My credit file is rather stagnant is is floating in low to mid 600's due to only one positive trade (current mortgage, no lates in 18 months) and some derogs in the form of a very small CC written-off for $26. I'm going to get some positive trades going in the form of secured card(s) and/or some authorized user trades. Will one give me a better impact than the other? On secured card, is Bank of America Secured a good shot even with some outstanding derogs on file? Thx
Yes, AU accounts. It's instant credit history. Become an AU first. Multiple cards if you can, it may very well be the difference between a secured and unsecured CC or a $500 and $5k credit line. Make sure the AU account is perfect history, and that the balances are low (no higher than 20% utilization) and that it's reporting before you apply on your own.
Gonna go with some AU accounts from an online service since my relatives have scores like to be in the negative numbers. Any recommendations on how many, how large? Thanks.
Since you're purchasing, I would "guess" the larger the CL and the longer the history, the more it's going to cost you. If there is no ceiling to your purchasing ability, I would suggest 3 TL's with at least 10 years history each and $10k or higher CL's. Once they're reporting, try for a card that doesn't need a manual review (like a CU), because potentially the UW will see all AU accounts, no joint or individuals and realize your score is inflated by them and start you lower, or of course there's always a potential for a denial. You will probably need to keep these AU accounts around for a year or so, though. New creditors will do Account Reviews on you (AR-soft inquiries) several times especially when the account is fresh. You would have high potential of being flagged if 2 months later all those accounts disappeared crashing your FICO a hundred points, and potentially having adverse action taken against you.
Good point. I am in a cash position to buy big TL's with HUGE CL's (not that I wish to waste $$) but am worried about what happens if/when those trades delete and/or an UW scrutinizes, then what happens. I think most AU's stay on for quite some time, but no guarantees. I wonder what new creditors will do if FICO drops, yet there are no derogs, lates, etc.? I suppose even if they drop the CL or other, as long as there's no derogs or excess usage, it still wouldn't really be negative. Am I missing something?
I suppose you would have to discuss this with the company you're doing business with. The AU account can stay or go depending on them/what is in your contract. IDK if it's a one-time fee or monthly, or what. BUT I would suppose if it's monthly, they'd be pulling the TL back soon after you stopped using them. The dropping of the FICO score could trigger your account to be flagged on a regular AR. Under manual review, with "a substantial portion" of your positive TL's gone, the creditor can decide to CLD you.
I am curious what is considered a huge trade line? And what is the going rate for adding someone to said trade line?
