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Credit approval after collections?

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Credit approval after collections?

So I'm trying to get another card. Right now I'm stuck with a 300 limit on a credit one card and another 300 on indigo. My only saving grace is a 1000 limit on my petal card. My score is 687 TU. History is an avg of about 10 months, including student loans as old as almost 2 yrs and some recent. My oldest credit card is about 10 months, newest is 6 months. Payment history has been in full every month always, and on time. Utilization usually is about 25%. I have about 7 things in collections though. most are medical, about 4 $75 charges 1 for about $300. But I also have in collections 1 $250 account from a capital one card 5 yrs ago I defualted on paying. I'd pay this stuff off but really can't afford to as I recently took a pay cut, had my rent explode higher and am still crawling through school. Question is, capital ones website says I'm pre-qualified for the Quicksilver card, but I wonder if my previous collections account will knock me down when I apply. I have 2 hard pulls on TU, one on Equifax. I do not want to risk a hard pull and a rejection. So I'm basically looking for the best sure thing card I can get. Preferably a move up to a "real card" and away from indigo or credit one. Ideally, some form of rewards with little or no annual fee or other added in fees. Any help or suggestions is appreciated.
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Community Leader
Senior Contributor

Re: Credit approval after collections?

I wouldn’t apply for anything new right now. You said that you can’t afford to handle the collections or charge off and are having to carry a 25% balance due to funding, so going after another card and creating another monthly payment will be counterproductive at this point.

Can you make some cuts in other areas? Downgrade your phone plan, cancel TV/Netflix? Take on a roommate? Pick up a side gig like Uber/Lyft? There usually are ways to cut costs and boost income if you look hard at your situation.

Order of importance that I’d suggest is current accounts/funds>chargeoffs that update>collections.

Once you are able to do this and free up some cash, pay down your open cards into AZEO (search the forum for this - loads of info on it and it can net you some points on its own, plus by virtue of being in AZEO your usage will fall through a scoring threshold which is usually good for 10-15 points as well). After that, pay off that CapOne chargeoff as they typically update every month which keeps your score suppressed.

For the medicals, it’s usually very easy to have them removed. I believe if you search posts by @gdale6, he’s the one with the step by step outline on doing this. Clear them out and be done with them.

After all of this is done, THEN look into a prequal from Discover or Amex as you should be over a year AoOA by then. Get one of those and close Credot One. After another six months, get another and close Indigo. Careful usage in the meantime and going forward will set you up nicely.


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Message 2 of 4
Community Leader
Mega Contributor

Re: Credit approval after collections?

Hi and welcome to the forums 

 

I think at this point, you've exhausted non secured credit card options. There are a few that might approve, but between their annual fees, monthly fees, etc...you could actually pay off one of your larger collections or charge offs. 

If you opt for secured account, again, the deposit could be used to wipe some of your debt. 

This is not the right time for attempting to acquire the new cards and new debt. You need to take care of existing negatives before you move on. Even if add a new account, you still have negatives that are updating and wont see much progress if any until those are deleted/settled/paid. 

You cannot have a successful rebuild without cleaning up the previous mess. I would strongly suggest you get past the "I really cant afford to", because it will hold you down for a really long time. 

 

As far as medical collections go, here is the suggestion by gdale on how to handle those 

 

For unpaid medical debt that is reporting on your CR:

1. Call the OC and see if insurance can be billed, if not then
2. see if you qualify for Charity Care, if not then
3.  ask that they recall the collection in exchange for full payment
4. Send the reporting CA a PFD offer
5. Google the HIPAA Process and contact its creator for help

 

Message 3 of 4
Established Contributor

Re: Credit approval after collections?


@Dyerseve336 wrote:
So I'm trying to get another card. Right now I'm stuck with a 300 limit on a credit one card and another 300 on indigo. My only saving grace is a 1000 limit on my petal card. My score is 687 TU. History is an avg of about 10 months, including student loans as old as almost 2 yrs and some recent. My oldest credit card is about 10 months, newest is 6 months. Payment history has been in full every month always, and on time. Utilization usually is about 25%. I have about 7 things in collections though. most are medical, about 4 $75 charges 1 for about $300. But I also have in collections 1 $250 account from a capital one card 5 yrs ago I defualted on paying. I'd pay this stuff off but really can't afford to as I recently took a pay cut, had my rent explode higher and am still crawling through school. Question is, capital ones website says I'm pre-qualified for the Quicksilver card, but I wonder if my previous collections account will knock me down when I apply. I have 2 hard pulls on TU, one on Equifax. I do not want to risk a hard pull and a rejection. So I'm basically looking for the best sure thing card I can get. Preferably a move up to a "real card" and away from indigo or credit one. Ideally, some form of rewards with little or no annual fee or other added in fees. Any help or suggestions is appreciated.

With your current profile you won’t get any kind of good card, other than one with toy limits, until you clear up your baddies. You also need to let your current accounts age a bit. Work on clearing up your negatives and you’ll qualify for much better cards.



Starting Score: Nov 3, 2018: EX 597 TU 599 EQ 616
Current Score: December 1, 2019: EX 690 TU 706 EQ 699
Goal Score: Dec 31, 2019: EX 700 TU 700 EQ 700

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