What's My Best Option at Rebuilding Credit?

[Gail752]

After being unemployed for two years and having to default on several credit cards, I recently got a new job. I've been working on paying off old cc debt and my credit score is slooooowly rising!

I applied for and was approved for two credit cards (thanks to this forum)! One is an unsecured card ($1100 limit) with Walmart (requested at checkout cart) and the second is a secured cc ($500) with a bank.

In reading the forums, in order to build my credit, I've read two different payment approaches. I want to make sure I understand which would be best to keep my FICO score increase rising. I plan on only using them for basics (groceries, gas). One strategy discussed is to pay off the balance in full every month. The second strategy is to pay down the balance but to keep a small balance (~30% of total owed) so the bank doesn't close or reduce your credit limit (since they are not making any money on you). As I will be using the cc's for basics paying the balance in full shouldn't be a problem.

Does anyone have any experience in either approach in rebuilding their credit (and their credit score)? My current score is 594 @EQ, 614 @ EX and 616 @ TU. Thanks!

[egscoach]

Hi Gail,

  Congrats on your Walmart card.  I am also attempting to rebuild.  TA and EQ are killing me at 679 and 680.  May I ask...what does it mean you got Walmart at checkout?  Did you buy something and get approved at checkout?  I ask because I am petrified to apply for anything.  I tried two years ago without knowing my scores and got turned down by Barclays.

[Gail752]

Yes that is exactly what I did (and I found that tip in this forum). I, too, have been afraid of applying for credit. Twice in the recent past, I applied for a secured card with Capitol One and was denied. However, I wanted to buy something from Walmart and it cost $100. They had an offer for $25 back if you applied for the card and were approved (and obviously bought the item). So I bit the bullet and hit "apply" at the checkout. I was approved instantly. Now I will add (and I'm sure I missed the fine print) that it is only to be used at Walmart - it is not a Visa or MC. One last note, Walmart may be having a promotion of some kind because in this past Sunday's newspaper flyer, they dedicated an entire page to promoting their credit card (along with no interested for so many months on certain items/amounts).