Rebuilding Since 5/2018 (Updates 6/2019)

[BossyBT]

Hi All,
As you can prob see, Im new to the community, and have found many of your stories and tips extremely helpful. However, as much as Im trying to apply advice given to others to my scenario, Im still unsure of how to go from here.
 
So a summary of my credit history. When I started the process of rebuilding my credit my FICO was 502 (May 2018) I was using a repair service who helped get one card removed and that was a 20-30 point jump. I cancelled their services in Oct 2018, and started putting that money toward my bills. As of Jan 2019 my EX FICO is 588. I've spent many hours researching and trying to building my credit. I have a total of 7 account reported.
OPEN:
ALLY (auto loan balance): $11K - Never Late
Student loans : $8K
Revolving card: $380 ($300 limit) started at $900+ I've been paying this down agressively every month with any available funds.
CLOSED (charged off)
Capital One: $0
-Payment after charge off/collection dispute resolved; reported by grantor
Comenity Bank (retail store): $0
-Charged Off as bad debt, purchased by another lender
Comenity Bank (retail store): $0
-Charged Off as bad debt, purchased by another lender
Between 1-3 Hard Inquiries on EX,TU, EF
81% Payment History
6yrs of Credit History
For each of the 3 cards that were charged off, I paid/settled (foolishly to a 3rd party over $1500 in total). Prior to paying them off they were showing the $0.
Right now, Im am just confused of my next move. I'm scared to get anymore inquiries, but know that I need a CLI. I was pre-approved for Credit One (but see that everyone discourages against) Discover IT Secured pre qual from site, but this would mean putting my cash up if approved. Im scared to be denied and have another inquiry :-( Im stuck and frustrated esp after learning that the 609 that CK is reporting is much less than what my EX FICO 8 is.
 
Any tips? Should I just sit tight, pay off this revolving card?  Then look into applying for new line? I'd appreciate any help.
 
-BossBT

[Anonymous]

I feel like you are doing a good job and on the right path! I would pay off the one resolving card especially get it back to under the credit limit ASAP. 

Have you tried starting a GW campaign for the lates? 

In my experience, if Discover doesn't pre qualify you for a secured, it's getting denied. I've tried several times between DH and myself. It's always a big fat NO. 

Credit One, is for rebuilding. Just be aware of that. There are a lot of things that I have found helpful from them but at this point I'm using it for rebuilding purposes and hopefully by it's time to pay the Annual fee again, I'm out of there. If you do decide to open pay off that AF right away. I made the mistake in not paying for it right away and they reported very fast with a balance of $100 and I didn't get the jump I anticipated. 

[Anonymous]

Since you only have 1 active card right now, paying it down would be a big boost to your credit score.  FICO scoring takes into consideration your highest single card utilization AND total utilization across all of your revolving accounts.  So essentially your single UTI is also your total UTI since you have only 1 card.  

Since it is over 100% with both single and total, a single payment will affect your credit to your benefit.  There are known scoring breakpoints.  Anything above 88.9% is considered maxed.  When you reach 68.9, 48.9, 28.9, and finally 8.9, you'll have gained all of your points back and seriously you don't realize how many points you are losing.  The amount owed is irrelevant in your case, the utilization is what is relevant.  

Getting in with Discover in the future is recommended.  My recommendation to you now is don't add anything yet.  Do what I mentioned and pay down that card.  Once your score has went up, try the prequalifier again.  I won't guarantee due to the other profile issues but maybe they will offer you unsecured. 

The best scoring bracket to be in is 8.9% so with your $300 limit, you cannot let more than $26.70 be reported or your scores will start heading in the wrong direction again.  Also, do not let the card report a 0 balance.  You'll get penalized for this as well.  I usually recommend Netflix's subscription or something similar.  Pay the balance on your due date every month and let them report.  You won't be paying interest and you'll remain in the ideal scoring bracket.

Hope some of this helps and please report back on your progress.  Hopefully some of the others can chime in on some other issues.  Good Luck!

