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Check my logic for rebuilding from scratch?

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Cookiegrabber
Regular Contributor

Check my logic for rebuilding from scratch?

So I have no score on TU or EX right now, and EQ popped up at 598 for the first time today on Credit Karma.

 

I have:

  • 1 Discover secured card coming in the mail
  • 1 DCU share secured loan, 91% paid <- this is what showed up on EQ
  • 2 INQ at EQ, 1 INQ at TU, not sure about EX since I just get errors there
  • Nothing else at all AFAIK, but many more INQs will come soon (read below)

 

I'm concerned about credit scores, but only because my first goal with the credit score is to set up a bunch of 0% B/T fee credit cards for when life takes a downturn (income loss). I have had downturns before where I'd end up in a credit rut to (barely) stay afloat, with high utilization on CCs, high APR on them as well as on personal loans. With just 1-2 CCs, obviously further credit became unobtainable.

 

So to create a more stable situation just in case the next time happens, I figure I'll first need to join a bunch of credit unions with the non-intro low-fee, low-APR cards I want. Of 27 potential CUs to join, I've already joined 3 and have membership applications pending at 8 others.

 

Anyway, here is what I'm wondering:

 

1) Should I just go all out and apply to another 10 CUs or so ASAP? I figure that the HPs will negatively impact my score while payments on the secured CC and installment loan (I plan to make another as the DCU one is short-term) will positively impact it, leaving me at some dismal score like 600-630 for the first year until the INQs no longer have effect. But my scores will probably bounce up after that.

 

2) If I am able to get a few unsecured cards that have a floor APR of 8.5% in the first year but am only granted them at 18% due to low scores, would the CUs accept requests for APR adjustment in 2 years or so (hopefully) when my scores are in the 700s?

 

3) After I stabilize my scores and the number of cards I have (like 15-20 cards?), maybe at Year 3 or 4, would it be reasonably easy to keep the accounts open?

 

Any opinions and partial input are welcome. I've juggled a few cards before, but never en masse. Thanks in advance!

 

EDIT: This is all assuming that I am able to keep like 1% utilization on these cards the whole time.


Starting Scores: No Scores (03/2018)
Current Scores: 779 - 789 (08/2023)
Goal Scores: 780 across the board

Current Total Credit Limit: $109,900 (08/2023)
Take the myFICO Fitness Challenge
Message 1 of 4
3 REPLIES 3
dynamicvb
Valued Contributor

Re: Check my logic for rebuilding from scratch?

Well I’m far from being an expert as I’m digging my way out of the hole I got in, but I’m having trouble following the goal. This sounds like you want a lot of available credit just in case you lose income. I personally would not take that approach. I would use the time while you have income to save up a rainy day fund and build enough credit to get scores up. Just my opinion and others may have other insight.

 

the Eleven Rules for rebuilding credit is a good read. http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/ABCD2199-s-Eleven-Rules-to-Credit-Rebuilding/...

 

 

Started Rebuild 4/2018: EX 616| TU 604| EQ 621

Current 5/28/20:


First Goal Score: 750+ Reached 3/2019

Next Goal all over 800
Message 2 of 4
Cookiegrabber
Regular Contributor

Re: Check my logic for rebuilding from scratch?

Hey, thanks for that link! I didn't know about the 3 cards to start or the AZEO method. That's good info to know.

 

Savings are great but can't be my only net, because the last time I got trapped in limbo/stuck in Korea where I don't have a job or home (insert harsh rant about DHS and Dept. of State here), I used all my savings plus $35k in debt to not go BK. Was sheer luck to get $25k of that as an 8% personal loan. CC debt is all paid for but there's still $20k in installments. Money goes out fast when you have 3 dependents.

 

So I'm definitely not trying to get the credit to live above my means. I just need a safety net that's sturdy enough not to drop me as soon as I fall in, which with 1-2 cards and a total CL of $10k -- you'll get dropped in a few months and have to go through many more problems than just making debt payments for some years. Last few times poop happened, I had a great credit score in Korea from years of sending money there to build it. I don't have that now.


Starting Scores: No Scores (03/2018)
Current Scores: 779 - 789 (08/2023)
Goal Scores: 780 across the board

Current Total Credit Limit: $109,900 (08/2023)
Take the myFICO Fitness Challenge
Message 3 of 4
shadanat
Frequent Contributor

Re: Check my logic for rebuilding from scratch?

I can tell you that Credit Karma is not a FICO score so your actual score may difffer.

10 credit unions seem to really be spreading yourself thin. I joined NFCU in 2014 and they have been great as far as giving me products when my scores were borderline and others said no. They still have helped me even after filing Chapter 7. I also have a membership with a smaller local CU because they often have great promotions on CDs and Money Market accounts. Take time to build the relationship.

You may be trying to rebuild too fast. It usually takes a year plus. I would say patience will be your best friend. The Discover Card will at some point graduate and that will probably be your best route to a higher credit limit.

Capital one also seems to be a great place for rebuilders and they sometimes offer decent SL. Or if they put you on the credit steps you start small and then have the potential to go big.

AZEO is very important in rebuilding. You will definitely see a boost in your credit score. You will also see a dip if it’s not followed.
Message 4 of 4
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