Help! to open another credit card or not?

[Anonymous]

My DH credit is kind of new but not great which is why I'm here hoping someone can give me direction. His very first trade line was with toyota about 7 years ago and the account was charged off when he was down to the last few payments. His accnt status states: acct charged off/past due 30 days. $16 written off. However the recent balance as of 6/2004 says $873. Regardless of what it is we want to pay it (we need the pink slip) but would also like for the account to get adjusted if possible because if they were to delete it (not that they would even consider) but wouldn't that just finish killing off the hopes of a better score because its his oldest account? I'm hoping a GW letter will do the trick but we'll see. DH also has another account with Toyota that was repo'd but paid off dated 2004 - Not sure what to do with this one, any ideas? Here we are in 2008 and now we are preparing to buy a house around Jan-Mar 2009 time frame. Currently he has 2 other installment loans with Chase Manhattan which are in very good shape and a credit card that is maxed out but never late - these are all open accounts in good standing, notice it's only 3 accounts! There are about 3 collections that we are working on DV'ing and then send PFD as well as a GW letter. His average score is 590.

We are trying to get to at least 720 within 7 months I don't even know if this is realistic but I was wondering if opening more credit cards for him would be the right thing to help increase his score (since we have 7 months to help the score get back up after taking an initial hit) besides taking care of the collections and paying down/off the CC. I was thinking of opening store cards but I don't know if that's the right thing to do in conjuction with all the other stuff mentioned above. Obviously paying down the credit card is top priority but I really need help on strategy here.

1. pay off credit card

2. dispute, pfd, gw, - collection accounts

3. open new credit cards

4. sit and do nothing like we have been for the last few years - NOT!!! 

Would appreciate direction very much! Thank you for any help provided!

[Anonymous]

The problem you have is inqs. They hurt for 12 months. With only 1 cc I say yes but I'd get a secured card from a major bank not a fee card. I wouldn't want to risk loosing an inq and not being approved. This is tough. With the installments you have history with payments. But only 1 cc is tough. I like to see a minimum of 3 CCs.

This is just my opinion and don't know the out come. I would get a total of 3 CCs on the credit report. Maybe adding your CCs as AUs to his account. But if not get 2 secured cards. Stop at 3. I'd get Visa/MC not store cards. Make them count the most.

Right now he has all open account with balances..... bad. Getting the extra CCs will help if left at $0 bal but reporting activity. So use them but pay them in FULL before he closing date to report to CR with $0 bal.

That one maxed out CC is killing your score. Only CC so 100% of revolving accounts, and is also maxed.... ouch.

I am guessing that the addition of the 2 new credit cards (total of 3) will about equal the loss for the inqs in 7 months. If you waited 12 months with out applying anywhere your score might be 12-30 points higer plus paying down your debt will only add to that. So with that I'd apply for 2 more CCs to have a total of 3.

NOW if you already have closed CCs on the CR you don't have to apply for more. Minimum of 3 open/closed combined. But I still like 3 open. If you had 12 months I say open more CCs to make 3 total even if you had other CCs closed.

[Anonymous]

Thanks Ilovepizza!

I have more than enough revolving credit history on my CR and 2 (Visa & MC) that I can actually add him as an AU if it will help him. I'd rather do this than have him apply for additional cards that will lower his score. Do you think this will work as far as the revolving history that he needs? Once i add him as an authorized user will they automatically get added on his CR?

I have another question: I have a collection on my report from progressive management. In fact I had several and all but 2 have fallen off my CR. My question is, if I send them a DV or even a PFD will they ask me about all those other medical collections? Will my letters trigger more trouble than it may actually help?

Thanks Ilovepizza or anyone else who can help!

[Anonymous]

His very first trade line was with toyota about 7 years ago and the account was charged off when he was down to the last few payments. His accnt status states: acct charged off/past due 30 days. $16 written off. However the recent balance as of 6/2004 says $873.

This will drop from his CR 7-7.5 years from DOFD/DOLA.....not date COd           Is this being reported by the OC?

Toyota that was repo'd but paid off dated 2004

     again it will drop from DOFD    you can send GW letters

Scores go by longest history......adv age of history. CC (revolving) 35%  and installment only 10% of your scores!!!

Having 1 CC that is maxed out hurts bigtime!   Pay it off.

scores for CC uses  total CI v total UTIL..  FICO likes to see total UTIL under 9% and some CC with a Bal $0

I would try to get 2 more CC  even if they are secured.

IMO  mortgage companies like to see NO unpaid collections or COs. Anything owed on a CC or other loans works against you for D/R.  They do not like to see a lot of ings.

For more about mortgage....check out the mortgage thread

[Anonymous]

What will yield better and faster score results in terms of helping DH's revolving credit history: Apply for secured cards or add him as an AU on my cards? Will my payment history transfer to his CR?

Sorry for all these questions...I'm still learning.

Thanks!

[Anonymous]

Yes, adding AUs on to his CR would definitely help! Not sure about collections.