Hey all. New to the forum. Stumbled along to this site through some forum post at fatwallet. Thought I'd introduce myself for a second. I'm a senior undergraduate student who has gotten into some financial trouble early on during the years. Tempted by all those college credit card offers, I racked up around $12,000.00 worth of credit card bills in a few years. Brilliant, eh? I've generally avoided the collection agencies as I was a little scared of them (it's a little intimidating to get letters from collection agencies when you don't know anything about them and you're still in college). I've talked to them though and I'm in the process of settling the accounts. So far I've settled a $1,200.00-ish account for around four hundred dollars (my beloved American Express Blue card) and I'm making the first of three payments to settle a $4,000.00 Chase card. I've gotten my spending habits and my money flow more or less under control now. It's pretty nice to see my checking account balance grow for a change. While I feel (I think) that I'm well on the road to purging the demons from my past, I assume they've pretty much gone wild on my credit score since I can't even get a BofA checking account anymore (thankfully I still have my old local checking account so I at least have a place to put my modest lump of cash). So now here I am trying to figure out how to go about taking the next step: re-establishing/repairing my credit. I'm not looking for another avenue to spend, but rather anything (even a two hundred dollar credit card limit would do) that would let me somehow put something positive on my report. I've looked at the Orchard Bank card but I'm a little hesitant. While I do hear that they approve basically anyone, and yes some would probably argue that at least it's something, it looks like the endless stream of too-good-to-be-true offers I get in my spam box. Not to mention I don't even know if my credit would get me accepted. Also, since I settled my old Amex card, I dug through four different departments and about five different people to find out about their Oasis program. Unfortunately it's early in the morning and they don't open until seven. But that's probably the way I'd go if it's even possible since I'd assume a good standing account with American Express would look better than Orchard Bank. But I digress and I'm getting a little long winded. If you read all that, any pointers/suggestions/tips would help as I'm new to this place. If not, I just wanted to give a hello! Oh, and by the way, none of the posts I've seen has given a good phone number for the Oasis program. I figure if I went through hell to find this number, someone else might have too. One of the customer representatives I've talked to gave me 1-800-678-0738, but as this particular office is closed, I won't know until tomorrow if this number even works. But rest assured if it does, it'll go on this board!
Morning. I'm sure that you'll get more responses soon but to give you something to mull over while you are waiting...in terms of re-establishing credit I'm going to assume that you have a fairly thin credit file (not many years of credit history)--that leaves you with several options: 1. 'Easy' credit cards like gas cards, small store cards (not JCPenny or a large department store...more like a Dots) tend to be easier to be approved on. Be sure to check who underwrites the card and that it posts to all three major bureaus. Something underwritten by Chase, Citi, or any of the 'big' credit companies isn't your best bet. WFNNB however may work. 2. 'Borrow Credit' If you have a loved relative friend or other supporter consider asking to be added as an authorized user--the backdoor to re-establishing credit. While many lenders (Capital One, Discover...) are moving away from this policy, several still allow authorized users to be issued the same card and account number. That means when it comes time for monthly reporting instead of having the credit gain for a new card be washed by the hit for the inquiry (3-15 pts generally) you start the new month with the entire payment history of the previous user. For this to work first check to ensure that the same account will be reported on the authorized user's credit as well. For your generous benefactors sake I always suggest they feel safer having the physical card safely locked up in their home--they are lending their good name, not their finances. 3. 'Safe' Credit -- Yes the Orchard Banks, First Premiers and New Millennium Banks of the world have a place in re-establishing credit. Orchard Bank is able to 'guarantee' you a card because they pull a soft-touch CBR score as part of their card-user matching application process (Soft-touch is confirmed: I verified twice w/customer service and tried it with my own credit before suggesting it to anyone). These aren't the best rates (11-14) and have severe APR penalties if you are even a hour late on the payment, but they start with workable credit limits and will extend the limit with prompt repayment (Good credit means having it but not using much). 4. Secured Credit--the best way to re-establish credit in my opinion is to use a secured credit card. This takes some phone time and cash, but in terms of your long-term credit success it can't be beat. Sub-prime or predatory lenders review the credit of users that already have high interest credit cards (why you receive tons of unsolicited mail offers and people with high interest cards tend to get more high APR cards) you see them reviewing your credit in the non-impacting (soft) inquiries section of the report. Call around and find a bank, or better yet credit union, that will offer you 100% of your deposit in credit, pull no inquiry (its secured--they shouldn't need it), report to all three major bureaus within one month, and offer after sufficient positive repayment (12 mths) that the same acct will be converted to non-secured credit with the possibility of credit limit increase. You get the full benefits of the new credit management of you credit score, but aren't burdened with the score decreasing inquiry. 5. Credit Union 'Debt' Loans--revolving credit, i.e. credit cards, aren't the only type of credit...it is important to have a good mix of credit between mortgage, revolving and installment or set-payment loans. Let me take a moment to stress the peril of Consumer Finance Accounts "Buy now, Pay later" accounts of the type like 12 mths same as cash--these can wreck a score just by their inclusion; avoid consumer finance accounts at all costs as if they report as CFA as opposed to installment or revolving there is a huge penalty in the second largest section of your credit score. Credit unions often offer very low interest short term debt repayment loans, which is another avenue to build a score. Since you are fairly young it is likely that you should only open 1 - 2 revolving lines of credit as your 'ideal' (depending on the age of your credit file, it is expected that you have a certain number of cards. Too many or too few will cause your score to be penalized). As a student I'll imagine you will have plenty of installment payments (student loans) but that none will be showing current as they will be in deferment. Might consider one installment loan to balance out your 'good credit mix'. Good Luck
