Rebuilding credit, what should future plans be?

For just about anything you want to get off your chest about credit cards.
10 posts
dimond_dj
Green Member
Green Member
 
Posts: 15
Joined: Thu Mar 03, 2016 9:21 pm

Rebuilding credit, what should future plans be?

Postby dimond_dj » Tue Mar 08, 2016 8:23 pm

I just found out today I was approved for a secured visa card with a limit of $300 from First National Bank of Omaha. I am starting over and trying to rebuild my credit after recovering from some serious issues. I was a little shocked because I didn't think I was going to be approved but today I was. Now I just need to figure out my future plan. I'm okay with just having this card for now, but would there be any advantage to opening a second secured card? I really don't want to tie up funds with another bank if I don't have to. The only secured card I've even considered is from Citi in hopes that I would get better cards from them down the road.

It feels stupid, but if I had a chance of getting a Walmart card in 6 months to a year, I'd go for it just to start a line of unsecured credit and it would be perfect to charge $30 to $40 then leave it alone until the statement cuts. Most other store cards really don't interest me because I might shop there once a year and if they accept the major card I already have, why do I need their store card? Barclay has a fairly decent card for average credit but I'm not sure how soon I would qualify for it.

Products like Capital One really don't interest me unless I need them to help rebuild my credit. I've heard of tricks like opening accounts with places like Fingerhut and Crown Jewelers that give easy approvals but since the card I've been approved for reports to all 3 credit bureaus do I need anything else?


Kevin86475391
Centurion Member
Centurion Member
 
Posts: 237
Joined: Wed Feb 18, 2015 9:04 pm
Location: Texas

Re: Rebuilding credit, what should future plans be?

Postby Kevin86475391 » Tue Mar 08, 2016 10:58 pm

The conventional wisdom for optimizing the building/rebuilding of credit is to get 3 credit cards. However, I definitely advise taking that with a grain of salt and with a few caveats. A lot depends on your personal time horizon and goals.

It sounds like you don't want/need a store card and also like you're not that interested in adding a second secured card in the near-term. I absolutely applaud that decision and am sure you know your situation best. So don't waste time/money/inquiries with store cards or another secured card if that isn't what you want.

Instead just sit tight, let positive history build up on your current secured card and wait till you qualify for a regular, non-secured major credit card. Just realize that getting to that point could take some time and you might need to give it 6-12 months or even longer.

My advice would be to focus on responsibly managing your new card for at least 6-12 months, then consider applying for an unsecured, but attainable card. If you get it, great! If you don't get it, consider either giving it more time or perhaps adding a second secured card.

Remember that since you're rebuilding (and thus presumably have some baddies on your report) one of the single best things you can do for your report is just give it time. Let some/all of that bad stuff age off. It'll become less and less detrimental to your score over time.

Good luck, congrats on your approval, and best wishes on a successful rebuilding!

dimond_dj
Green Member
Green Member
 
Posts: 15
Joined: Thu Mar 03, 2016 9:21 pm

Re: Rebuilding credit, what should future plans be?

Postby dimond_dj » Wed Mar 09, 2016 6:55 am

What should be the time frame for applying for another card? If I wait 6 months should I try to get something unsecured first or another secured card? I would apply for the WalMart card just to have something unsecured and not have to put up another deposit. I was previously declined for a Bank of America secured card, Discover secured card, Wells Fargo secured card and Citi secured card so I was very surprised to be approved for the First National Bank of Omaha secured card. I'm just not sure if I should try for one of those cards again in 6 months or try for the WalMart card. Barclay seems to have MasterCard for people with fair credit but I don't know if I could get it in 6 months or not, better than a secured card. Maybe I'd just be lucky to be able to get a decent secured card???

Products like Open Sky don't really interest me unless I need them for another line of credit because the only way to get my deposit back is to close the card. FNBO says they will consider me for a no AF Platinum card and then my card would convert in 18 months, so I could keep the account open and active for years without tying up my money on a secured card forever. Just not sure which way to go.

Tubpbs
Centurion Member
Centurion Member
 
Posts: 827
Joined: Mon Oct 19, 2015 2:08 pm

Re: Rebuilding credit, what should future plans be?

Postby Tubpbs » Wed Mar 09, 2016 11:02 am

I think you're being tempted to move too quickly here.

How long ago were you denied for all those secured cards? What was the reason given in the denial letter?

I would plan on sitting for 12 months and then going for an easier to be approved for unsecured card (like Walmart) or something along those lines. 6 months might be pushing your luck and won't help. It depends on a lot of information we don't necessarily have. Inquiries, specifics of negative marks on your reports, etc etc.
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

Elijahmex
Centurion Member
Centurion Member
 
Posts: 180
Joined: Mon Sep 29, 2014 1:10 am
Location: EURO-US

Re: Rebuilding credit, what should future plans be?

Postby Elijahmex » Wed Mar 09, 2016 12:52 pm

Tubpbs wrote:I think you're being tempted to move too quickly here.

How long ago were you denied for all those secured cards? What was the reason given in the denial letter?

