one of these but don't want to take a negative hit if I'm denied. I don't know enough to make an educated decision based off of my credit file.

Preselected and prequalified are marketing and only indicate that your profile meets certain general thresholds they look for in a potential customer. Results can go either way. Preapproved means you meet all requirements and is essentially a firm offer of credit. If you apply, unless some change happens to your reports between them preapproving you and you applying, they are legally required to extend credit.

Also, to my understanding, I'm eligible for a refund of my secured deposit for my Discover card after 6 months. Being that I'm now at the 6 month mark, is this something I need to ask for or should I just expect a check or credit? I've also read that I could request a credit line increase...I don't know where to begin.

What you've read is that Disco can unsecure after seven statements, but it's at their discretion, not by request. It's pretty common that they do this. When they do, they'll refund your deposit via check and often will increase your credit line. If it doesn't happen after seven months, keep treating the card and your other accounts well and you'll get there. If it doesn't happen automatically, call and ask after the seventh statement closes and the CSR may be able to tell you more.

Thank you for your help!! Your response is very much appreciated!

Happy to help - it's why we are all here. A note regarding Credit One - I would avoid them. You already have Discover so you're beyond needing them. They're predatory and you can do and are doing better. check prequalification each month for Amex, Capital One, and Citi, and when something comes up, you can decide if you want to take it. Those are all solid and non-predatory lenders and you can do very well with any of them.

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[Anonymous]

Excellent advice above. Just be aware capital one is going to pull all three reports whereas most lenders only pull one. At least as far as hard inquiries are concerned.

[AllZero]

Are you a member of USAA?

I'm guessing you have military affiliation directly or through immediate family members? Are you a member of Navy Federal Credit Union?

[AllZero]

@Tuck831  Welcome to the forum.

[Tuck831]

Thank you.  I'm searching now to see if those creditors remove their entries upon payment.

I guess I'll hang tight on trying to open another card. Maybe try to get these entries removed first and allow my score to bump up some.

I am a USAA member through my father who is now retired from the Army. I was actually looking to open an account with PenFed, thinking that it would be beneficial later to apply for a card or loan from them. Should I look into Navy Federal instead? Any advantages/disadvantages to either?

[Anonymous]

Navy is widely loved here for their penchant for giving absurdly high credit limits far beyond what many people's scores would suggest (as in getting a $20k card with a 600 score, that kind of thing). There are a lot of testimonials to their terrific products and services as well, and are a go-to choice for dozens of very active credit-hounds here.

[CreditInspired]

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@Tuck831 wrote:

Thank you.  I'm searching now to see if those creditors remove their entries upon payment.

I guess I'll hang tight on trying to open another card. Maybe try to get these entries removed first and allow my score to bump up some.

I am a USAA member through my father who is now retired from the Army. I was actually looking to open an account with PenFed, thinking that it would be beneficial later to apply for a card or loan from them. Should I look into Navy Federal instead? Any advantages/disadvantages to either?

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Hi and welcome to myFICO

IMHO forget PenFed and join NFCU yesterday. I promise you--You wont regret it! NFCU has great customer service and great products.