Should I go for a 2nd CC while rebuilding?

[Anonymous]

I have a 515 FICO on Discover Scorecard. My CR has several unpaid COs showing as "Closed" but with a balance. The accounts were COed off more than 2 years ago but have been reported monthly since then. Discover Scorecard shows a 135% Revolving Utilization. 

I was approved for a Credit One CC with a $300 CL last month. This is my only CC that is open right now.

Besides trying to get the COs off my CR, what else can I do to improve my FICO? I already paid the $75 annual fee and I will get a $99 fee in the second year for Credit One. The $99 fee next year will be charged monthly at $8.25. How much can my FICO improve by only having 1 open CC and paying it monthly (assuming that the COs remain on my CR)? Should I try to get a second CC right now or should I wait until my FICO improves with proper usage of my Credit One CC?

[Brooklyn2018]

Welcome to MyFICO Forums!

To be honest, and opinions may vary here...but, unless you take care of the CO’s your utilization is going to sting every month moving forward. Congrats on your approval, btw. The more you read the more you will learn that utilization is very important regardless if you have 1 cc or 20 cc’s. Keeping it under 30%(8.9% is ideal for the most FICO pts you can squeeze out) Having CO’d off cc cards with balances are hurting your utilization and until you take care of them they will continue to keep hurting your attempts to raise your scores.
I had the same problem last year with just ONE CO cc for $136, which, was hurting my utilization and with my scores being so low at the time it was near to impossible to mask that amount with HIGH CL’s. So, I had to pay it to begin a “clean” utilization “start” and my scores began to recover, slowly.
So, unless you can be approved for HIGH limit cards(?) which at this point you won’t...IMHO and IMOE, I would do what I can to pay off/settle the CO’s to begin that “clean UTL start.”

Hope that helps some.

Good luck!🤞

Note: IMHO, I would try and take care of the CO’s before applying for anything else. Once your scores start recover you should be in a better position for your 2nd cc...just MHO, and as always, YMMV.

[Anonymous]

And to add, when you have the COs handled, they’ll stop suppressing your score on their own via monthly updating. That along with the decreased utilization will make a good difference in your scores. In turn, this can give you better options for other cards (such as Discover rather than First Premier or another predatory lender like them or Credit One).

Always keep in mind that credit is a long game and you need to look down the road a ways as well as at what you have now. Clearing the derogs to the extent you’re able will give you much better odds at getting keeper cards rather than ones that will just approve you but prey on you.

[gdale6]

Welcome to the board

You actually need 3 open revolvers to drive Fico in a rebuild so I would open 2 more. OpenSky offers secured without a credit pull. Also check the Capital One prequal to see if you can get an unsecured rebuilder there. For each of the first 3 revolvers that open there is a bump to Fico.

[Anonymous]

Thanks for all the replies.

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@gdale6 wrote:

Welcome to the board

You actually need 3 open revolvers to drive Fico in a rebuild so I would open 2 more. OpenSky offers secured without a credit pull. Also check the Capital One prequal to see if you can get an unsecured rebuilder there. For each of the first 3 revolvers that open there is a bump to Fico.

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I actually did the prequal for Capital One and nothing showed. Decided to app anyway the other day and was denied. If I were to have 3 open CCs, how does the Fico bump happen? Is it a one time bump or is it a progressive bump as you make on time payments on all 3 CCs?

Unfortunately Discover secured is out of the question as the prequal said previous CO with Discover so I was denied for that. I'm afraid to app for any other big bank secured card. Would it be worthwhile to get for example the Sky Card and 1 additional pred card like Credit One? I understand these predators are not cheap with the fees and all that, but I'd be willing to pay the fees if the tradeoff by having 3 CCs is worth it. Hopefully after a year of on time payments my score can improve so I can close the predators and get new cards. I say this because the Credit One fee for the first year is paid upon activating, which is about the same setup for all predators, so you might as well keep it open at least 1 year. Also, I have a long average age of accounts so I don't think I'll see a dip once I close the predators.

