Few q’s as a rebuilder

[Anonymous]

Hello folks, this is my first post here but I’ve come to ask a few questions and seek some advice. My credit scores are about 600-630 across the board, I have a few collections accounts and an old credit card that my ex wife took out as derogatory marks. When I transitioned out of the service in 2011 I ended up pretty much giving up on my credit for years (had a divorce at the time too), never really tried to obtain any credit besides my car loan until recently.

My car loans in good standing for over 2 years now and since January I’ve taken out a total of 4 cards. Indigo, credit one to start which allowed me to get a decent QS1 and a merrick bank (no AF). My merrick card was a pre approved offer to double my credit line to 1,800$ after 7 payments. My QS1 shows me in the credit step program and has me set to increase from 300 to 500 after my first 5 payments.

My q’s are how does the cap 1 credit steps program usually work? After the bump to 500 will the account be eligible for more credit increases in the same program?

As for merrick bank, after the double your line offer hits do they continue to offer CLI?

I would like to ditch credit one and indigo within a few more months as I got what I needed from them, both have AFs and indigo doesn’t have CLIs, credit one charges interest when a charge posts which is junk.

So again how can I expect my CLIs to work for QS1 and merrick? I would like to replace the indigo and credit one with something better once I have payment history built up. What is a good next step from the basic cards I have? I’m really new to the credit game as I never really used credit cards going back.

My income is pretty decent, medically retired from the Army with a full pension plus social security.

Thanks in advance!

[Anonymous]

Bump for more info for you guys.

And again sorry I’m new to trying to finally understand how exactly all credit stuff works like the card questions above, when I was younger and naive I didn’t learn I just used credit without ever tracking my score and all the accounts I had young I closed many years ago so they don’t show anyway.

So now I’m trying to learn and this is why I need help.

I mentioned above transitioning out of the service, when I did this in 2011 I went to community college for a bit. After my struggles with PTSD started I ended up failing out of school which caused me to owe 2700$ in over payment of financial aid that some how the school ended up paying for. This is back in 2012, so now I have the debt of 2700$ at my school and can’t attend until I pay it. I don’t have the cash or assets to put up for a loan or pay it outright.

As I already said I’m trying to fix my report and do so by utilizing my cards properly and paying off some old debt. I’m having trouble getting ahead of it all in a way that will make my credit spotless.

This is where school comes in, even though I’m retired I have my post 9-11 GI bill to finish using up, this provides me with an additional 1300$ a month in BAH. This money would be purely extra to repair credit, pay off current cards, get ahead, down payment on a new car, etc. You end up pulling about 12k a school year which would solve all my current credit issues, plus way beyond.

I need to be able to obtain a personal loan to pay this debt at the school, so basically 2700$ is in the way of me making an extra 12k next year. Paying off the loan will be easy when school starts.

So this is a tough spot as I only opened my oldest CC account in Janurary. The only personal loan company willing to work with me offered me a secured loan, but I don’t have means to secure it as my vehicle is technically worth less then what’s owed on it, so no second lien.

I’m trying my best to get things fixed so I can obtain this personal loan prior to mid August, so I don’t have a ton of time of expendable money currently. I’m hoping maybe someone has a few pointers here plus the questions above.

Thanks again so much.

[gdale6]

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@Anonymous wrote:
Hello folks, this is my first post here but I’ve come to ask a few questions and seek some advice. My credit scores are about 600-630 across the board, I have a few collections accounts and an old credit card that my ex wife took out as derogatory marks. When I transitioned out of the service in 2011 I ended up pretty much giving up on my credit for years (had a divorce at the time too), never really tried to obtain any credit besides my car loan until recently.

My q’s are how does the cap 1 credit steps program usually work? After the bump to 500 will the account be eligible for more credit increases in the same program? No, its a one time CLI and then you either get auto CLIs based on your spending on the card or you have to request them. Welcome to the board.


Thanks in advance!

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[thornback]

Hi Gruntwerkz,  welcome to the forums!

Any reason why you haven't taken advantage of your military bankground to become an active member of military banks / credit unions?  USAA and Navy Federal are great ones that treat their members very, very well -- even with past credit issues.   They also tend to offer better rates on things like loans, with easier approval thresholds for both loans and credit cards.     

I agree - drop credit one and indigo asap... definately before you pay another AF.    

I don't know about how merrick works, but I do believe - based on what i've read here, they give auto CLIs quite regulary. 

If I were you, I'd get my memberships for USAA and Navy started now.. (especially Navy) so when the time comes, you can replace credit one and indigo with a new card from each of them.   You can search the forums for both to get an idea of how they work for their members as well as an idea of personal loan approval odds. 

You say you have a few collections on your reports...  are they paid? If so, you need to start a Goodwill campaign to try and have them removed.   If they are unpaid, then contact the collection agency and offer a Pay for Delete (PFD) -  you can research the forums for more details / examples on Goodwills and PFDs -- or just ask questions here if needbe and I/we'll elaborate.   If you list the names of the collection agencies, we may be able to tell you - based on experiences of forum members, how best to deal with them.

