Yet another friend (geez people see Citibank and phony AMEX cobalt in my wallet and think I'm the expert) needs help! Her situation is she has about three delinquencies on each credit report, and she is disputing. She has the following cards and makes $20,000 a year. She has been on the job 2 years and pays no rent, as she still lives with her grandparents. She wants to know if this is too much! 1) Target: $200 2) Citibank student: $1,000 3) Capital One: $500 (secured) 4) Capital One: $500 (secured) 5) FCNB: $500 (secured) 6) Sterling: $600 (secured) 7) CCB (ick!): $750 8) Orchard: $500 (unsecured) 9) Centennial: $500 (secured) 10) Future Card: $500 (secured) This is $5,550 in credit and she may make the secured cards grow. Is she out of control? She owes less than $1000 on these. Will this number of accounts kill her score? Is this too much credit for her? She got most of them this month. Thanks! Steph
One consideration would be the huge amount of money she's paying in fees. I suggest that she keep two or three secured cards: One of the Cap One cards, FCNB, and possibly Sterling. CCB and Centennial are unnecessary. She only needs to keep Target, Citibank, and possibly Orchard among the unsecured cards. Four to six accounts are enough to rebuild with. She needs more time, not more accounts.
Patience and discipline build credit. Credit should be used responsibly and at the least possible cost. www.creditsense.com
She says the reason she opened all those cards is so she could get as many unsecured credit increases in 4-12 months as possible. She is very seriously considering closing the two First Premier cards. Steph
1) Target: $200 2) Citibank student: $1,000 3) Capital One: $500 (secured) 4) Capital One: $500 (secured) Good, workable cards. As long as all her credit is good, the total number and type of cards is excessive. The missing ingredient here is the age of each account. Ideally, you want your accounts to hit 25 months and then cancel. But she has some VERY expensive credit here. so I'd cancel some early anyway. For the mix, the ideal would be to keep the Target for her 1 dept store card (tell her no more dept store cards). Keep the 2 Cap1 cards, use the Exec dept, and combine them into one and get better terms on the 1 that's remaining. (they must each be 6 mos old which is good because you get increases at 6 mos anyway). Keep Citibank. Work the rates and limit. That gives her 2 major cards and 1 dept store card. This is really ideal. __________________________________________________ For these, depending on what their ages are... I might keep Orchard til November/Dec then call retention and see what she can get. Their systems are improving and with fewer cards she might get a more prime card issued. If not, cancel it or keep it til it hits 25 mos. Again... age? The FCNB is interesting because at least the terms are reasonable... but she will have decent credit by consolidating and thus really doesn't need a secured card... Give us the ages and that'll help us better help her... 5) FCNB: $500 (secured) 8) Orchard: $500 (unsecured) __________________________________________________ I'd cancel these immediately. She's paying a fortune! in fees and they're taking up credit she can get with Cap1 or Citibank. Let her know less lines means better lines with fewer cards. She'll have more than she has now in a year if she'll consolidate, cancel, and check her reports to make sure they show closed. 6) Sterling: $600 (secured) 7) CCB (ick!): $750 9) Centennial: $500 (secured) 10) Future Card: $500 (secured) these are the dog cards of the industry. __________________________________________________ If she's dead set on keeping more than the idea 1 Cap1, 1 Citibank, and Target card... then I'd keep either Orchard or FCNB and take all that money she's paying in fees on the dog cards and make sure all balances are paid and maybe increase the FCBN limit. I'd still cancel it at 25 mos regardless. Also, if whe whines and wants more credit, once she cancels all the junk she can apply for another Citibank, combine... etc etc and she'll do great.
