First of all, thank you to all the wonderful people that I've discovered here. I am really enjoying this board. Anyway, wanted to share my experience with CAP 1 and Providian, and ask for advice. As of November *last year* 2 credit history had a repo, about 10 collection accounts, 1 judgement, bunch of 120+ late payments, and no active trade lines except for Neiman Marcus (heh). In November I settled Discover and First USA collection (About 5 grand), applied for Providian..got a classic one in December with $200 limit. Charged $200, paid in full, increased another $100 next month. Charged 300, paid in full, got an offer for $500 line ($99 bucks), mailed it in, got another $200 increase month after. Total=700$ increase in 6 months. Is this typical for Providian? Can I ask for more? Got secured Optima for $500, but they don't report to cb's. Oh well. Now the fun begins - applied for Cap1 classic on the web, got $200 instant credit...and got a card today for $2,000 TODAY! Is this normal? I am very surpised, because my credit reports do suck, however I have never been late and always paid in full in the past 6 months. What are my other options? How do I continue to improve my score/history? (Besides retaining Lexington?).... I really wanna buy a house in 11 months.... and I really like that credit...but now I will use it wisely Thanks!
This is very positive, but if you are planning on buying a house, you are better off closing the small accounts and just keeping the one $2000 limit account. After you buy the house, you will not be able to keep the offers from coming. Profit from the experience. http://www.creditsense.com
Please advise, why am I better off closing the other accounts? I always thought that my report would look better, with 2 more open lines with current payment. Also, I value relationship with AMEX through Optima... I would really want to hear your opinion.
In my opinion, you are always better off showing good management. The small accounts have served their purpose, you have a good account with Capital 1. As far as AMEX, talk to them and have them change the account to an unsecure Optima. I stand by my previous statement, once you have the house, you will not be able to keep the offers from coming. Creditors love assets, even if they are not being used as collateral for their loans. Another good way to build credit is to own stocks, you do not have to own them on margin to take advantage of their ownership. Profit from the experience. http://www.creditsense.com
"Another good way to build credit is to own stocks, you do not have to own them on margin to take advantage of their ownership." Is this kind of information reported? Saar
Alex, Wait a minute! Let's back up! You were approved for $200 but the card came with $2000? Was this a mistake? You should be so lucky! Your credit sounds worse than mine but Providian declined me! That's right denied! I can't wait to get my letter (I applied on-line). I have 3 trade lines that are 4 months old and are perfect....I have 4 charge-offs with 1 paid in full (the other 3 are less than $300 but too old to pay and start 7 year clock again)...I just made my 1st payment on a new car loan (it's not on credit report yet but I was approved for it for $16,000). The same day Providian declined me Chevron approved me! Now I can't imagine why Providian denied me. Maybe I should have tried Capitol One like you did.
Sounds to me as if Providian said no because you have too many new accounts, one of the factors in FICO scoring. From your post, I'd also gather that you have a lot of recent inquiries (within 1 year), another FICO factor. Car dealers are less concerned about these sorts of things because the car serves as security. But unsecured creditors, including Providian, pay closer attention because their relative risks are higher. This explains why a lot of prime credit card firms won't issue a card to people who have a whiff of a major derogatory on their file -- collections, chargeoffs, judgments, liens, BK., histories of slow pay. In your case, it might be a good idea not to apply for credit from any source for at least a year. It sounds as though you need blunt the effect of your recent account openings and inquiries, and the only way to do that is to let some time pass. Four or five open tradelines composed of a mixture of installment and revolving are enough to rebuild a credit file. Sounds as though you'll be fine as long as you keep your credit-card balances low and work steadily to reduce the balance on your car loan. Bankrate.com has some excellent free amortization tools you can use to calculate the actual cost of your debt and determine a payback strategy to help you reduce balances faster. A year from now you could have three tradelines with perfect histories for 16 months, an installment tradeline with a perfect 12 month history and the Chevron card with a perfect history for a year. You'll be sitting pretty with all of those, if you keep your balances low. When the 7-year mark causes your bad accounts to fall off, you'll be able to qualify for credit of all sorts at attractive rates.
HOME LOAN From a Mortgage lending point of view, an FHA loan would be the best deal. In order to avoid "Traditional Underwriting" you need to have a minimum of 3 open tradelines i.e. credit cards, car loan etc. As of July 9th, it looks like FHA wants 6 or more open tradelines (this is V.A. requirment). My suggestion is to leave those accounts open, just keep them low/zero balance. Dave LandMark Mortgage
Not really, but the benefits of owning assets can not be overstated. A marginable account is a powerful tool not to be overlooked. Remember, you must think big to get big. I have owned real estate and stocks since my early 20's. Profit from the experience. http://www.creditsense.com
RE: HOME LOAN Speaking of "Traditional Underwriting" I have yet to find so much as ONE Mortgage Broker, Dealer, Banker or anybody in that industry for that matter on any site anywhere even attempt to defend their horrible practise of cross-collections. It appears for all intents and purposes that the Mortgage Industry is working hand in hand with the financial/collection industry and the one exception and shining light in this mortgage cartel is the FHA program. INCREDIBLE!
Darrell, To be totally honest, I believe you are right. Thanks for the encouragement! I needed it! I have decided to wait a year before applying anywhere else. Thanks again!
RE: HOME LOAN As long as an application meets certain criteria: 3 open tradelines No BK last 2 yrs No back Child Support No judgments/liens Then we DO NOT require collections/charge-offs to be paid as a condition of the loan. Obviously this helps us approve more loans because borrowers don't need to have enough funds to pay charge-offs/collections AND closing costs(including down payment) Dave LandMark Mortgage
Providian doesn't necessarily use FICO scores, or they may be customized. This bank is accustomed to dealing with risk factors, and all they care about is your current ability to make substantial payments on new accounts. My questions about Providian include: (1) Did they initiate the transaction, or did you? (2) Was the offer for the anonymous subprime VISA, or for the VISA Platinum (also anonymous)? Most of our generalizations about Providian pertain to the subprime VISA offered by direct mail.
Hubert, I initiated. I did not receive a pre-approve offer. I decided to apply after learning that Providian grants frequent credit limit increases. I am not seeking more credit but need higher limits to inhance my credit rating. If I had known about Providian when I started I would have skipped the ones I have. There is a chance that I may not have been actually denied by Providian. I got an e-mail from them stating that my application is being processed. I thought about it and realized that when I applied on-line the instant response stated "we can't offer a credit card at this time". I think problem was my address. I used my residential address and my P O Box. The P O Box is new and my creditors have not reported it to the CRA's. I'm hoping Providian is sending me a letter asking for verification then I will be approved. Do you think this is the case?