[BossyBT]

Thanks for your reply!

I think my main concern was trying to get away from using more of my money (I'm just a regular 9-5 girl with all my regular responsibilities) so I been trying to do this as fast as I can and still save. By the end of the year I want to start looking into home ownership!

So my hope was that Credit One would get me the open line, (hopefully with more than $200 lol) and I could use whatever I was going to use for a secured card to pay down that open card ASAP. And yes, I would pay that AF for Credit One ASAP.

I was looking into the GW letters but I read (diff forum) so many people who said they didn't work, so I got a bit discouraged. I guess it doesn't hurt to try though.

Thanks again for your feedback!

[19eighty5]

You're doing a good job! You made the right decision to drop the credit repair company, that's for sure. I'm no expert but can share some next steps based on my current rebuild, which started with scores and a profile similar to yours.

- Pay off the maxed out credit card as fast as you can. You'll regain points from this and help improve your chances of getting approved for your next card(s).

- Once you can pull together $300, apply for an OpenSky secured credit card. No credit check and I believe a guaranteed approval. When I couldn't get approved for a secured card, I went to OpenSky and they took care of me. I have never regretted this decision.

- Start a goodwill letter campaign, writing to as many of your old creditors as possible to ask for forgiveness/removal of charged-off accounts and late payments

- If you're able to open an account with NFCU, I would highly suggest this be your next move and after getting a savings and/or checking with them, apply for their secured card ($200 min) as your 3rd credit card. 3 revolving accounts will help maximize FICO points for your profile.

Once you do these items, I would continue the GW campaign until all the negative items are removed. Another interesting thing to check out is your free credit reports from the annual credit report website (quick Google should help you find). I recommend you review your reports from all 3 bureaus to determine when your negative items are scheduled to be deleted from your credit reports. In some instances, as you approach those delete dates, you may be able to request an early exclusion. Good luck!

[BossyBT]

Thanks @Overmedicated

Very helpful. I think Im rushing myself, and I know that UTI is killing me. I just had to get some major work on my car otherwise I wouldve paid it off this week!! I'm still thinking about doing so, sacrificing all my extra $$$ over the next month and getting it to 8.9%.

I'll be sure to update soon. I just paid it down to the $380 at the end of my statement, so I'm waiting to see what that change will do for my score/ if anything *crossing my fingers*

-BossyBT

[BossyBT]

Thanks @19eighty5

The charge-off are fairly recent within 1-2 yrs. So I know I have some ways to go before I start to see them fall off from DOFD. I will start with the GW campaign. Won't hurt to atleast try.

I have a couple inquiries coming off in April 2019, so I think that's helpful. I've also thought about becoming AU to see if I can get a bump.

[Anonymous]

@BossyBT wrote:

Thanks @Overmedicated

Very helpful. I think Im rushing myself, and I know that UTI is killing me. I just had to get some major work on my car otherwise I wouldve paid it off this week!! I'm still thinking about doing so, sacrificing all my extra $$$ over the next month and getting it to 8.9%.

I'll be sure to update soon. I just paid it down to the $380 at the end of my statement, so I'm waiting to see what that change will do for my score/ if anything *crossing my fingers*

-BossyBT

It won't do anything until you reach some of the breakpoints that I mentioned above.  Are you expecting a tax refund this year?  If so then great 

[19eighty5]

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@BossyBT wrote:

Thanks @19eighty5

The charge-off are fairly recent within 1-2 yrs. So I know I have some ways to go before I start to see them fall off from DOFD. I will start with the GW campaign. Won't hurt to atleast try.

I have a couple inquiries coming off in April 2019, so I think that's helpful. I've also thought about becoming AU to see if I can get a bump.

---

I did the AU move as well, which helped secure some better cards along the way. If you have someone willing to add you that has perfect payment history and super low utilization, that could really help as well. Keep in mind, it probably won't factor into your mortgage preapproval but could help in other areas.

[BossyBT]

No Tax return... lol

in fact, I hate this time of year.... I usually owe