I would plan on sitting for 12 months and then going for an easier to be approved for unsecured card (like Walmart) or something along those lines. 6 months might be pushing your luck and won't help. It depends on a lot of information we don't necessarily have. Inquiries, specifics of negative marks on your reports, etc etc.


I agree. Build your credit with the card that you have.
Image

Tubpbs
Centurion Member
Centurion Member
 
Posts: 827
Joined: Mon Oct 19, 2015 2:08 pm

Re: Rebuilding credit, what should future plans be?

Postby Tubpbs » Wed Mar 09, 2016 3:59 pm

Elijahmex wrote:
Tubpbs wrote:I think you're being tempted to move too quickly here.

How long ago were you denied for all those secured cards? What was the reason given in the denial letter?

I would plan on sitting for 12 months and then going for an easier to be approved for unsecured card (like Walmart) or something along those lines. 6 months might be pushing your luck and won't help. It depends on a lot of information we don't necessarily have. Inquiries, specifics of negative marks on your reports, etc etc.


I agree. Build your credit with the card that you have.


Exactly. That's an excellent way to put it. The usefulness of the newly acquired credit hasn't even started. Use your card, pay your bill every month in full, on time or early. Get 12 months of new positive information reporting. That will help you get future account approvals, but you need to wait a while and be patient.
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

User avatar
Vattené
Centurion Member
Centurion Member
 
Posts: 1157
Joined: Sun Jan 26, 2014 3:55 am
Location: US

Re: Rebuilding credit, what should future plans be?

Postby Vattené » Wed Mar 09, 2016 5:02 pm

I think what others have already said is great advice. I just wanted to add this to perhaps help you frame this situation differently.

Building credit is a very long process. A year is nothing in the credit world. I would wait 12 months and then apply for an unsecured card, like Walmart if that's what you want. Is it possible you could get approved for another secured card sooner? Yes, it is possible (but, as mentioned, it still depends on a lot of information to which we don't have access). If you did, however, you would outgrow it in a few years and then be stuck with an account you're paying for or have money tied up in that doesn't do anything for you. The most important thing you can do for your credit is manage what you have responsibly going forward. Let this secured card age, and use it at least enough to let a record of positive payment history grow. In a year you should be able to get an unsecured card to add to your profile, and in a few years (depending on what derogatory information is in your credit) you will have your pick of whatever credit product you want.

It's great that you are taking credit seriously, but it is a very long game. Applying for a lot of different things - especially when your credit is already on shaky ground - will start hurting you fast. Congrats on this approval! It is an important first step in turning things around, and it will help you more than you realize.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

dimond_dj
Green Member
Green Member
 
Posts: 15
Joined: Thu Mar 03, 2016 9:21 pm

Re: Rebuilding credit, what should future plans be?

Postby dimond_dj » Wed Mar 09, 2016 9:50 pm

I'm not sure if I'm asking correctly, I swore off credit 2 years ago when I had some problems with a job loss and I ended up getting into trouble with the credit I had at the time while trying to start a new job. I got a job in another town and had to stay in a motel while waiting for an apartment to open, the problem is I wasn't making enough and the motel charged too much so there was nothing left over from my paycheck for clothes, gas and food. I thought I would be able to pay the cards off once I got in my apartment but I found I was barely able to make it paycheck to paycheck and not enough to make all my payments. My last account was charged off about 2 years ago and It's totally sucked trying to pay that all back. Of course the smart thing to have done would have been to admit I didn't have enough money to take a job out of town, quit and move back. I've been on the job almost 3 years now and I had a huge increase in wages about 6 months ago.

About a year ago some friends convinced me I needed to work on my credit because if I wasn't using any, I wouldn't have any. They said I should start with a store card because they are easier to get and it wouldn't affect my credit to apply but I couldn't find any that would approve me. Tried several gas cards and that didn't work either. Walmart said I didn't have enough accounts "paid as agreed" so I'm wondering if just one secured card will be enough to get it. I didn't try for cards like Open Sky or Capital One because they don't ever convert to unsecured. I gave up on applying about a year ago when everyone else was turning me down, then in a conversation with someone from FBNO, they said they review your performance after 12 months and see if they can convert you to a Platinum card then in 18 months the refund your deposit. The only reason I would consider products like a Walmart card or Barclay card would be to build credit with an unsecured card which would be better than any secured card. Of course my long term goal is to get several unsecured products starting in a year or so. My big question is, would there be any advantage to adding more secured cards? Will the one card reporting be enough to get a Walmart card in a year? Really, I'm fine just having one card so I can say I have a credit card, adding 2 more would only be to have 2 more cards reporting.

Tubpbs
Centurion Member
Centurion Member
 
Posts: 827
Joined: Mon Oct 19, 2015 2:08 pm

Re: Rebuilding credit, what should future plans be?

