Looking For Direction

[Anonymous]

Hi all, 

I'm new to the forum, and as the subject states, I'm looking for some help with what to do next. (Apologies in advance for the somewhat long post)

Long story short: I went to college for a semester, took out a couple of student loans to secure housing, then dropped out after getting an internship that ultimately transitioned into an apprenticeship. From 2009-2020, those loans were the only thing on my CR. Ignorant about the importance of credit, they fell into collections. In May of this year, I settled and paid after talking my debt down from $8k to $2k, assuming it would boost my credit score.

The Good: All my past derogatory marks throughout the years switched from late to current.

The Bad: The month I paid the debt now has a collections mark, though it is labeled as paid. So I'm assuming that means it's a paid collection.

Current Credit Scores Based on FICO 8: EQ 714 | EX 653 | TU 682

Current Open CC Accounts: NFCU cashRewards Visa: $2,000 | Cap1 Platinum Secured: $500

Closed CC Accounts: NFCU AU: $10,000 | AMEX AU: $15,000 | DISC: $200 secured (closed due to inactivity before I even got my card). Before accounts were closed, all never had a late nor missed payment.

AAoA: 1 Year

Current Open Installments: CreditStrong $975 balance from $1000 start | Self Lender $403 balance from $520 start

I've had 4 inquiries in the past 2 years, the most recent being March 2021.

What I'm trying to accomplish: I'd like to get more cards and increase my overall CL. I have good spending habits and only spend what I can pay back. Neither my cards nor the open installments have ever been late or had a payment missed. Current utilization is 1% on the Cap1 card and 0% on the NFCU one. I've been reading that NFCU is good for a CLI, but they just graduated my secured card a couple of months back, so I'm waiting some months before attempting that.

My confusion is the fact that I'm not sure what to do next. Should I apply for more cards? Should my sister, who has excellent credit, older credit history, and <5% UTIL, add me as an AU to add some history to my account before applying for those cards? With the collection on my report being in May 2021, should I be Gardening for some months before applying for anything? 

Any help, guidance, instructions, etc., would be greatly appreciated.

[FireMedic1]

The collections will haunt you for a while. Least they're paid. I know some will lose thir minds when i say this. Try Cap1's pre-qual site and try and get a unsecured card. No QS1. They are great to get things going for your own revovling credit. AU's isnt a quick fix. Some lenders ignore them anyway. Then in 6 months. Give Disco pre-qual a shot. Little by little you can get there. Use your NFCU card more than the Cap card for a better shot at a CLI. Its baby steps for now. Isnt going to happen overnight. But in time you can get there. Welcome to the forums.

[Phana24]

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@Anonymous wrote:

Hi all, 

I'm new to the forum, and as the subject states, I'm looking for some help with what to do next. (Apologies in advance for the somewhat long post)

Long story short: I went to college for a semester, took out a couple of student loans to secure housing, then dropped out after getting an internship that ultimately transitioned into an apprenticeship. From 2009-2020, those loans were the only thing on my CR. Ignorant about the importance of credit, they fell into collections. In May of this year, I settled and paid after talking my debt down from $8k to $2k, assuming it would boost my credit score.

The Good: All my past derogatory marks throughout the years switched from late to current.

The Bad: The month I paid the debt now has a collections mark, though it is labeled as paid. So I'm assuming that means it's a paid collection.

Current Credit Scores Based on FICO 8: EQ 714 | EX 653 | TU 682

Current Open CC Accounts: NFCU cashRewards Visa: $2,000 | Cap1 Platinum Secured: $500

Closed CC Accounts: NFCU AU: $10,000 | AMEX AU: $15,000 | DISC: $200 secured (closed due to inactivity before I even got my card). Before accounts were closed, all never had a late nor missed payment.

AAoA: 1 Year

Current Open Installments: CreditStrong $975 balance from $1000 start | Self Lender $403 balance from $520 start

I've had 4 inquiries in the past 2 years, the most recent being March 2021.

What I'm trying to accomplish: I'd like to get more cards and increase my overall CL. I have good spending habits and only spend what I can pay back. Neither my cards nor the open installments have ever been late or had a payment missed. Current utilization is 1% on the Cap1 card and 0% on the NFCU one. I've been reading that NFCU is good for a CLI, but they just graduated my secured card a couple of months back, so I'm waiting some months before attempting that.

My confusion is the fact that I'm not sure what to do next. Should I apply for more cards? Should my sister, who has excellent credit, older credit history, and <5% UTIL, add me as an AU to add some history to my account before applying for those cards? With the collection on my report being in May 2021, should I be Gardening for some months before applying for anything? 

