Denied Amazon store card...need advice on rebuilding

[scm325]

Hello all! I purchased the Fico Quarterly Monitoring since March of this year and have been a lurker of the forums since then. Before purchasing the Fico Quarterly, I always used CreditKarma as an estimate, I started with a CK score of 563 on Jan '12. Now it's at a 631 (I know still crappy). My TU score shows a 622 as if the 2nd of this month. I just was denied an Amazon store card 2 days ago and they stated my score is 591 (score range of TU from 300-850). Could my score have dropped so quickly?

Quick summary:

I opened up a Cap1 Secured Card with a limit of $200 in March '13. Balance is $40 at the moment.

Total of 8 inquiries (including the Amazon from a couple of days ago)

Recently got approved for VS ($350) and JCrew ($250) via shopping cart trick and waiting for them to come in the mail.

Old Cap1 card from late '08. Credit limit was $500. Account restricted, but finally paid the balance back down to $0 this past April. Still reporting as revolving.

Baddies:

- BofA paid-settled less than full (will fall off in '15)

- TMobile Collections with Midland Funding (will fall off in '15)

- Recent collection of medical bill from 07/2012 that CK and TU Fico Quarterly is no longer showing. (???) I recently acquired another bill from an Urgent Care through the same hospital that I am currently paying monthly. CK dropped my collections from 2 to 1. And under the collections tab on the FICOQuarterly it's only showing my TMobile collection. (???)

I have learned quite a bit (and still learning) since lurking the forums in the past 3 months, but I got really antsy with Amazon store card and decided to apply since I frequently purchase from them. Should I just let my Cap1 Secured, JCrew & VS card grow for a little bit before applying for anything else?

Thanks in advance for anyone taking the time to read any of this.

[MissMayhemm]

I was in the same boat as you not to long ago.  The only card I could get was the Cap One Secured.  So I started with that and within a year I had deposited (8 individual deposits over a 12 month period) an additional $1900 so that my limit was $2000.  My credit score jumped at least 100 points as long as I kept the utilization under 10%.  I know that sounds like a lot of money to tie up in a secured card but I personally considered it an investment in my credit.  It's not like I won't ever get it back.  I intend to let all of my other account age for 4 or 5 years before I close it.

So, a year after I opened my account (exactly one year)  I was approved for Barclay Arrival ($3000), Discover It ($1200), Discover Sams Club ($1300), Cabala's Club Visa ($1500) and Care Credit ($5000).  I applied to all within 2 days time and was approved.  

From everything I've read in the forums, you need one card with a larger limit and it will open the door for others.  Also when you check your credit report and it shows that you have a higher credit limit, it doesn't actually state (unless you do some digging)  how long you've had the higher limit.  My reports show the Cap One card as having been in good standing for the last 18 months with a $2000 CL.  When you apply for a new line of credit (excluding loans) that is all they will see.

Just make small deposits and get your CL up there a little higher.  You'll see your credit score go up every time you do.

Good Luck

[scm325]

MissMayhemm, do you mind me asking what your starting score was? I am a student and only work retail part-time, so I don't have that much disposable income to contribute to my secured card as I need to. =/  I guess the hard part is trying to limit my inquiries every time I get a score increase thinking that I would qualify for something else.

[MissMayhemm]

I think my scores were in the mid 500's according to TU and EX.  I couldn't actually subscribe to the FICO score watch service until I had 6 months of history.  If you could contribute $25 as often as you could it would definitely improve your score over the long run.  Even if you hit a $1000.00 limit.  

Within 18 months my FICO EQ hit 670 and my TU Vantage hit 750.  I have yet to be denied for anything that I've applied for.  

When I made my deposits to my secured account it almost became like a drug.  Every deposit bumped my scores up.  It really was motivating.  I'm not a patient person and I wanted to get my score up as high as fast as I could.  

I subscribe to TransUnion Credit Monitoring.  The monthly charge was $16.00 but when I called to cancel after 3 months they cut the rate in half and (here's the big draw for me) you can pull a new credit report for free once every 24 hours.  So far there is nothing on my Equifax or Experian reports that hasn't shown up on the TU reports.  Good stuff if you're going to be a bit obsessive about it like me.

You said you were worried about inquiries.  I personally wouldn't apply for anything for the next 6 months and get your credit limits up.   The more credit you have available and manage responsibly, the more credit lenders are willing to give you.  I would've made those deposits on that secured card even if I had no chance of getting them back.  I was investing in my credit future (and paying for past mistakes).

Do what you can. 

[scm325]

I never got to thank you for the advice. I guess I'll garden my three cards as long as I can, at least until I legitamately hit the "fair" category. Really considering doing a recon with Amazon, but I know the odds are against me and I don't have a valid argument. This is going to be hard to not apply. I can't wait until I start getting approved for prime cards or not get denied by any creditor. Just eager to have good credit again.

[guiness56]

A CL does not improve your score by itself.  FICO does not score those.  What it helps with is lowering your utilization which will raise your score.

If you can only get one secured card with a low balance for the time being, that will help you.  Making on time payments for the next 6 months to a year and you will see your score go up.

It isn't how many cards you have or the CL on them but you manage them.

[CreditCardDiva]

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@guiness56 wrote:

A CL does not improve your score by itself.  FICO does not score those.  What it helps with is lowering your utilization which will raise your score.

If you can only get one secured card with a low balance for the time being, that will help you.  Making on time payments for the next 6 months to a year and you will see your score go up.

It isn't how many cards you have or the CL on them but you manage them.

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This. Your current limits can/may influence what credit limits you'll be given by  new creditors. As stated earlier, having higher limits can help lower your utilization. When you have toy limits, it's much harder to stay at an extremely low utilization percentage (which is what ups your score). But there is no "credit limits extended by other creditors" criteria in FICO scoring. I have a secured Cap One, with a $200 limit, and I'm not giving them a dime more...that's because I can get where I want to go without it.  I'm going to age my accounts for another 9 months to a year, and bring my utilization down real low. I would probably be at a 700 FICO, right now (without adding a dime to my Cap One account) if I'd kept my utilization down and my AOAA up (I should have waited before applying for additional cards). I got a bit too excited, and I'm paying for it now.

The thing to remember is that FICO is very raw information - two people can have the same "raw" score,  apply for credit from the same creditor, and have different outcomes. It's very important to fix your baddies, be patient, and ride it out.  TIme passes quickly, when you're not  "watching" it.