Increasing Available Credit to Improve Utilization Ratio.......

[Anonymous]

Hello and thank you for your help and advice!

Well some years ago, I had a pretty bad credit situation. I was a 480, but am now somewhere about 660 (TU from myfico.com). Not good but just starting to try and correct this situation.

So, I applied for that secured Cap One card and have the measly $200 credit line. But, after just some months of good payment history, my FICO seems to have picked up a bit.

I know that some part of the score is the utilization ratio of your credit card balances to credit limits as listed on your credit report. It would seem to be beneficial to increase the total line of credit, right?

If I were to add $1000, would it be best to add it to the amount on the Cap One card, or open a second account with that Orchard Bank card and just add it to the initial deposit on that second card?

Or is there any other card that I might qualify for better than those cards? I would really like some kind of reward card. Is it possible with my situation??

I am serious about paying off my balance every month and establishing good history.

[Anonymous]

First of all, 660 isn't that bad. I was lower than that when I got my first unsecured Cap1 card.

At this point, I would consider only unsecured cards if I were you. There are many sites (including this one) that will let you look at current card offers, and what kind of credit scores typically qualify. Plus, if you get declined, you can always call and ask for a recon. I would carefully select the best card you think you can qualify for and go for that. Remember, each card you get stays with you for some time, and you probably don't want to be saddled with a bunch of sub-primes in a few years when you qualify for better cards.

How old is the Cap1 you have now?

[pipeguy]

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@Anonymous wrote:

First of all, 660 isn't that bad. I was lower than that when I got my first unsecured Cap1 card.

At this point, I would consider only unsecured cards if I were you. There are many sites (including this one) that will let you look at current card offers, and what kind of credit scores typically qualify. Plus, if you get declined, you can always call and ask for a recon. I would carefully select the best card you think you can qualify for and go for that. Remember, each card you get stays with you for some time, and you probably don't want to be saddled with a bunch of sub-primes in a few years when you qualify for better cards.

How old is the Cap1 you have now?

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+1 agree

At 660 you should be able to get various unsecured cards from Cap-1, Orchard, Amazon (GE), walmart (GE), etc. Get 2 or 3 cards (don't go app crazy) and PIF every month. You'll see a good improvement in 6-12 months. 

[Anonymous]

Ok great! I will start searching for some unsecured cards. I will always pay the balance in full. In fact, I will probably pay any transactions off every few days. It doesn't take long.

Can you recommend any particular cards that I might qualify for? There just seems to be so many... I assume the Venture One card would still be out of my league right? A card with a reward program would be a plus. Especially airline miles. JetBlue services everywhere I go often but I don't think I could qualify for it either...

I've only had the Cap One card for about 6 months or so. But, I will likely be looking to apply for a mortgage later this year so I wanted to handle the credit cards now so that they will show positive payment history that's somewhat aged.

[AndySoCal]

What is your current utilzation percentage? Also, on Your credit report it will tell what is negatively influencing your score. The reasons are in order of impact.

[Anonymous]

First off, learn about how util works and what it means by reported balances from this website. 2nd, I would recommend putting extra money into your secured card, not to help util, as once you understand util you can mange it, but so you have higher limit reporting so when you app for cards you will hopefully get higher starting limits. You should plan on getting 2 more credit lines open which should actually make your score go up. Once the new lines report, depending on where your score is, you should wait 3 months if scores are good or 6 months if not good enough. At that point, app for 2 or 3 more cards which are more ideal for you. Cancel the secured cap one card or product change so you get your deposit back. Then back to garden. Consider a credit card from credit union. Local cu is good if there is good local one. You can walk in with your credit report and score in hand and talk to cu lending officer and ask for advice and likelihood of approval before even applying. Stay with no af fee cards for this rebuilding period unless you love the card so you can keep card open at no cost long term. Personally, I would recommend looking at Amex sooner than later for membership date purposes and I the non util aspect of charge cards. Also, don't use the tu fico score from this website, it's old fico scoring model and not really used. Buy the equifax fico score for more accuracy of score assuming your reports are same/similar. Careful with managing inquiries during your app spree. For example, I would stay away from cap one as they tend to create inquiries on all credit reports for marginal accounts as opposed to just pulling single bureau.

[Anonymous]

Personally, I would do the extra deposit and let it report. Do Walmart card if they are near you (maybe ever Walmart discover but I forget their lending requirements). Walmart card is decent about auto and soft cli if ou use card and just as important, a free monthly fico tu08 score. 2nd, I would find local cu to get credit card with. Should be able to find cu card with lowish apr, rewards, no af, and hopefully you can negoiate decent cl. Where are you located? Might be able to recommend some to check out. With the cu credit card and Walmart, I would consider apping to Amex for zync card as well. Low af and you are probably okay for approval given good income. Wait the 3-6 months, then I bet you will be sitting with around 700. At that point, of for one more round of apps to get rid of secured card and get more ideal cards.

[Anonymous]

Andy and Crashem, I did not seethe replies until this morning and last night applied for the Capital One Cash Rewards card and was instantly declined.
Credit Karma suggested the card and said there was a Fair or Good chance I would be approved. Turned out to be a mistake... there's a hard pull.

Furthermore, I applied for the Chase Freedom card. It was also declined. I called for a reconsideration for good measure and was still declined.

Andy,

I guess that depends on how you look at utilization (and I don't know how it's figured). If you are talking about my current available credit on open accounts, it's 0% basically as the I pay the Cap One charges in full about every week. BUT, if you are talking about old debt factored into that ratio as well, then there are 2 secure credit cards I defaulted on about 5-6 yrs ago. I know they are the main thing hurting my score but are they part of the utilization ratio? That was the past and some time ago and many things are different and am now serious about building positive history and keeping it that way.

Crashem,

I looked into the only Credit Union that I know of in my area (Daytona Beach) and found this on their website: "With a minimum deposit of $400 to a dividend-bearing Security Share Account, a VISA Card will be issued with a limit of 75% of the funds pledged in that account. Once your credit card account is established, you can increase your credit limit once every six months by depositing to the Security Share Account.  See a loan specialist for details."

I will go in and speak with them but I'm doubting they will approve me for an unsecured card.

What are the real advantages of a credit card through a credit union? Specifically in my situation of most likely only being able to acquire secured cards... Unless there are some other unsecured cards that you may know of that are more lenient that I should try first.

Because I guess my next step is the Orchard Bank secured card or through credit union. But, if I do add another secured card and want to deposit $1000 to show a better credit line, should I put the $1000 on the new card or split it and also increase the capital one?

I don't know where to go from here...

[Anonymous]

With your current score, the right cu will give you unsecured card. The whole point of local cu is to walk in with your report, score, and income and ask their opinion before ever applying. Let me look up some cu for you to look at. There are some national cu that you have good shot with but you can't do the walk in thing. As for you applying, what the hell are you doing? Trying to give advice here and you aren't taking it. You lowered your score by applying for no reason. I never would have done cap one as they pull every bureau. The chase wasn't smart either, but at this point call for recon. No harm and if you are convincing, I think you might have chance for successful recon.

[Anonymous]

Sorry about chase, call back and try again for recon.