OK, here is my semi-story... Ive been working on rebuilding my credit score for about 7 months now... brought it from a 629 to a 688 in that time, and I am steadily climbing. One of the things which doesn't seem to be working out for me, however, is my current credit card. I am using an Orchard Bank credit card, and it only has a $300 limit. I buy some things with it, then I pay it off a week or two later. The problem, however, is that when I buy some stuff, what ends up on my credit report is a 90% utilization rate for my revolving credit. The fact that I get it paid off in two weeks seems to make little difference. That is to be expected, though. My utilization is always over 80% or at zero. Ive even tried buying some smaller stuff and waiting a month. It doesn't seem to do anything. So the obvious answer becomes "Raise the credit limit". Easier said than done... Orchard bank hates giving CLI's, and when they do, they charge you $20 for your application fee or whatever. And even then, it might go up to $500. So my question is this... Now that I am at 688, I am looking for a bit better card that can grow with me, but I am a bit worried about being denied. I don't want to take a step back in points. I've come too far to start sliding now. So... Which cards will better suit me that I could still qualify for? (I am currently at about 25% monthly debt to income)
Hi Fadelight- you've climbed into the "fair credit" range now, if what you're providing us is an actual FICO score. Nice work. Have you checked out the Capital One No Hassle Cash Rewards Credit Card? It has a $39 annual fee, but it does provide 1% cash back (2% on gas and groceries) and is overall a pretty solid card for those with fair credit. The Capital One Platinum Card and Capital One Classic Platinum are other good options as well. It just depends on what you want out of the card. I'm a big cash back fan, so I would say the No Hassle Cash Rewards card is the way to go. I've personally known people with FICO scores just under 700 who have recently been approved for this card, so it may be worth a shot. The low credit limit on your Orchard card is really killing your utilization, so it would definitely be a big help to add some additional credit to lower your overall credit utilization ratio. You're at the point in the credit rebuilding process when you want to start moving away from the Orchard-like cards that are targeted towards those with bad credit anyway.
Thank you very much! 688 is indeed my actual FICO score. I don't really care about rewards or anything like that... probably because I haven't gotten into using credit cards all that much yet. I'm still at the point where I use it occasionally just to help with my credit score. The objective is to be in the "Good" credit range by July or August. If I recall correctly, the good range starts at 700? I have an auto loan that will be paid off by then so that will help. If given the choice between a rewards card and a card with no annual fee, I would much rather have a card with no annual fee. But I will dive into researching the cards you've recommended for me. Thank you for your advice!
I took your advice and went for the Capital One no hassle cash rewards credit card. Solid advice, I must say... and I can't thank you enough. I was approved with a $2,000 credit limit and 17.8% apr after the introduction period (The lowest APR they offer on this card)! I think this will help me immensely toward my final goal!
Awesome! I love hearing good news- thanks for coming back and letting us know. The additional $2,000 credit limit should really help your FICO scores over the next few months as your credit utilization ratio will immediately drop. Target 10% or less for your overall CU ratio, keep paying your monthly balances off in full and on time each month, and I bet you'll be in the mid 700s soon. Once you hit 750ish you may want to think about adding another no annual fee credit card with rewards (cash back/miles) to your credit mix. Hope to see you around the forum often. Keep us updated, and once again- nice work. Have a great weekend!
My reaction is to also leave the Orchard Bank card in a drawer. don't use it. But don't cancel it at present because it lengthens your credit history.
Im planning on hanging onto it until I go for a car loan in May, but I will be cancelling it after that. No point in paying the $39 annually if I'm not using it. Another question... Will it make any difference to my credit score if I am paying the card off in full once a week vs paying it off in full once a month?
What makes a difference is if you're paying off the balance prior to when your credit issuer reports to the CRAs. It doesn't really matter if you pay it off every day or if you pay it off once a month - what matters is when you pay it off. If you pay it off a few days before your credit issuer reports, your utilization will be 0. If you just pay it off when your statement is due, your credit issuer will report the balance on your card when the statement closed for the month.
Awesome, that is what I shall do, then. Thank you! Oh and by the way... I was wrong about one thing. My annual fee for the Orchard Bank card is $59. Not $39 as I had previously stated. They hit me with the fee this month. Yay.
Many of Cap 1's products won't grow with you. They are rather infamous for their stuck CLs on their less than prime cards and poor customer service. I don't think I would have suggested them. You might look into Barclay for the future-their Apple card is quite easy to get and their cards will grow w you. Also, GE store cards are known for being generous, particularly w their auto CLIs. Check out the Who Gave Me Credit site to see where you stand on any particular card. Also, make sure you check out those pre-selector sites when you can before app'ing. That'll keep you from unnecessary denials.
The No Hassle Cash Rewards card wasn't a poor choice. It's much better than a retail credit card in my opinion, and I bet you received a much higher credit limit than you would have for a retail card. Recently, I've noticed that Capital One hasn't been as stingy with CLIs too, so we'll see if that trend continues. Please keep us updated on how your CU ratio improves in the coming months and the overall effect it has on your FICO scores. I look forward to seeing your progress.
Another way you can find out when your credit card reports to the credit bureaus is to pull your credit from truecredit.com. Under the "more details" section of each each credit account it will tell you the specific day of the month that you account reports to the bureaus. Then you would know exactly when to pay down your credit card so it will report a zero balance for that month. Thanks! Heather with BoostMyScore.NET
No one said it was a poor choice. They can be a good choice for some. I said if someone says they're looking for a card that will grow with them I would not recommend Cap 1. Most of their products are known to not grow w their user. And don't forget you'll take 3 hard inq hits per app versus one with other companies. They're not called Crap 1 by people for no reason, and I certainly haven't heard about any increased generosity w CLs. Sorry. Barclay has cards, including rewards cards, as do other reputable lenders including CUs, that will grow w you if you behave. GE is very generous w some of their store credit lines, as well as offering regular CLIs. They too will grow with their user. Variety of credit types is good for your score, after all. Regardless, OP app'd for and rec'd Cap 1. MA, I'd eventually move on to a better card that will grow w you if Cap 1 does not. OP-just PIF before your statement cuts. Most cards report a few days after this. Look on your statement or online account, or call them if you're unsure what the date is. You don't need to pull any reports to find this information. It's readily available.
Nice...like I said, I think you'll hit the mid 700s soon as long as you continue to keep your CU ratio low and make payments on time. I look forward to seeing your progress.