Any help, guidance, instructions, etc., would be greatly appreciated.

---

IMHO, your problem right now is the EX 653.  Once you get over 670, your card selection will be easier.  How old are your open cards?  If one is less than a year, you might get a decent jump when your newest acct is over 1 yr.  It would be nice to add a good card, although I disagree w/ @FireMedic1 .  I would go for the Disc first since you already have a Cap One card.  I would also look into local credit unions that offer good cards, since having a good relationship with a solid CU is not only helpful for CCs, but will be invaluable if and when you need an auto loan, mortgage, etc.  I believe once that collection hits a year, you'll also pick up some needed points.  With three cards, you can play the AZEO game easily, which will help to build your score.  After that, once your credit score is solidly in the good(670+) range, you'll start to receive some offers for cards.  As you progress into the 700s, you will find better offers(SUBs, BTOs, etc).  Follow the forums on credit cards, and decide what cards are best for your spending patterns and apply accordingly.  Don't make the mistake I did and grab and every offer just to raise my CL.  Use your inquiries sparingly and where you have a high probability of success.  FWIW, I've had good success with EX's credit match system.  If CM gave me or the wife 94% or higher we're 7-for-7 on approvals.  CK isn't bad as well, we're 6-for-6 on outstanding and 2-for-3 on excellent.

[SouthJamaica]

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@Anonymous wrote:

Hi all, 

I'm new to the forum, and as the subject states, I'm looking for some help with what to do next. (Apologies in advance for the somewhat long post)

Long story short: I went to college for a semester, took out a couple of student loans to secure housing, then dropped out after getting an internship that ultimately transitioned into an apprenticeship. From 2009-2020, those loans were the only thing on my CR. Ignorant about the importance of credit, they fell into collections. In May of this year, I settled and paid after talking my debt down from $8k to $2k, assuming it would boost my credit score.

The Good: All my past derogatory marks throughout the years switched from late to current.

The Bad: The month I paid the debt now has a collections mark, though it is labeled as paid. So I'm assuming that means it's a paid collection.

Current Credit Scores Based on FICO 8: EQ 714 | EX 653 | TU 682

Current Open CC Accounts: NFCU cashRewards Visa: $2,000 | Cap1 Platinum Secured: $500

Closed CC Accounts: NFCU AU: $10,000 | AMEX AU: $15,000 | DISC: $200 secured (closed due to inactivity before I even got my card). Before accounts were closed, all never had a late nor missed payment.

AAoA: 1 Year

Current Open Installments: CreditStrong $975 balance from $1000 start | Self Lender $403 balance from $520 start

I've had 4 inquiries in the past 2 years, the most recent being March 2021.

What I'm trying to accomplish: I'd like to get more cards and increase my overall CL. I have good spending habits and only spend what I can pay back. Neither my cards nor the open installments have ever been late or had a payment missed. Current utilization is 1% on the Cap1 card and 0% on the NFCU one. I've been reading that NFCU is good for a CLI, but they just graduated my secured card a couple of months back, so I'm waiting some months before attempting that.

My confusion is the fact that I'm not sure what to do next. Should I apply for more cards? Should my sister, who has excellent credit, older credit history, and <5% UTIL, add me as an AU to add some history to my account before applying for those cards? With the collection on my report being in May 2021, should I be Gardening for some months before applying for anything? 

Any help, guidance, instructions, etc., would be greatly appreciated.

---

First pay your installment loans down, in the aggregate to 9% of the original loan amounts, but keep them open with the small balances.  I.e. get the total balances, between the 2 loans, to $136. When that reports to the credit bureaus, you should get a boost in your FICO 8's and 9's. That would be the window in which to apply for a CLI or a new card.

I use the word "window" advisedly, because once the loans are paid down to zero,  the points gained from that maneuver are then lost.

[Anonymous]

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@FireMedic1 wrote:

The collections will haunt you for a while. Least they're paid. I know some will lose thir minds when i say this. Try Cap1's pre-qual site and try and get a unsecured card. No QS1. They are great to get things going for your own revovling credit. AU's isnt a quick fix. Some lenders ignore them anyway. Then in 6 months. Give Disco pre-qual a shot. Little by little you can get there. Use your NFCU card more than the Cap card for a better shot at a CLI. Its baby steps for now. Isnt going to happen overnight. But in time you can get there. Welcome to the forums.