Postby Tubpbs » Thu Mar 10, 2016 5:43 am

dimond_dj wrote:I'm not sure if I'm asking correctly, I swore off credit 2 years ago when I had some problems with a job loss and I ended up getting into trouble with the credit I had at the time while trying to start a new job. I got a job in another town and had to stay in a motel while waiting for an apartment to open, the problem is I wasn't making enough and the motel charged too much so there was nothing left over from my paycheck for clothes, gas and food. I thought I would be able to pay the cards off once I got in my apartment but I found I was barely able to make it paycheck to paycheck and not enough to make all my payments. My last account was charged off about 2 years ago and It's totally sucked trying to pay that all back. Of course the smart thing to have done would have been to admit I didn't have enough money to take a job out of town, quit and move back. I've been on the job almost 3 years now and I had a huge increase in wages about 6 months ago.

About a year ago some friends convinced me I needed to work on my credit because if I wasn't using any, I wouldn't have any. They said I should start with a store card because they are easier to get and it wouldn't affect my credit to apply but I couldn't find any that would approve me. Tried several gas cards and that didn't work either. Walmart said I didn't have enough accounts "paid as agreed" so I'm wondering if just one secured card will be enough to get it. I didn't try for cards like Open Sky or Capital One because they don't ever convert to unsecured. I gave up on applying about a year ago when everyone else was turning me down, then in a conversation with someone from FBNO, they said they review your performance after 12 months and see if they can convert you to a Platinum card then in 18 months the refund your deposit. The only reason I would consider products like a Walmart card or Barclay card would be to build credit with an unsecured card which would be better than any secured card. Of course my long term goal is to get several unsecured products starting in a year or so. My big question is, would there be any advantage to adding more secured cards? Will the one card reporting be enough to get a Walmart card in a year? Really, I'm fine just having one card so I can say I have a credit card, adding 2 more would only be to have 2 more cards reporting.


I'm pretty sure everyone who responded read and understood your position. I certainly did.

I don't think you should apply for another secured card now or in 6 months. I think you are just as likely to be denied for that as you are an unsecured card in the next 6 months. Depending on your inquiries, wait 12-18 months and apply for an unsecured card. Heed my advice above and everyone else's and when that time comes, you will be in the best position for approval...
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

Elijahmex
Centurion Member
Centurion Member
 
Posts: 180
Joined: Mon Sep 29, 2014 1:10 am
Location: EURO-US

Re: Rebuilding credit, what should future plans be?

Postby Elijahmex » Thu Mar 10, 2016 7:54 am

Tubpbs wrote:
dimond_dj wrote:I'm not sure if I'm asking correctly, I swore off credit 2 years ago when I had some problems with a job loss and I ended up getting into trouble with the credit I had at the time while trying to start a new job. I got a job in another town and had to stay in a motel while waiting for an apartment to open, the problem is I wasn't making enough and the motel charged too much so there was nothing left over from my paycheck for clothes, gas and food. I thought I would be able to pay the cards off once I got in my apartment but I found I was barely able to make it paycheck to paycheck and not enough to make all my payments. My last account was charged off about 2 years ago and It's totally sucked trying to pay that all back. Of course the smart thing to have done would have been to admit I didn't have enough money to take a job out of town, quit and move back. I've been on the job almost 3 years now and I had a huge increase in wages about 6 months ago.

About a year ago some friends convinced me I needed to work on my credit because if I wasn't using any, I wouldn't have any. They said I should start with a store card because they are easier to get and it wouldn't affect my credit to apply but I couldn't find any that would approve me. Tried several gas cards and that didn't work either. Walmart said I didn't have enough accounts "paid as agreed" so I'm wondering if just one secured card will be enough to get it. I didn't try for cards like Open Sky or Capital One because they don't ever convert to unsecured. I gave up on applying about a year ago when everyone else was turning me down, then in a conversation with someone from FBNO, they said they review your performance after 12 months and see if they can convert you to a Platinum card then in 18 months the refund your deposit. The only reason I would consider products like a Walmart card or Barclay card would be to build credit with an unsecured card which would be better than any secured card. Of course my long term goal is to get several unsecured products starting in a year or so. My big question is, would there be any advantage to adding more secured cards? Will the one card reporting be enough to get a Walmart card in a year? Really, I'm fine just having one card so I can say I have a credit card, adding 2 more would only be to have 2 more cards reporting.


I'm pretty sure everyone who responded read and understood your position. I certainly did.

I don't think you should apply for another secured card now or in 6 months. I think you are just as likely to be denied for that as you are an unsecured card in the next 6 months. Depending on your inquiries, wait 12-18 months and apply for an unsecured card. Heed my advice above and everyone else's and when that time comes, you will be in the best position for approval...


I confirm that I read your original post and I also stand by my previous comment.

I am new to the credit game and like you wanted to build up as fast as possible and get as many cards in the shortest time. However I learned that rushing things can be detrimental. I got one card my first year and built up until I decent FICO score. 13 months later here I am and I have just added two accounts to my report. The first year was tough. I kept utilization low, made two payments every month and by due date made sure my balance was as low as possible. That good behaviour allowed me to get 3 CLIs and reach a 750 FICO.

Good luck
Image



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: DavidSpode and 2 guests