[Anonymous]

Credit One if you must, but look into Green Dot and Citi’s secured card - either of those would be preferable if they’ll let you in. I would exhaust all possible avenues before dealing with that bunch.

I had the Indigo card when I started, and honestly it’s not a bad card for its intended purpose. It has a permanent $300 limit, no CLI system exists, but other than the AF there are no fees associated. Website is basic but easy, payments are credited quickly (one day usually, can be 2-3 if paid on a weekend), and in general a stress-free rebuilder card. I read a lot of negative press on it last year and found essentially none of it to be true - it was mostly complaints from people who have the mentality that it’s ok to pay 29 days after the due date because it won’t be reported as a 30-late lol. I’d recommend that one as one to get and keep for a year, and then close and replace with better cards.

[Anonymous]

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@Anonymous wrote:
Credit One if you must, but look into Green Dot and Citi’s secured card - either of those would be preferable if they’ll let you in. I would exhaust all possible avenues before dealing with that bunch.

I had the Indigo card when I started, and honestly it’s not a bad card for its intended purpose. It has a permanent $300 limit, no CLI system exists, but other than the AF there are no fees associated. Website is basic but easy, payments are credited quickly (one day usually, can be 2-3 if paid on a weekend), and in general a stress-free rebuilder card. I read a lot of negative press on it last year and found essentially none of it to be true - it was mostly complaints from people who have the mentality that it’s ok to pay 29 days after the due date because it won’t be reported as a 30-late lol. I’d recommend that one as one to get and keep for a year, and then close and replace with better cards.

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I did the prequal for Citi and got no offers. Someone correct me if I'm wrong but I feel big banks have higher criteria for secured cards compared to secured cards from smaller banks. Is it worth wasting a HP on Citi secured card compared to apping for the Indigo card? I read Citi likes customers who already bank with them and I do not bank with Citi.

Also what was your AF for the first year when you opened Indigo? It be nice to get a $0 annual fee for the first year.

[Anonymous]

Citi is definitely one of the stricter and more conservative, risk-averse lenders out there. Without a prequal I probably wouldn’t apply.

IIRC the Indigo AF was $75 the first year and would have gone up to $99 for subsequent years...which is all the more reason not to keep it past the first year. As for a waived fee, that won’t happen. They know their market and know the limited options of their target clientele, and they know an incentive like that isn’t necessary. Paying to play is part of the deal but just pay off the AF the first month and be done with it, and use the card to build enough to qualify for better cards by the time the card’s anniversary rolls around. It’s pretty minor in the grand scheme - credit is a long game for sure - that card definitely helped me improve to qualify for better cards and served its purpose well.

[Superdad88]

I’m in the same boat with scores about the same as you. I started my process a couple weeks ago here’s what I’ve done.
I paid off marrick cc 188, which only raised my score 1 point!!! LOL but it’s paid and not reporting monthly.

Opened a capital one cc was approved for 200 but added money to make it 500

Opened a green dot platinum cc also 500 but need to add funds to get it started.

Opened a my jewelry card 5K

Opened a self lender loan, something for you to look into 👍🏻

Also will be opening a DSX design.

I have 5 collections and 2 charge offs all with in the last couple years. I have called a couple of the small collections (under 300) and made settlement offers and of the two I called they agreed to PFD. Which I will pay today. Didn’t call the others yet to make a settlement offer because there over 2K and want to make sure I have the money to pay it when I call.

It’s a good feeling to pay one off and looking forward to my cc and loans to hit and see what happens.

For me it was a choice to either open the new trade lines or use that money to pay my collections. But I went ahead and opened the trade lines because in the long run they will start reporting positive while I knock off the collections.

[Anonymous]

Superdad, make darn sure you check that Merrick account when the statement cuts. You’ll have a few bucks in trailing interest showing up. Pay it immediately to hopefully avoid interest next month - last thing in the world you want is to forget about that and get a 30-late and a huge score drop over $2.50 that was lost in the shuffle...