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Easiest Way to Rebuild?

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Established Contributor

Re: Easiest Way to Rebuild?


@FireMedic1 wrote:

You know your FICO scores possibly?


I want to repeat this advice.

 

Since it is not easy, you will want to invest the time and effort in to tracking progress and effectiveness.  If you do not have an affordable methode to get your FICO scores on a regular basis, get one.  A benchmark to start is very helpful.

 

 

 

 

050719:     
120119:     

Message 11 of 14
Established Contributor

Re: Easiest Way to Rebuild?


@FireMedic1 wrote:

Ok. To start with. Its going to be secured to start. Grab a OpenSky. No HP. Everyones approved. In 3-4 months after responsible use. Start hitting up Disco's secured card pre-qual page. It will graduate. Any loans at all?


While I agree with the good @FireMedic1 's specific advice in this regard, I want to strongly assert my opinion that too many people rebuilding spend money in a few areas that are not necessary: 

1) Multiple secured cards

2) Self Financed loans.

 

Along with perfect payments, the most critical aspect of credit repair is TIME.  Neither of those things explicitly help payment history nor time.  For this reason, after you know your real FICO scores as a baseline, I would attempt a secured Discover prequal BEFORE pursuing another secured option.  Discover is such a better product, that it is worth investing  the time and effort in to making sure it is not available to you.  If it is not, proceed with no qualification check secured options so long as they report to the credit reporting bureaus.

050719:     
120119:     

Message 12 of 14
Valued Contributor

Re: Easiest Way to Rebuild?

Welcome to the myFICO forums!

 

Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.

Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from incurring a FICO scoring penalty.

An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into Self Lender or a Share Secured Loan at a Credit Union.

Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit.



















Your FICO credit scores are not just numbers, it’s a skill.

Message 13 of 14
Super Contributor

Re: Easiest Way to Rebuild?


@BallBounces wrote:

@FireMedic1 wrote:

Ok. To start with. Its going to be secured to start. Grab a OpenSky. No HP. Everyones approved. In 3-4 months after responsible use. Start hitting up Disco's secured card pre-qual page. It will graduate. Any loans at all?


While I agree with the good @FireMedic1 's specific advice in this regard, I want to strongly assert my opinion that too many people rebuilding spend money in a few areas that are not necessary: 

1) Multiple secured cards

2) Self Financed loans.

 

Along with perfect payments, the most critical aspect of credit repair is TIME.  Neither of those things explicitly help payment history nor time.  For this reason, after you know your real FICO scores as a baseline, I would attempt a secured Discover prequal BEFORE pursuing another secured option.  Discover is such a better product, that it is worth investing  the time and effort in to making sure it is not available to you.  If it is not, proceed with no qualification check secured options so long as they report to the credit reporting bureaus.


I just recommend Open Sky first fresh out of the gate so Disco can see some payment history first. Its rare they are the first to hand out a secured card in the three and a half yrs I've been hanging out in this corner of the forum. Save the HP's for the real secured graduating cards that will come next before a Cap1 unsecured card since they dont graduate secured any longer for now. Thats all.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 14 of 14
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