Credit Score goals

[Anonymous]

Hello all, 

Bein my first post I would like to introduce myself! My name is Chris and I am 18 years old, and since I turned 18 I generally started to understand the credit world a little bit more as I had more reasons to be experienced with it.

When I was 17, I had a bank account with my local credit union, and I had Overdraft on my card, which I really didn't understand until I realized that when I had my card linked to auto-renewal services such as Netflix and Spotify, That my card ended up racking up to $500 overdraft charges until my account was closed. When I turned 18, last month I realized there was a negative inpact on my credit score, from the situation that I had no idea about until I was 18. 

My score dropped 50 points because of it, bringing my one month old credit score from 544 to 494 which ist pretty upsetting. I do not know whether or not I should get another Secured Credit Card (Which is what I have no through Capital One), Or just stay with one card and allow time to have some affect on my credit score. What would be the best solution to bring my score up as high as possible?

On my current card, I have used 168/200 Credit Limit, which I intend to pay on Febuary 6.

[azguy13]

---

@Anonymous wrote:

Hello all, 

Bein my first post I would like to introduce myself! My name is Chris and I am 18 years old, and since I turned 18 I generally started to understand the credit world a little bit more as I had more reasons to be experienced with it.

When I was 17, I had a bank account with my local credit union, and I had Overdraft on my card, which I really didn't understand until I realized that when I had my card linked to auto-renewal services such as Netflix and Spotify, That my card ended up racking up to $500 overdraft charges until my account was closed. When I turned 18, last month I realized there was a negative inpact on my credit score, from the situation that I had no idea about until I was 18. 

My score dropped 50 points because of it, bringing my one month old credit score from 544 to 494 which ist pretty upsetting. I do not know whether or not I should get another Secured Credit Card (Which is what I have no through Capital One), Or just stay with one card and allow time to have some affect on my credit score. What would be the best solution to bring my score up as high as possible?

On my current card, I have used 168/200 Credit Limit, which I intend to pay on Febuary 6.

---

First of all, Welcome to the Forum! 

What collection agency holds the debt from the overdraft charge? Since it has not been paid, I would try a PFD (pay for delete). Another issue you have is that your utilization is at 84%. While you do not owe a lot of money, the algorithm still reads both the tradeline and all available credit as 84%. Your target range is about 1-9%. 

Edit: You will find that the more you look around the forum, the more abbreviations you will find. Here is a little guide to help you out:

http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458

[Anonymous]

UPSTATE COLLECTION CENTER

I'll definantly bring down my Credit utlization down a bunch.  Would it be wise for me to get a secured card now, Or bring down my utliization and then hope to get a Credit Card from lets say Chase Bank which I already have a checking account with?

[azguy13]

---

@Anonymous wrote:

UPSTATE COLLECTION CENTER

I'll definantly bring down my Credit utlization down a bunch.  Would it be wise for me to get a secured card now, Or bring down my utliization and then hope to get a Credit Card from lets say Chase Bank which I already have a checking account with?

---

With your current score, I do not think Chase would approve you for much. In my opinion, you should get your Utilization down which will raise your score a bit. Then apply for a card through Capital One. I have found (through the forum and personal experience) that Cap1 is one of the best, if not the best rebuilding lender. 

I have not dealt with Upstate Collection Center but if you are able to succeed in a PFD (offering to pay the debt only if it is deleted from your reports) then it should put you in a nice place to grow your report. This is the order I would go: 

1.) Try a PFD to remove the baddie

2.) Get your Utilization down to 1-9%

3.) If you succeed in both, see where your score is and you may qualify for an unsecured card. If you can only get your UTL down, apply with Cap1. Honestly, you won't know what the right answer is until you know f you can get that baddie removed or not and where your score will be. You will still have a very thin file so Cap1 will most likely be your best bet. Are you a member of any other Credit Unions?

[Anonymous]

Chase is now the only bank that I have.  Thank you for the information, It's kinda crazy that I was able to hurt my credit when I was 17!

[azguy13]

---

@Anonymous wrote:

Chase is now the only bank that I have.  Thank you for the information, It's kinda crazy that I was able to hurt my credit when I was 17!

