Effect of first CC

[Anonymous]

I had very good credit 7-8 years ago, good limits, always best rate on loans.

A forclosure (which I bought back 3 months later, no sherrif's dale) and a whole bunch of baddies later I am in pretty bad shape.  But I started rebuilding and I am now down to a few, but significant, problems.

I have 3 judgments. the lowest of which I am paying off now.  I also had a state tax lien, but my prospects of getting that off are slim.  I was from 2009 and paid in 2009.  The rest of my baddies should be gone by next spring regardless. 

Other than my mortgage, I have no open lines of credit.    We have been a cash only family for the past 5 years.  Cars paid off and in good shape.I would like to move in the next year or two and need a mortgage.

I am thinking of dumping my bank, joining a large local CU and trying to get some sort of CC through them while I go after the lats 2 judgments.  I should have all judgments satisfied by Jan or Feb.

I have good income, been with a Fortune 500 company for 4 years in an extremely solid position. 

A CC should be my next move right?  I am plannin on joining the CU this week and seeing what the can do.  If I get a card, what sort of impact can be expected.  Assume 6 months from now, no other baddies and on time payments with <9% utilization.

I currently don't know any of my true FICOs, although my understanding is the CU will prob pull one.  I might get an idea from at that point where I stand.

[Booner72]

The state tax lien can possible be deleted by the state now that it is paid.  Call the Dept. of Justice or go online for info in your state.  This is a new thing the govt. has come up with.

[lpayton]

I too had no new revolving or installment debt, and when I applied to Orchard bank I was approved for a 300 credit line, it began reporting immediately after receipt, and it improved my score 30 points.  That was with $40 utilization. I went from a 612 to a 648 immediately.

I also applied for the Capitol One platinum (secured) card, approved with a $49 deposit, and $200 line.  I would have never gotten the stupid card through CRAP One had I known what a gigantic pain in the a$$ they are. (3 way calls with them to my bank, taking FOREVER to report to the CRA's, takes FOREVER for payments to post, and CSR's that barely speak English and are impossible to understand.)  So, my advice, yes get the card...but go with Orchard Bank (HSBC). 

Also, you spoke of a local CU.  I would advise taking a small secured loan.  Mine gave me a $500 secured loan, I pay $51/month for 10 months and then get the $500 released to me.  Shows payment history that isn't just revolving.  It hasn't given me a huge boost, but I am only in the 3rd month.  I figure after 6 months or so of ontime payments it will have more of a positive impact. 

Lastly, get on the "Score Simulator" on MyFico.  Play around with it.  It guessed I would get a 20-30 point increase with a new credit card, and it was correct. 

Good Luck.

p.s. for an indication of how quickly you can raise your scores, check out my signature line.  I started in July with mid 500's and have raised them all drastically by just doing PFD's with collections and getting a couple new lines of credit. 

[RobertEG]

FICO is a risk scoring analysis, and puts heavy emphasis on how you use discretionary credit.  By discretionary credit, I mean credit that you determine, up to an approved limit, how much debt you are going to create.  Revolving credit.  Revolving credit is both discretionary in the amount of debt you build up, and is the first type of debt that a consumer will likely become delinquent in payment.  Mortgage and car come before the CCs.

For example, your % util is weighted much heavier with respect to your use of revolving credit than your use of installment loans.

It is difficult to rise into the higher FICO brackets without having revolving credit in your file.  Until then, you are scored as having a "thin" credit file.

It is thus, in my opinion, a very smart rebuilding step to get revolving accounts into your file.  To use a credit union to obtain revolving credit is a great source, as having a relationship with a CU will benefit in most of your future credit needs.

[Anonymous]

I guess I put the cart before the horse.

I need to actually be able to join a CU.  I find some use Chexsytems, most all pull hards, etc.  I am now pretty certain that I won't be able to get in with any CU until I can take care of the outstanding judgments that I am working on.

Does income mean anything to any of the big CUs?  I am a PA res so I was thinking about PSECU also.  I know no Chexsystems with them, but a hard EX.  I do have good income.  I am thinking I might have to go to someone like Orchard

I have managed to get rid of over half of my baddies, so I am headed the right direction at least.  Like most rebuilders, I am probably too impatient.  I know what needs done, I just want to get it done.

[chasmith]

Do you know you have a problem in Chexsystems?  You can request an annual free copy of your report from them (they are subject to FCRA).

If you start by opening an account at a CU (no extension of credit) you may be OK, they're looking for irresponsibility like bad checks, not just credit score.  You could research your local CUs, and speak to someone in a branch before making the application, to see whether your circumstances would be likely to deny you an account.

[Anonymous]

I didn't know about Chexsystems until last week.

One of my baddies is the most recent, from last year.  We closed our checking moved to another bank. 

I now see there is collection there for less than $40.  We thought we left a balance just to have it open.  Turns out so far we had something come in, maybe an autopay, we don't remember anything  bouncing, but it got submitted twice then hit with a daily overdrawn fee and voila, from $6 positive to -$125.  I had a final expense acct deposit go in for $90, so I thought I had almost $100 there.

So far I disputed (verified), DVed the CA (sort of validated but at least found out the OC and got some statements).  Now I am GW to the OC bank, it is not sold but assigned.  My family and I have had a lot of accounts there over the years, my dad still does.  I had a business acct there at one point that ran $200K a year through there.  I am asking them to recall the balance and delete negative reporting.  I am afraid it is at Chexsystems though .  I ordered that report last week, waiting for the mail.  IDK if that's all it takes to get denied or not.