---

Thank you. I failed to mention that I have CU accounts open with PenFed, Alliant, and Northrop Grumman. Both PenFed and Alliant were opened in April 2021, Northrop was opened in 2005. Would it make more sense for me to try to get an unsecured card from one of them first as opposed to Cap1, or does that not matter? My Cap1 secured was opened in April 2021 as well.

[Anonymous]

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@Phana24 wrote:

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IMHO, your problem right now is the EX 653.  Once you get over 670, your card selection will be easier.  How old are your open cards?  If one is less than a year, you might get a decent jump when your newest acct is over 1 yr.  It would be nice to add a good card, although I disagree w/ @FireMedic1 .  I would go for the Disc first since you already have a Cap One card.  I would also look into local credit unions that offer good cards, since having a good relationship with a solid CU is not only helpful for CCs, but will be invaluable if and when you need an auto loan, mortgage, etc.  I believe once that collection hits a year, you'll also pick up some needed points.  With three cards, you can play the AZEO game easily, which will help to build your score.  After that, once your credit score is solidly in the good(670+) range, you'll start to receive some offers for cards.  As you progress into the 700s, you will find better offers(SUBs, BTOs, etc).  Follow the forums on credit cards, and decide what cards are best for your spending patterns and apply accordingly.  Don't make the mistake I did and grab and every offer just to raise my CL.  Use your inquiries sparingly and where you have a high probability of success.  FWIW, I've had good success with EX's credit match system.  If CM gave me or the wife 94% or higher we're 7-for-7 on approvals.  CK isn't bad as well, we're 6-for-6 on outstanding and 2-for-3 on excellent.

---

I appreciate your response. The NavyFed card turned 1 this month. The Cap1 card is 8 months old. I failed to mention that I have CU accounts open with PenFed, Alliant, and Northrop Grumman. PenFed and Alliant were opened in April 2021, Northrop was opened in 2005. Would you suggest I app for one of my CUs unsecured cards before Disc? I also discovered that PenFed and Alliant pull EQ and TU, with those being my two strongest scores, does that mean my chances for acceptance are a bit higher than Disc or Cap1, which usually pulls EX?

Also, thank you for the last bit in your response. Initially, I was going to jump on any offer to raise the CL. After reading your response and checking out the forum on Credit Cards, I see it's much better to pick and choose cards strategically, so I'm not stuck with a bunch of cards I won't do anything with.

[Anonymous]

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@SouthJamaica wrote:

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First pay your installment loans down, in the aggregate to 9% of the original loan amounts, but keep them open with the small balances.  I.e. get the total balances, between the 2 loans, to $136. When that reports to the credit bureaus, you should get a boost in your FICO 8's and 9's. That would be the window in which to apply for a CLI or a new card.

I use the word "window" advisedly, because once the loans are paid down to zero,  the points gained from that maneuver are then lost.

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This was gold for me! I was under the impression that I had to drag out the payments to add some history to my CR. Installment payments are due on the 5th, so I'll pay both down, leaving small balances to pay off over the next few months.

Then I'll use the information given to me from @FireMedic1 and @Phana24 to apply for a third card within the window before installments are paid down to zero.

Thank you all for the responses.

[OmarGB9]

Just wanted to chime in and say that Cap One does not only use EX. They actually pull ALL 3 bureaus. Discover may use any of the 3.

[Anonymous]

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@OmarGB9 wrote:

Just wanted to chime in and say that Cap One does not only use EX. They actually pull ALL 3 bureaus. Discover may use any of the 3.

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Thanks for that insight. Do you know if freezing one of the three would lower the chances of approval?

[SouthJamaica]

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@Anonymous wrote:

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@FireMedic1 wrote:

The collections will haunt you for a while. Least they're paid. I know some will lose thir minds when i say this. Try Cap1's pre-qual site and try and get a unsecured card. No QS1. They are great to get things going for your own revovling credit. AU's isnt a quick fix. Some lenders ignore them anyway. Then in 6 months. Give Disco pre-qual a shot. Little by little you can get there. Use your NFCU card more than the Cap card for a better shot at a CLI. Its baby steps for now. Isnt going to happen overnight. But in time you can get there. Welcome to the forums.

---

Thank you. I failed to mention that I have CU accounts open with PenFed, Alliant, and Northrop Grumman. Both PenFed and Alliant were opened in April 2021, Northrop was opened in 2005. Would it make more sense for me to try to get an unsecured card from one of them first as opposed to Cap1, or does that not matter? My Cap1 secured was opened in April 2021 as well.

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Absolutely they would be better than Capital One.