Hello all, Here's my situation. I've been working on my credit and raised it from about a 475 to a 615 in the past two years. Right now, my biggest problem is high utilization. I've requested CLIs to no avail. However, my credit union, with whom I have a $2500 Visa Platnum card, said that if I pay off three old collections, they would be able to give me a CLI. Two of the trade lines are for small amounts from 2004, one is from Walmart and one is from Von Maur for a sum of about $50-60 total. The other one is from 2006 for about $370. My questions is is it worth it to pay off the collections and get the cli from my credit union? Or should I wait for the two smalls ones to fall off next year and in the mean time try to get the other one removed? Also, I was wondering, I have a friend that may be willing to put me on one of her cards as an authorized user. She's 45 and has several old lines. Would the positive impact on my FICO justify asking her to do this? Thanks!
What I don't understand is why people want more credit these days with the economy the way it is. Do they really believe the recession is over and we are soon to be back to the same old game all over again? If so they need to think again. One of the key factors that drive any economy is home building. Yes, we had a brief uptick a month or so ago but that fizzled out real quick. We have seen some recent figures stating that the jobless rate is decreasing by a tiny bit but what we don't see is any notices telling us that the true unemployment rate is actually at about 26% nationwide and not likely to do anything but get worse in the near future. Not even the massive bailout could change the picture by any appreciable amount. Before we get done with this mess a few years from now we will see unemployment rates somewhere close to the 50% mark. Imagine that! Half the workforce will have no jobs. And that isn't even the tip of the iceberg. Every economic indicator in the world is constantly flashing red. Lenders are simply not lending money and with good reason. They know what is coming around the corner at them and and they know that if they lend out huge amounts of new credit they are likely to lose most of it soon enough. They are hoarding cash and that is what you need to be doing too instead of thinking about how you can get more credit. And then you think about taking a big chance with your friend's credit ratings on top of that? Boost your score so you look like a better risk than you are, run up a bunch of debt and then get laid off at some unforeseeable time in the future? If you want to ruin a good friendship that's a great way to do it. Best you do what most people are doing now and that is to hoard as much cash as possible. That's what I'm doing. Cutting back on unnecessary expenses and trying to hoard as much cash as possible. Believe me, it isn't easy to do.
I wouldn't pay off those old collections either. If you do they will get reported as recent collection activity and that will dump your score back in the dumps again. Let them fall off and then your score will increase instead of going back downhill. Believe me, it is well worth the wait.
Let me tell you how bad the economy really is. The economy is so bad I just got my first pre-declined credit card in the mail today. The economy is so bad Motel 6 can't afford to leave the lights on anymore. (LOL) The economy is so bad that McDonald's plans to introduce their new quarter-ounce hamburger next week. (LOL) The economy is so bad that the Mexicans are now chasing illegal Americans sneaking into Mexico. The Economy is so bad that the banks and oil companies are firing all their congressmen. The economy is so bad that Hot Wheels trucks and cars are selling faster than Chevys and Fords.
Acutally, the reason that I want more credit is is not to run up more debt (I've got plenty of cash), I would like to decrease my utilization, however for the time being, paying it off will not be an option because I had to take a bit of a pay cut in my current job. The reason I took this job is because of the growth potential and am on track for promotion soon, so it will pay off in the end. Secondly, if I were to ask my friend to add me on to her account, she would not be giving me one of her cards, so therefore I would not be charging to her account (and thus runing up debt). As I mentioned earlier, I'm not looking for more credit in order to charge more, rather to give me a leg up until I can start paying it down. As far as taking a risk with her credit, correct me if I'm wrong but adding me shouldn't affect her so long as I'm not charging to the account. And in any case, my rating is the same or better than hers however she has a few lines that are much longer mine (I'm 25, she 45) and thus that would help the problem of not having a long enough credit history.
Congrats on increasing your score, but I'm sure you'd like to see it much higher! If your friend adds you as an AU to an old card with low utilization, that should give your credit scores a nice boost. And no, it won't put her credit score at risk, as long as you have no ability to make purchases with the card. Combine that with paying down the debt you currently carry on your credit card, and you should be able to obtain a low enough credit utilization ratio to really help your scores improve. Shoot for lower than 10 percent.
Thanks! Do you think that it would be worth it to pay the old collections to get a CLI from my credit union? Two of the collections will fall off in about 1-2 years, so any hit that I would take for recent activity on a collection would be short lived. Also, when I opened this account, I got $2500 as a poor student, and my income has increased segnificantly since then. Add that to the fact that I've been a member of the credit union for about 20 years and I've never had a 30 day late with them and I'd imagine that I could probably get a pretty good increase. What do you think?
You have plenty of cash but paying off your debt is not an option??????? Well, I'm no expert on this kind of stuff but from what I've heard if either of you get behind both of your scores suffer. Somebody else will have to say whether that is true or not. [/quote] And in any case, my rating is the same or better than hers however she has a few lines that are much longer mine (I'm 25, she 45) and thus that would help the problem of not having a long enough credit history.[/quote]None of what you are saying here makes much sense to me. I can't say why I feel that way, I just do.
Yes, I've got cash, however, paying it off is not an option right at this time because as I mentioned, I had to take a pay cut to take my current job. Although I know that I will be getting a promotion and thus a raise at some point, I do not know when. As such, I need liquid assets in the event that it is later rather than sooner. " And in any case, my rating is the same or better than hers however she has a few lines that are much longer mine (I'm 25, she 45) and thus that would help the problem of not having a long enough credit history." As far as what I mean by this is that she has a few lines of credit that have no derogotories that have many many years of history. The reason my score is currently higher than hers is because she had recently had one account go into collections. Obvisously, I would not have her add me on to that one.
Yes, I would pay off the old collections if they are valid and you know exactly who you owe the money. But my point remains the same - focus on paying down whatever balance you're carrying first instead of just getting a CLI. Also, if your friend just had one of her accounts go to collections, I would be extra cautious about getting added to one of her cards. While you're not responsible for her debt as an AU, you don't want to have your name associated with any cards that get behind on payments, have maxed out credit limits, etc.
