Hey everyone, I am so thankful for this forum! I am on a quest to be able to buy a new car, and a house when I graduate college in a couple years. Currently, I have a score with experian of 610. and a FICO score of 580 something. I have several debts that I have paid in the past, that still show up. I won't make the same mistake again. I work part-time, and get some monthly financial aid from the VA, but it is barely enough. I get my term financial aid and loans every 3 months. The next one I am planning on putting mostly towards debts. I am planning on negotiating with the CAs to hopefully pay less, and hopefully have things removed. I have decided not to waste my money, and I am not going to pay if they will not completely remove them, since almost everything is at least 5 years old at this point, and the 7 years are approaching. I am planning on requesting everything in writing, and am not taking any chances. I am curious, as I was told by the guy at the Toyota dealership a few weeks ago, that medical debt is viewed by finance companies as less scary. He said that you can owe 5k in medical debt in collections and still get a loan, but if you have 5k in credit debt, and have a single late payment, they view it as worse. Is this other peoples experiences, as well? I have about $2000 in medical bills from hospitals and labs. I am making the credit debt the priority first, Lastly, in trying to build up my credit score, I have been told that a secured credit card is the way to go. I have checking with US Bank and Bank of America. They both have secured cards where I put $300 in a savings account, and they give me a $300 credit limit, and it's then treated like a regular credit card. They both have an interest rate at 20% and high annual fees. I know I can get it with USB, probably with BOA, too. I also see that Capitol One has a secured card, but I don't think I meet their requirements. Maybe do both USB and BOA cards? I am aware of not spending more than 30% of your limit, and I am now VERY aware of the importance of making payments on time. Any other cards? Does anyone have other suggestions of things to do to improve my score and to give me a more current and solid credit score? Thanks you guys! This forum has given me a lot of hope for the future!
Whoever gave you that dumb advice ought to learn how to just shut up, go away and quit trying to hoodwink people into thinking they know something. Hmmm! $300 credit cards and you impose a 30% limit on top of that which means that the max you can have on any card at any time is $90. What could you do with $90 worth of credit? That's not even enough to buy gasoline for a month. Why would you want to mess around with crappy $300 limit credit cards, high interest rates and high annual fees? Of course, but the management here hates it every time I even mention it. You see, their stance is that they don't want to suggest that people use any kind of "tricks" to improve their credit. Never mind the fact that most banks just love people who use my way of getting excellent credit because they make money in the process and it shows that the persons using my methods knows and understands how to use the credit system. Bank officers everywhere know about, understand and approve of people using my method and if you ask most of them if they know about it they have no problem with it at all. They understand that it is a great way to build great credit almost over night. It is simply a process of using savings accounts as a way to get secured loans. The bank has no risk because the money is tied up in a savings account. They earn a bit of interest and you get great credit. In the end it costs you almost nothing compared to what it would cost you to mess around with crappy $300 limit cards.
Welcome to Credit Talk! We're glad to have you. Forums are all about receiving different opinions from different people. That's what makes them useful and interesting. Bill has his opinions. I have mine, as do others here. You can choose which you like more, but everyone is free to post any ideas they have. Oh, and Bill - don't you use the 3 banks trick to build corporate credit? You've said that in the past. I don't think this college student has any interest in building corporate credit. So, here's what I think about building personal credit in this situation. Hybrid- in response to your first question, a potential lender will look at medical debt slightly different than credit card debt. However, today's lending environment is really tough. If you want to get the best rates and terms, you have to have a clean credit report and good FICO scores. Do your best to deal with any outstanding collections or unpaid medical debts and clean up your credit reports as much as possible. Now, secured credit cards are good options for those with bad credit who want to get started on the right path again. Yes, the fees can be high at first, but you don't need to use them very long before you can graduate into a regular secured card. You may want to look into products offered by First Premier, in addition to Cap One and USB. Once your credit score improves a bit, look into getting a student credit card that you will use sparingly, always pay on time, and always pay in full. Over time your remaining baddies will fall off your credit reports and your improved payment history will help boost your FICO scores substantially. If you have a relative or close friend that would be willing to add you as an authorized user to one of their credit cards in good standing, that should help give your scores a boost as well. Parents have been doing this for their children forever, and it still works. Good luck, and please come back often and let us know how the process is going.
Thanks for the advice you guys. Bill- I think that opening a savings account is a good idea, anyway. I tend to want to go against the grain, and feel like the our credit system is ****ed up. But, I also feel like I want to buy a house and a new car, and I except that I have to maneuver within a system I don't like. I am double majoring in Social Work and Sociology, so I find myself in similar situation quite often. Joshua- I will look at Premier. I saw that Capitol One offered a secured card, but it didn't look like I would meet their requirements. Is having positive credit in the present, with cards, and a decent fico number, enough to counter the bad items left on there? There are two things from Key Bank, one was a closed checking, one was a closed credit card. Both were payed off, and I have a letter coming from them saying that, and it's reflected, but they still show as being paid charge-offs. I have so many small medical debts, all from the same collection agency. Maybe I can just settle them all at once for a fee? I am going to make some calls and see if I can get some letters for removal sent out to me. Again, thanks. I didn't know that if I was put on someone else's credit card, that it would report to the bureau's. Is there a credit requirement for such things? devon
Yes. That is correct but it also works great for building personal credit when someone has none whatever. No derogatories, no nothing. I'm also sure that college students are highly unlikely to have any interest in building corporate credit but large numbers of them have no credit at all and have no idea of how to build credit except to submit to the rip-off barons and their junk credit cards. My way offers a much more viable alternative to the rip-off cards route. Absolutely! Right on! Absolutely! Can't say as I would want to argue about that either. (LOL)
The only problem with the three bank trick is that it's installment loans, not revolving credit. Most creditors these days want to see you handle revolving credit. As far as Cap One goes, I don't know their current standards. But they used to do things like give you twice the credit as your deposit, so if you put in $500 you'd get a $1000 credit limit. That may have changed, and I don't know what the qualification requirements are either.
