prisoner of my own mistakes

[Anonymous]

I have only ever had one credit card. It was a Gold Card from Bank of America with a $1500 limit in 2005. I had the card for 2 months before I was unable to pay it. Did not pay it for over 120 days, it went to collection. Paid the collection agency $400-600 a month until it was paid (paid it off in early 2006). In June of 2006 I bought my credit report from freecreditreport.com (yes, I now know that it was a waste of my money, but it was all I knew about at the time. I know better now.) The scores from that report are below.

EXP 578
EQU 578
TU 587

I am now 25 years old and can't even get a Macy's card (it was the first card I've applied for in over a year, letter should be here any day now.)

My question is where do I go from here? I'm worried about wasting my time applying for more cards and lowering my score. I'm even worried that purchasing a report from myfico.com is going to do damage.

Where do I go? I'm in my mid-twenties and feel like my financial future is over.

[llecs]

Don't dispair.

Figure out where you are at score & credit-wise. I'd order all three reports via MyFico. It's less than $38 with a discount. Next, figure out what you can repair. Dispute and send DVs, PFDs, and GWs as necessary. On that alone, without new CCs, my score went up over 100 points. Then based on your scores, selectively apply for 2-3 new CCs, assuming you don't have anything now. Get secured cards if necessary. Then with time, over the next year or so, you'll see a rise in scores.

But read these forums first!

[Anonymous]

There's a 25% off coupon for myfico, so if you're willing to pay the $30+ then I would recommend getting all three of your scores as a first step. Once you know the scores, you'll know whether you can get an unsecured card or if you'll need to start with a secured card. If you don't want to spend the $30, then I'd recommend getting a copy of the free credit reports and posting the contents here so that we can see what you have reporting.

[Anonymous]

Pull your score and reports from MyFICO-

Pulling your own report DOES NOT AFFECT YOUR SCORE

[SmartCookie]

welcome lessinlearned and please start here:   http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

Those scores are FAKO scores which means they are really only useful for your own personal idea of where your FICOs may be.

Pulling your reports and scores at myfico.com is a great idea, especially now.  There is a 25% off code on the main page... get yourself hooked up with the Suze Orman Plat kit with that code.  You'll get all you need to get started.  Pulling your own reports does no damage in this instance... it does not affect scores or anything at all.

You need to write a GW letter to the CA that is probably reporting that paid collection.  One to BoA as well.  But lets see where your FICOs and other major notables are to see what else you need to do before apping for a new card.

BoA might also be inclined to GW remove the derog info if you open a checking and savings account with them.  You might also read on their 99/500 card as that would be good for many reasons.  Much to learn here, and time well spent. 

[Anonymous]

YYour financial future is far from over. You could have 10 derog's but you only have one.

I agree with the others get your FICO scores and reports first and know your real score. After you get that try to start on working removing negative information.

If you just have to app for a card try www.whogavemecredit.com and put your scores in to see which ones work for you.

I would try to repair whatever damage is done to your credit reports before you start app'ing for CC's tho. Good Luck!

[Anonymous]

Wow, I'm overwhelmed by the response. I wish I had come to this site months ago, I will order the reports by this weekend.

llecs: I will have to research your abbreviations and find out what I can dispute...is secured card the same as prepaid?

SanFranMatt: I'd be more than happy to post the report (private info aside of course), thanks :c)

Timothy: I did not know that, thats one of the things that I was confused about.

SmartCookie: I will read that link tonight when i get home. I think I still have a BOA account open (its had $1 in it for a year or two)

jaybee: I dont so much "want" a card as I need an easy way to repair my credit (as compared to doing something drastic, like buying a car with a huge down payment)


Thank You Everyone! I'll definitely keep everyone updated.

[Anonymous]

Your key to recovery is to get 2 to 3 credit card accounts (doesn't matter if they're secured), and keep your balances low (but above zero), and payments on time.

A collection isn't the end of the world. They do decay over time. People tend to overestimate the long-term impact of a collection, because they don't obtain good credit to balance out the bad. If your credit history ends with a collection, then yes, your scores will remain low for a long time.

I had four collections totaling less than $1000, and my score was tanked into the low 500s. I said to heck with it, didn't get any more lines of credit because of annual fees and rejections for the higher-end cards. My score kept right on sucking in the low to midd 500s for over a year.

Then I got the BofA 99/500 card, kept it in good standing, and after I'd had the account three months, my score started going up 5 to 7 points a month. Once I improve my cash flow situation and get my utilization down, I'll probably be teasing 700.

[llecs]

Lessinlearned-

Secured is not the same as prepaid. Secured is where you deposit money with the creditor and they issue you a CC (secured against that deposit). So, if you deposit $500, you get a shiny new CC for $500. Not everyone offers this and you still have to apply for a secured card. I do have a partially secured card via Orchard Bank where I deposited $500 and received $600 in credit. Bank of America offers a traditional secured cards, but they often offer another secured card where you deposit $99 and receive $500 in credit, if you are denied for an unsecured CC. I know Merrick, Wells Fargo, National City, US Bank, and WaMu also offer secured cards. Some secured cards refund your deposit and will graduate you to a regular CC. Prepaid cards are nothing to get excited about. Unlike secured cards, they don't help your credit score.

Message Edited by llecs on 11-20-2007 01:01 PM

[Anonymous]

I'm beginning to think that this is the card that I had. I applied for a regular card, waas declined and they gave me the Gold Card as a "counter offer". It had a $60 fee, and like I said, a $1500 limit. Does that sound like a secured card?