---

It has happened to the best of us. The nice thing is that you are still young and it is a relatively easy fix. A lot of people have 15+ negative tradelines they need to get removed. You only have 1. Don't be too discouraged. 

[Anonymous]

How's the best way to approach PFD?

[Anonymous]

Hi Chris!  Welcome to the forum.

The first thing you should absolutely do is to become familiar with your credit reports.  These are different from your credit scores.  A score is a number, typically between 300 and 850.  The report is a collection of information about your credit history and current credit profile.  There are three different credit bureaus that contain this kind of information: Equifax, TransUnion, and Experian or EQ, TU, and EX.  

You are young and would therefore likely benefit from credit monitoring tools that are free.  The one I would suggest you try is Credit Karma.  It will allow you to pull your EQ and TU reports at no cost as often as once a week.  You should print out your two reports and go over them carefully.  The overwhelmingly important things is to find out whether you have what are called Negative items, also called Derogatories.  Make sure you google things like How to Understand My Credit Report. 

I didn't completely follow your explanation of what happened when you were 17, but it sounds like you may have run into trouble with both a credit card and also a bank account (either savings or checking).  If you ran into trouble with the bank account (overdrafts, the bank closing the account, etc.) then you should also pull your reports at ChexSystems and Early Warning Services.  They are bureaus that specialize in information on consumers bank accounts.  You may have negative data on those two reports, in addition to EQ, TU or EX.

If you have any derogs, you should make a list of these and then head over to the Rebuilding forum on this site.  Make sure that you make a list of the derogs for each bureau.  Explain what the derogs are and then explain exactly how they happened.  Don't feel like you have to apologize -- lots of people here have made far  worse mistakes than you did.  I encourage you to draw the attention of the Rebuilding folks to exactly how old you were when these things happened.  It's possible that rules are more lenient on getting negative items removed from your reports if you can show that they happened while you were a minor.

While you are working on pulling and understanding your reports, I encourage you to pay your credit card debt off completely.  Pay it down to $0.  After that, you should charge something small on your card once a month and keep your balance constantly very low (between $5 and $15 -- never higher than that).  Use a debit card for any other expenses.  In a years time, you can gradually begin learning how to use your cards for more things, but right now you want to protect your score.  A very low balance will make the credit scoring algorithms very happy.

As far as getting a second card, discuss that with the Rebuilding folks too.  I think that would be a good idea, but get their take on it.

[Anonymous]

Hello Chris, and welcome to the forum! Good job taking control of your credit health so early!

---

@Anonymous wrote:

I encourage you to pay your credit card debt off completely.  Pay it down to $0.  After that, you should charge something small on your card once a month and keep your balance constantly very low (between $5 and $15 -- never higher than that).  Use a debit card for any other expenses.  In a years time, you can gradually begin learning how to use your cards for more things, but right now you want to protect your score.  A very low balance will make the credit scoring algorithms very happy.

---

This ^^^

This is some of the best advice you'll ever get. If you follow it for now, add cards slowly after a year, and never carry a balance, you could have a better score by 21 than many people will see in their entire lives.

[SouthJamaica]

---

@Anonymous wrote:

Hello all, 

Bein my first post I would like to introduce myself! My name is Chris and I am 18 years old, and since I turned 18 I generally started to understand the credit world a little bit more as I had more reasons to be experienced with it.

When I was 17, I had a bank account with my local credit union, and I had Overdraft on my card, which I really didn't understand until I realized that when I had my card linked to auto-renewal services such as Netflix and Spotify, That my card ended up racking up to $500 overdraft charges until my account was closed. When I turned 18, last month I realized there was a negative inpact on my credit score, from the situation that I had no idea about until I was 18. 

My score dropped 50 points because of it, bringing my one month old credit score from 544 to 494 which ist pretty upsetting. I do not know whether or not I should get another Secured Credit Card (Which is what I have no through Capital One), Or just stay with one card and allow time to have some affect on my credit score. What would be the best solution to bring my score up as high as possible?

On my current card, I have used 168/200 Credit Limit, which I intend to pay on Febuary 6.

---

1. If you haven't paid off the overdraft, be sure to pay that off now.

2. Pay your credit card down to zero, then use it mildly, paying it right off over and over again, before statement cuts.

3. Don't apply for new cards until your scores get higher.