I have been lurking here on the forums for quite some time and only recently posted for the first time. The advice and experiences I have read here helped me immensely. My story is kind of a long one, but speaks to the importance of this forum.
I owned a small business during the Great Recession, and I was lucky enough to get out without any debt, but with late payments galore. I decided I would attend college for the first time shortly thereafter, at age 31. During my time in college, I just didn't use credit at all apart from student loans. No credit cards, no new car, no mortgage. I intentionally shunned all types of credit, thinking that eventually I'd start to rebuild once I had a stable career.
I am almost finished with a doctorate at this point, and a few years ago, I started a career I love in higher education. I also got married and started a family, so I have had a lot of life changes in the last few years. I decided last year that it was time to finally take a look at my credit reports, and it was kind of ugly, though not in the ways I expected.I started using Credit Karma and Experian, not realizing that CK didn't give "real" scores. However, it was a meaningful tool to help me see what needed to be addressed. The old stuff from the Great Recession had mostly fallen off. I had a charge-off from Verizon that shouldn't have been charged off, and two collections for medical bills that were reported by collection agencies even though one was not correct and the other was paid and I had never had contact with either of the collection agencies. In July of 2018, my EX score was 538. A few weeks after I first checked my score, we found out we were expecting our first child, which was not a surprise to us. I knew we wanted to be in a new home by the time the baby was born, so I set out to correct the incorrect things on my credit reports.
After a million calls and some disputes and digging out some old records, I was miraculously able to clear everything from my report except the Verizon collection and some six-year-old late payments on an auto loan. My wife and I have both banked with NC State Employees Credit Union, and we went there last fall to inquire about a mortgage. They wanted me to clear up the Verizon charge-off, but told me they'd be quite content if I could just settle it for less than the full balance. I was a little grumpy about it, because I had moved to a place Verizon didn't service during college and they agreed to let me out of my contract without the early termination fee, but charged it anyway, resulting in the charge-off. No amount of arguing would get them to honor their previous promise to waive the fee and erase the charge-off (and I realized by reading these forums just how often this happens and how unmoving Verizon is). Anyway, I paid them a couple hundred bucks, about 40% of the balance, and they settled. The Credit Union was happy, and we closed on our home on Jan. 11.
The Credit Union said they don't ever hold medical collections against members, but I was able to clear those up, too. Both physican practices acknowledged their errors (thank goodness I keep good records), and they had the collections expunged from my credit reports. Between settling with Verizon and getting the collections removed, my score improved substantially. The late car payments were approaching 7 years, and I was able to get EQ and TU to remove them early, but EX was stubborned and wouldn't remove them early. A few weeks ago, they finally aged and fell off.
Following advice gleaned from the forums, I started looking for cards that worked for me in order to start really rebuilding. I decided that I would follow the advice of applying only for cards that were useful rather than for any card for which I could be approved. I also decided I wanted to skip the cards aimed at those with bad credit if I could. My wife had a balance on one of her credit cards, and NCSECU gave us a jointly-held Visa with a $9,500 limit at 10% APR to transfer the balance from her high-interest card. NCSECU only has one APR for most all their loans. Either you qualify or you don't, but if you are in, the interest is the same no matter your score. They can do this with a low default rate because most of us who are members are state employees and most of us pay our loans via payroll deduction. Anyway, that was my first success after the mortgage approval, though it meant I started out with high utilization since we transferred a balance that ate up most of our credit limit. However, it saved us thousands in interest and we have steadily paid it down.
Our loan officer said that new credit wouldn't impact our closing since they pull credit only once at the time of application rather than again at closing (in our case anyway, since we didn't do an FHA loan). She said I could continue to apply for new credit, so long as I did so smartly. I started with a Lowe's store card, since I knew we'd use it once we closed on the new house. I was approved for a $3,500 limit (which I have since grown to $15k with the luv button). I also applied for an Amazon Prime store card because we buy things from Amazon almost every day. I was approved with a $2,900 SL (which I've grown to $3,500).
At this point, my TU score was inexplicably higher than all the others, so I wanted a Visa or MC from a lender that pulls TU. I tried for the Uber Visa, and was approved with a tiny SL of $500. I still can't get a CLI. In hindsight, I wish I had waited for another card, though it seems that this one sort of opened up the way for me. However, it's in the sock drawer because it's essentially useless for me now that I have cards with better rewards.
Following advice from the forums, I started looking at the pre-qualification sites for the major lenders. I really wanted an AMEX (even in my high-rolling days pre-recession, I never had one), and was excited when I was pre-approved for both the Delta Gold and the Everyday Cash. I applied for both, and was instantly approved, both with $1k SLs. I went for a 3x CLI on the Delta Gold at 61 days, but was declined because of lack of experience, which makes me wonder if I counted wrong and should try again. It is generally my daily driver, which means that I have to pay it off about once a week.
I have sort of been on an intentional and thoughtful app spree since the beginning of the year. I have only applied for cards that are useful. In addition to the Lowe's, Amazon Prime, Uber Visa, and the AMEX cards, I have also obtained the following:
BP Rewards Visa ($2,900 SL) - I have a long commute and have saved a boat-load with the SUB
Discover IT Card ($6,000 SL) - I got this one for the 0% SUB to finance the portion of our childbirth expenses the insurance company didn't pay
And, just this week, I fell out of the garden for the BB&T Spectrum Cash Rewards ($6,500 SL) card you nice people tempted me into, and the Hilton Honors Ascend card ($2k SL) I posted about yesterday.
Here are my current stats, via myFICO:
EQ: 715
TU: 756
EX: 729
Income: Just a touch over $100k
Inquiries: EQ: 3, TU: 7, EX: 5
Zero derogs
AAoA: EQ: 1y4m, TU: 1y7m, EX: 2y7m
Utilization is tricky since neither of the bureaus has a complete snapshot of all my accounts. NCSECU only reports to Equifax, so my mortgage only reports there (boo!) and my high-balance CC only reports there, too (yay!), but a couple of my other cards don't report there. Reporting is so strange. I generally PIF though, except a small balance on my Discover and the larger balance we transferred to NCSECU when we got the card.
I'm not sure how I feel about being in the garden, but at the moment, there isn't really anything I want and there's nothing I need. I have three good 0% APR cards with a long time left on the intro rate, and AMEX cards with rewards for the airline and hotel chain I frequent. We have a great mortgage rate, and neither of us needs a new car, so I'm pretty content to just coast, continue to reduce our utilization, and let my reports age. I suppose, at some point, I'd like to land one of the better rewards cards from Capital One or Citi. I'm pre-approved for everything AMEX offers currently, but I don't really know that I'd benefit from any of their cards I don't have apart from the rush of an approval.
I consider myself to be relatively financially savvy, but I realized when I began this journey that there's a distinct jargon associated with credit rebuilding. I learned that jargon here. Every app has come after an exhaustive reading of the posts here related to the card in question. It almost felt like I was able to see around corners. For that I'm pretty grateful, and I hope that I can eventually serve as a provider of the same sage advice to lurkers that some of you have provided to me.
