Help rebuilding cred6

[Queeny73]

Hello. I am starting the journey to rebuilding my credit. My credit is 580 and I just got approved for the capital one secured card and a secured Amazon card. Any tips for my journey?

[JoeRockhead]

Welcome to the forum.  You'll get better, more specific advice from members if you can include some more details:

• What derogatory information is in your reports such as charge offs, collections, late payments?
• how many and when did these things occur?
• What unpaid debts do you still have, if any? 
• What income do you have to throw at unpaid debts?

The more information you can give, the better people can lead you in the right direction. 

[Queeny73]

Hello, yes I'll get better. I'm post bankruptcy and starting all over again. 

[JoeRockhead]

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@Queeny73 wrote:

Hello, yes I'll get better. I'm post bankruptcy and starting all over again. 

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Seeing your post in another thread mentioning you're trying to qualify for a mortgage,  I'd recommend you don't apply for any other credit, or add any more accounts at all right now. 

The best thing you can do in the meantime is use your cards responsibly and only allow a very small balance ($25) to report on that Capital One card.  The Amazon card is fine to use but pay it to zero before the statement date (not the due date) so it reports a zero balance (doing it this way will mean nothing will be due on the due date).  Doing this every month will help optimize your scores.  It's called AZE0 (all zero except one) and there's a lot of threads on the forum discussing it.  

If you put the mortgage off for another 18 months, you can see where your scores are in another 4 to 6 months and consider adding a third card, preferably a bank card revolver (visa/mc) not any more store only cards.  You can also, at that time look into opening a SSL (share secure loan) lots of threads here explaining the process and the score benefits of SSLs. 

Stay away from "credit builder" products like Kikoff, Chime, Self, Credit Strong, Fingerhut, National Credit Direct or anything similar.  These types of things are mostly predatory. 

[FicoMike0]

Ditto @JoeRockhead 

Except I would go for another card, secured is ok, sooner rather than later. Opening new cards has a short term penalty. Take the hit niw. If you target a one year horizon for a mortgage, you want to pay the short term penalties before then. Try to have three bank cards reporting, that builds good history. If their all $200 secured cards, that still works. Do azeo, look it up. You don't have to use more than one of the cards every month. They're not to use, they're to build positive history. Manage reported utilization, look that up too. Know your post dates, write them down. When your youngest account and most recent hp turn 12 months old, you'll get a score boost. You need that boost before a mortgage app.

You can get very specific mortgage advice on the mortgage board.

[JoeRockhead]

Three revolvers are indeed optimal for practicing AZEO. The reason for advising against another new account now was it will lower scores even further than they are currently, which aren't good.  Considering where the scores sit, not a good idea whether going for a mortgage or not. 

By allowing more time to pass with the current set up it gives scores a chance to increase. The more time that passes between now and the next credit app the better.  Longer positive payment history can be established, and scores can increase. Improving both of those attributes also increases the chances of getting better approvals in the future. 

No amount of new positive accounts is going to negate, or offset the BK that's on record.  Rebuilding simply takes time and that's the one thing that can't be manipulated.  In the rebuild game, lack of patience generally only brings disappointment and slows things down.  Just my 2¢

[FicoMike0]

Again, I agree with @JoeRockhead , but...

If you're planning a mortgage app, that's a major life event and even a small interest rate improvement saves a lot of money. Id sacrifice scores now, to peak them for the mortgage.