You also mentioned an old credit card -- is it in a charge-off status?  Is there still an outstanding balance being reported or is it reporting $0 with a separate collection account associated?    We need to knwo this info to determine your best course of action -- also please note the name of the original creditor and the name of the collection agency, if one is involved 

[Anonymous]

Thank you. Here’s what I have to answer you now. I just realized after I switched to capitol one bank I could of went with NFCU or a local CU, not even sure why I opened my checking account with capital one, guess because it was easy. I had issues with citizen bank closing an account I use that has dependent pay direct deposited to it, so I left them.

Are you suggesting I should open a checking account with NFCU and have all my direct deposits from the VA and social security go there? Or maybe an account with USAA and NFCU and one direct deposit to each?

The collections accounts are not paid, but here’s the info I have.

I have in collections:
EOS CA - 313$ from a hospital bill
Portfolio recovery - 525$ originating from HSBC bank, funny thing is here I’ve never had anything from them in my life. Don’t know where it came from.
Enhanced recovery company - 89$ For charter communications, this must have been an old cable bill. Thought it was squared up.

I also have some small 20$ ones on Equifax but they are easy to pay, they are old medical.

Old credit card is first premier, listed in charge off status saying owed 425, CL was 300. Ex wife took this out right before divorce, it was closed in Jan 2013 so don’t know why it’s even reporting still.

Other bad mark was ally auto, all 25k paid short 520 from what GAP coverage didn’t get. Had changed addresses and such and never followed up, my fault I let it even go there. This is showing like the credit card, charged off but still showing the amount for ally auto and the balance due. I’ve had people try to collect on this debt but I’d like to settle it with the original collector it seems?

The credit card and ally auto were the first things the lady from onemain brought up, so clearly these scares lenders. The issue stands that without a personal loan I won’t be able to tackle the 2700$ bill to access that additional 1300$ a month pay to square this all away. I could start handling things slowly, but I’m also trying to work on improving my current credit as well. I’m only keeping indigo and credit one currently open as the credit available is helping, if I do use them I pay them immediately. I put most of my charges to the merrick card and QS1.

[Anonymous]

Hey man, glad to see you made it here The guys above are 100% right. As for the credit steps program, if you search “cap one bucket” on here you’ll get some info on the way CapOne sets up its rebuilder cards. It’s been demonstrated many times that “bucketed” cards (ie, rebuilder cards that start with low limits) have a very hard time getting any love with limit increases, and although some have had luck, my opinion is to use it to serve a purpose (opening the doors to better cards) and then PC it to a no-fee card and put it in the sock drawer, or close it out and move on.

You definitely need to check out Navy Federal Credit Union - if you read through the credit card approvals subforum, you’ll see many many posts with people being blown away by what Navy offers. They are very highly regarded around here and you can essentially walk right into membership with your service history.

Glad to see you came here - this forum is literally an incredible wealth of information - follow the advice here and you’ll be in great shape before long!

[Anonymous]

Regarding the First Premier Account, since you’re in NY, call up the bureaus and ask for the early exclusion - with the five year stature here that should go away immediately, solving half the problems toward your loan.

[Anonymous]

Thanks for leading me here man, so I would need to call all 3 B’s? Honestly never new you could just call them.

Is ally auto was paid the 520 owed it would at least report as a paid account showing I settled it correct? I still need to call them and see what they say.

I’ll also look into making a membership for NFCU as it sounds promising from here.

Thanks again man!

[Anonymous]

Anytime - anyone looking to rebuild needs to be here.

Yes, even if they won’t remove the lates, a paid debt is always better. For one, it looks better to an underwriter and even more, once it’s paid, it will no longer update reporting to the bureaus. That constant updating is what keeps your scores suppressed. Once it stops, it begins to age, and over time your scores will begin to recover from its effects. PFD is ideal, but barring that, paid always trumps unpaid.

And yes, you need to call Navy yesterday!

As for the exclusion of the card, just go to each bureau’s website, get their number, and call them with the account number from your report from that bureau handy. Let ‘em know you’re in NY and want the tradeline deleted due to the NY 5 year Purge Law. Should be a no-brainer for them. You’re well beyond that timeframe already.

[thornback]

You're awesome -- I didn't even realize OP was in NY (lucky puck ).   

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@Anonymous wrote:
Regarding the First Premier Account, since you’re in NY, call up the bureaus and ask for the early exclusion - with the five year stature here that should go away immediately, solving half the problems toward your loan.

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I was just about to write up my whole spiel about dealing with a First Premier charge-off (thanks for saving me from that) -- you're very fortunate OP -- call those bureaus tomorrow.   

And - @ImTheDevil -- correct me if I'm wrong,  but the 5 year purge rule applies to all negatives,  correct?  Not just specific types like charge-offs?   So OP should review all collection accounts and figure out what the DOFD is and determine if some of them may also be removed? 

FYI, OP:  DOFD is the Date of First Delinquency - the month / year the account first became delinquent and was never brought current.