On the slow road to credit repair, but still traveling... could use a little guidance

Discussion in 'Credit Talk' started by Fl2BoysMom, Mar 20, 2015.

  1. Fl2BoysMom

    Fl2BoysMom Well-Known Member

    I joined this forum last year and began my slow journey into credit repair. I don't know our credit scores yet or what's still on our credit reports. I am mailing away for them tomorrow. (When I used one of the online services, I didn't get the scores and one of the CRA's couldn't even verify me so this time I'm just mailing away for them.)

    Last year, we bought a laptop from Sears' "Why Not Lease It" program and we paid that off early just last month, and I think they report to the credit bureaus. As soon as we paid it off, they increased our credit limit to $850 but so far, we haven't found anything we want to buy from Sears or KMart, so we owe nothing.

    This year, I was able to open my first real bank account since 2009 with Wells Fargo and we just got our first secured credit card from them.

    The girl who opened our secured card for us at Wells Fargo told us that her credit score jumped 320 points in a year from having that card and that before she got it, her scores were in the low 400's. She told us that the best thing to do is to charge 40% of the credit limit and pay it off every month.

    We opened it with a $300 security deposit because she told us it would take 14 days for us to get the cards so any cash we used as security would be tied up for 14 days and we were going to a car auction that weekend so we had to have cash available in case we bought a car (which we didn't.)

    Our plan was to put up a $1,500 'security,' and charge $600 (40%) a month of bills (electric, cable, and car insurance) and pay it completely off every month.

    A week after we ordered the secured card, we got an offer for an unsecured card in the mail from Credit One. Their terms are pretty crappy, with a $75 annual fee for the 1st year, and $99 each year thereafter, plus a terrible interest rate... but we figured it's another tradeline. So we called and the gave us a $300 limit, which is at $225 because the $75 annual fee was taken from it.

    We had at first thought that if we got a $1,500 limit on the Credit One card, we would use them alternatively, pay April's bills with the WF card, then at the end of April, pay the WF bill with the Credit One bill, and then charge the WF card again for the next month's bills. But with only a $300 limit on the credit one card, to charge 40% of that balance would only be $120.00

    I want to have a 'careful' plan of what to charge to each card, as a % of the total available credit line, so that I can get the maximum benefit to our credit scores.

    *Also...
    The WF account is joint between hubby and I.
    The "Why Not Lease It" account is just hubby's.
    The "Credit One" card is just hubby's.

    So, with these three tradelines available to me, what is my best course of action in terms of how much I should charge to each, and should I pay them off each month, or keep some amount of 'revolving' balance to show we can make 'payments'?

    *As of right now, hubby is the only one of us with verifiable income, but we're going to change that too.

    Should we:
    Get separate secured cards for himself and me at WF?
    Just get me a separate account from WF?
    Open another joint secured card at another bank?
    And get separate accounts there as well.


    Last year is when my '7 years' was up, (all my debts are passed the SOL for FL) but of course, once you screw up your credit, other things that ruin your credit even more start to creep in and so although most of the worst of things happened in 07, there were some ER visits, etc that happened over the next few years that just kept adding to the detriment of my credit repair attempts, but this year seems to be a major turning point. Getting that real bank account and three tradelines, 2 of them unsecured, has started to make me feel like a human being again.
     
  2. mindcrime

    mindcrime Well-Known Member

    Re: On the slow road to credit repair, but still traveling... could use a little guid

    The card alone is not responsible for such a large jump in score. For optimizing FICO, its best to have 3 revolving credit lines reporting with 1% utilization reporting on one card. It does not matter how much you charge on it, just as long as you only allow 1% to report.

    Personally, I have found that charging cards up to their limit, and paying them off benefited me when it was time for a CLI. It demonstrated to the creditor that you can utilize the total amount of credit they give you, properly.

    I would venture that the WF rep's last negative account rolled off her reports in that time-frame, and that was the reason for the significant boost.


    I'm sorry to say this, but this is an awful card to have. AF is outrageous. APR is high (however this is a non-issue if you PIF every month), but the worst is having a Credit One account on your profile points to past credit problems. This is only in your husbands name, and leave it at that. Don't worry about the whole 40% charging up deal. As I said, as long as you pay the card down within the same billing cycle, it won't affect your scores.

    No reason to do this. It will just tie up more cash.

    Is the Sears account a revolving CC? If so, he already has 3 and is good for now.

    Are you referring to the 7 years negative account information can be reported to the CRAs? Nothing past March 2008 that is negative should still be reporting.

    We'll be able to assist more once you post your credit profile. But for now, at least with your husbands credit, I would allow these new TL's to age. After 12 months (depending again on the rest of your credit) he should be able to qualify for prime cards.
     
  3. Fl2BoysMom

    Fl2BoysMom Well-Known Member

    Re: On the slow road to credit repair, but still traveling... could use a little guid

    Thank you.

    I don't quite understand what this means:

    "The card alone is not responsible for such a large jump in score. For optimizing FICO, its best to have 3 revolving credit lines reporting with 1% utilization reporting on one card. It does not matter how much you charge on it, just as long as you only allow 1% to report."


    Could you explain please?


    The Why Not Lease It isn't a CC, it's a line of credit. We're not even sure if they report to the CRA's, but we'll find out as soon as we get our credit reports.

    Should we just cancel the Credit One card?

    If Credit One sucks and Why Not Lease It isn't a CC or doesn't report to the CRA, should we be looking for 1-2 more CC's (secured or unsecured)?
     
  4. mindcrime

    mindcrime Well-Known Member

    Re: On the slow road to credit repair, but still traveling... could use a little guid

    Let's say your statement period runs from the 1st of the month to the 31st. Let's also say you have a $1,000CL. During that time frame (2nd - 29th lets say, you can charge $995 if you like, as long as you pay off all but 1% of it ($10 in this example) before the statement closing date. Come the following month when this CC reports, your utilization will only report at 1%, not at 99% ($995 on a $1k CL)....and using your card like this should allow you a better shot at future CL increases. Using only a small percentage of your existing CL doesn't justify an increase, as much.

    If you could cancel it AND make sure it never reports on your husbands credit reports, go for it. You may have to eat the $75 AF (though if not activated there may be an "out" clause").

    Yes. Even if the Sears account does report, it's not a revolving credit card. You'll want 3 revolvers. There are lots of good starter cards out there. Capital One has a number of options, Discover offers some people their secured it card if they do not qualify for the regular card. Barclay's has a Rewards card that is easy to get...

    ...however, I would suggest waiting to get your paper reports to you know exactly what you're dealing with before burning INQ's unnecessarily.
     
  5. Fl2BoysMom

    Fl2BoysMom Well-Known Member

    Re: On the slow road to credit repair, but still traveling... could use a little guid

    Thank you! :) Got it.
     
  6. Jackie OMG

    Jackie OMG New Member

    Re: On the slow road to credit repair, but still traveling... could use a little guid

    Capital One has a pre qualify check form that is spot on.

    They do have annual fees.

    I wouldn't close that Credit One just yet if you have to eat the $75. It's a revolving credit line that's aging and has effected your average age of accounts.
    You burned a hard pull to get it.

    It will show up on your credit report.
     
  7. jam237

    jam237 Well-Known Member

    Re: On the slow road to credit repair, but still traveling... could use a little guid

    I'll give a practical example, I just got a new card, had to charge it to the limit for a work related hotel charge; make first payment even before the statement hits, and larger payments right after the statement date. When the card first reported, mega drop (because it was 90+% maxed), now however when it updates on the next statement where all of the charge is paid off, and the balance drops, it'll show an increase (probably larger than the before score).
     

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