Starting to Rebuild with 3 credit cards

[Anonymous]

Hi all,

This is my first post on here, but have been addicted to this board since end of March 2019, and can I just say the information I have found on here is just amazing so thank you to all contributors for the wealth of information provided. This might be a long read for some and I apologize.

To make a long story short, I was very financially irresponsible throughout my teenage years and into my 20's and pretty much ruined my credit. In 2014 I attemped to get back on my feet using a CAP1 secured card, but ran that one into the ground and CAP1 closed it. Didn't use any type of credit for the next 4 years. Just out of curiosity last year, I decided to check my credit score, and it was a 525 FICO EXP. I know. That's when I decided it was time to start rebuilding--for real.  

I applied for a CAP1 Platinum unsecured card in 08/18 and to my disbelief I got approved for $300 SL with credit steps to $500 in 5 months. I was elated. I began using the card, but have to admit I didn't really know exactly how to use a credit card. The first month, I did 89% utilization, then PIF. The next month 60%, carried over half, minimum payment the next month, back up to 70% the following month, etc. (My score fluctuated between 525 - 545 and I couldnt understand why) 

In January, I decided to try for the QS1 and again to my disbelief I got approved again with the same SL as Platinum along with credit steps to $500 in 5 months. Continued to ignorantly use both cards as described above, always making at least minimum payment on time.

I then received a pre approval offer for the Credit 1 platinum and applied and got it with a $400 SL, along with $75 AF.

I got the CLI for my Plat in January, and am due to get the CLI for my QS1 next month. 

I finally discovered this board at the end of March and realized I was doing everything wrong. Overutilizing, carrying a balance, making minimum payments, not making multiple payments, NOT READING THE TERMS AND CONDITIONS OF THE CREDIT 1 Platinum card, etc. 

To recap I currently have 3 cards, totaling $1300 CL. 

Cap1 Platinum (now QS, I upgraded thanks to this board) - $500 CL

Cap1 QS1 (got early CLI of $100 and will receive the other after steps, again thanks to this board) - $400 CL

Credit1 Platinum - $400 CL

I received the Credit1 Platinum 2 weeks ago and immediately paid the AF. But now after reading the terms I really don't like the fact that there is no grace period and kinda want to close this card. Should I close it and possibly get the Discover Secured instead? I want to implement AZEO while I rebuild but I also read that it is bad to close an account. Apparently 3 cards is optimal for AZEO. Any advice would be appreciated. Thank you.

BTW my FICO8 EXP today is 636 with 14% utilization reported at the beginning of this month.

[credit_is_crack]

Welcome to the forum @Grandeflipper and solid job taking action to get back on track.

Regarding the Credit1 card, they are what some call a predatory lender (high fees for minimal return), but you’ve already paid the AF so I would recommend just keep it open and don’t use it. Audit the account to make sure no funny business pops up (they might have a monthly maintenance fee and if so pay it off early). Once the next annual fee comes around, then close it out - your score should have jumped quite a bit by then if you’ve already gone from 545 to 636 with just your recent changes.

Is the Discover secured a better option than Credit1 - Yes. Should you open that one as well, I don’t think so right now. You’ll just ding your report with another new account and it shouldn’t impact your AAoA much, but the recent activity can be viewed as aggressive by some lenders. Let these bake for 6 more months and see where you are at.

Also check the Discover prequalified tool and see what they offer. No point in chasing a secured card if they are willing to extend you an unsecured one instead. I’d say wait for any more new accounts until you can get you scores in the 670 space.

When you get your scores up to 670 I’d take a stab at the Chase Freedom or Freedom Unlimited. Those can be lenient with underwriting and are very versatile cards (can be changed around to many other Chase cards), but you must be under 5/24 to get them so be mindful of new accounts for the next year. If you decide to get a chase (and other cards), apply for the Chase cards first.

Keep at it - you’re on the right path!

[Anonymous]

Thank you!!! Ive actually read a couple of your posts on the board so you've already helped!!!

I also was able to purchase my first vehicle in March! Thought that was going to be impossible with my credit and was fully prepared with a co-signer just in case but to my surprise, I was approved on my own for the car loan!!! Again, dont know how considering my EQ Fico Auto score was 585. I am paying a high interest rate of 10.99%, 48 month term but with a solid down payment I was able to get my payments to $260/m, which is well within my budget but I auto pay $300 and am 3 months ahead of my due date--I just auto paid 3 days ago and it is saying my next due date is August 10th. I am literally trying to use every tip and trick to make sure Im ahead of the game. 

So as of today, I have 3 revolvers and an installment.

I will definitely look into Chase cards after I garden for a while. I should afterall I bank with them. I actually tried back in February but was declined due to AAoA and high utilization....

[Brooklyn2018]

++1

Good for you, OP!👍👍👍

Credit can be addictive, especially, when you start seeing some real results. You are definitely on your way to reaching your credit goals with moves you are making. Nice job!👍

I have 3 very important things to list to help you on your journey. Whenever possible ALWAYS make at least your minimum payment and:

1.) Never miss a payment.
2.) Never Ever miss a payment.
3.) Never Ever Ever Ever miss a payment.

...if you can help it. Borrow, beg, (don’t steal,) give blood...if you have to.

Best wishes on your journey, OP!!🤞

Hope to see ya in the Garden😉

[Anonymous]

Update:

Hi all! Just wanted to share an update because I am mindblown right now. I recently just checked my FICO scores and this is where I am at:

EXP FICO 8 - 684

EQ FICO 8 - 694

TU FICO 8 - 649

This is totally mindblowing because in August 2018 when I began my rebuild, my scores were in the 490-525 range. I can't believe it!!! I mean, I know they're not "great scores" but these are the highest scores I've ever had....

[PicoFico]

That's really motivational for me!! Thanks for sharing your success!

[Anonymous]

Sounds like you're doing all the right things and undoing past mistakes. Great job, keep up the good work!!

[Anonymous]

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@PicoFico wrote:
That's really motivational for me!! Thanks for sharing your success!

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I'm glad to hear that, and it's definitely motivation for all of us rebuilders--including myself--to keep at it! I always have to remind myself that I didn't get into this mess overnight and I am not going to fix it overnight either.