First a little history. I lost my business 6 years ago and had to file bankruptcy which was discharged 5 years ago. Since then i have had 1 collection on my credit and that is it but there is still stuff showing prior to the bankruptcy that was discharged in the bankruptcy. Anyhow i have simply been living by the cash only and no need for credit line of thinking since, until last month when we wanted to look into a mortgage and were denied because i dont have a history of payments since my bankruptcy. Anyhow i did get a pre approved capitol one credit card app a couple weeks ago in the mail and applied for it and got a $300 unsecured limit card. So i plan to use about 10% of that available balance per month and pay it off each month (or do i need to leave a small balance on it each month?). This brings me to the sears card. Our freezer is dieing and i was thinking about getting a sears card instead of paying cash for the freezer. Question i have is, is it worthwhile to do this to help my credit score or will it hurt it more than help it at this point? BTW my credit score as of a few days ago pulled through credit karma is 620. Also will i get accepted for a sears card with that score and how much of a score drop would i expect for the credit inquiry for the sears card? Thanks for the input in advance.
No - never leave balances on your credit cards. Pay them off in full and on-time each month. It's simply a credit myth that leaving a balance every now and then will help improve your credit score. That's definitely not true. Also, the hard inquiry for the Sears card would probably drop your score 5 points or so, but then it should pop back up again after a few months. I actually suspect you wouldn't get approved for the card with a FICO score in the low 600s; however, it wouldn't hurt to ask beforehand what kind of credit score they are looking for. I may be wrong. If you can get approved for the card and end up utilizing it to finance the fridge, make sure you pay the full balance off well within the 0 percent interest time frame. And yes, your on-time payments should all be reported to the CRAs and would help improve your credit score.
