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Veteran rebuilding credit - advice needed

papermate703
New Member

Veteran rebuilding credit - advice needed

About me: I've been with the same employer, with different jobs, for about 15 years. My FICO score is 544. 

I am a member of and have access to the following services/lenders:

- USAA

- State Department Federal Credit Union

- Capital One

 

I have no credit cards, no secured cards, no personal loans, no student loans, and one account in collections (a CapOne Journey card).

 

What's the best way forward?

 

Message 1 of 9
8 REPLIES 8
pursell1911
Regular Contributor

Re: Veteran rebuilding credit - advice needed

Is the 544 score a FICO score, or one from CreditKarma, or Capital One's score?

 

Capital One is forgiving if you have burned them before, so check some prequal sites to see if you can get a card through them.  Discover, BOA, Amex all have prequal sites.

 

Is the CapOne in collections paid?  When was the date of first delinquency?


Starting 5/2018

Current 3/2019
Message 2 of 9
thornback
Senior Contributor

Re: Veteran rebuilding credit - advice needed

Hi Papermate,  welcome to the forums. 

 

First -- where are you getting your FICO score?  Which bureau is it for?   You should invest in a FICO monitoring service while you're in rebuild mode so you can track your progress.   myFICO is good -  a bit pricy tho.  There is also Experian CreditWorks and CreditCheckTotal.com.  Any of those three will give you your FICO scores for all three bureaus.    CreditCheckTotal.com offers a $1 / 7-day trial that you can sign up for just to get going -- just be sure to cancel before the trial ends. 

 

You're actually not in too bad of shape creditwise as your lack of history can be fixed with time - but you'll probably need to start with a secured card as getting approved for unsecured credit may prove challenging due to your lack of history.  Since you are already a USAA member, you can look into opening a USAA secured card to get started.  The card won't ever graduate to unsecured but a year of use will give you the history you need to obtain unsecured credit from USAA and others.   When I got the card as a member, they didn't even pull my credit to open it.   Your credit limit is based on your deposit amount - which you may increase at any time with an additional deposit.  I started with $500 and kept it as such for a year (I also had no open revolving credit history, only student loans).  After 1 year and 1 month, I closed the secured card, had my deposit returned, and apped for one of their unsecured cards and was approved for 8K.  Your deposit is held in an interest bearing CD that matures in 2 years, but you can close it out before the 2 years if you want.  The accrued interest is nominal.   

 

Check and see what your State Department Federal Credit Union has to offer as well.  Also look into Navy Federal Credit Union - they have been fantastic for rebuilders and your Vet status qualifies you for membership. 

 

You can also look into other secured cards that graduate to unsecured after 7-15 months of responsible use -  cap one (though your cap one collection may be a hinderance depending on the status) and discover are both very good.   You only need one card to get you started; and no more than 3 for now.   After at least 6 months, you can see if you prequalify for unsecured credit with other lenders. 

 

You'll see an immediate score boost from adding your first revolving account.  Keep utilization low, under 8.9% of its credit limit, pay as required, and your scores will increase over time.  Patience... 

 

Once you get the revolving credit in order, you can decide whether or not you want to add an installment loan to fulfill your FICO 'credit mix' criteria.   We suggest shared secured loans for this purpose - you can search the forums for more info on that if you are interested.  While having no installment loan counts against you, it is not required and you can certainly achieve a very good score without one.   

 

As for that collection item: 

Is it paid? 

Is there a charge-off showing on your reports from cap one, or is it a collection from a collection agency, or both? 

What is the Date of First Delinquency (DOFD)? - this is the date (month/year) the account first became delinquent and was never brought current. 

Answers to the above will determine how best to proceed in dealing with it. 

 

 

 

 

 

 

 

 

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 3 of 9
papermate703
New Member

Re: Veteran rebuilding credit - advice needed

CapOne in collections is not paid.

The date of first delinquency was November 18, 2018.

Message 4 of 9
thornback
Senior Contributor

Re: Veteran rebuilding credit - advice needed

 


@papermate703 wrote:

CapOne in collections is not paid.

The date of first delinquency was November 18, 2018.


Oh so it's very recent -- so the account is just late at this point --and placed in their "internal collections", correct?   It hasn't reached a 'charge-off' status yet  (charge-off typically occurs 120-180 days after the first missed payment)?  

 

Are you able to pay the balance due? 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 5 of 9
Singsonbing
Regular Contributor

Re: Veteran rebuilding credit - advice needed

Deleting my reply. I started typing and got distracted and someone else said what I was going to say.

Thank you for your service.
Message 6 of 9
papermate703
New Member

Re: Veteran rebuilding credit - advice needed



@thornback wrote:

 Are you able to pay the balance due? 


 

Yes, I'm paying the balance after the 1st. 

Message 7 of 9
gdale6
Moderator

Re: Veteran rebuilding credit - advice needed


@papermate703 wrote:


@thornback wrote:

 Are you able to pay the balance due? 


 

Yes, I'm paying the balance after the 1st. 


Ok, the account should still be open then. Once it reflects paid off that would be the time to obtain at least 2 other cards even secured if you have to as you need 3 open revolvers to drive your Fico score. Welcome to the board Smiley Happy

Message 8 of 9
papermate703
New Member

Re: Veteran rebuilding credit - advice needed


@gdale6 wrote:

Ok, the account should still be open then. Once it reflects paid off that would be the time to obtain at least 2 other cards even secured if you have to as you need 3 open revolvers to drive your Fico score. Welcome to the board Smiley Happy

 


UPDATE: I paid off the Capital One account in collections, they closed the account, and my TransUnion score dropped more than 500 points.

In fact, both FICO and Credit Karma now say I have *no score*. Por que? Is this normal? It doesn't say 300 or 500 or 550, it says *no score*. 

Message 9 of 9
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