Would getting a new card benefit me?

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Would getting a new card benefit me?

Postby travduke » Tue Nov 20, 2012 9:32 pm

When I was 18, I applied for credit cards and store cards and was very irresponsible with them, along with bank accounts and other bills. While none of them were very high limits (I believe the largest was $1,000) I ended up with the majority of them in collections.

I am soon to be 25 years old, with all of the collections accounts paid off, but still showing 6 "potentially negative" items on my credit report. All with the disposition that they have been Paid and Closed, or Closed in Settlement. They are all from 2006-2009.

I have 3 cards currently, a Capital One Secured Card with a $200 limit, a Kay's Store card with a $2,000 limit, and an Old Navy Store card with a $200 limit, all of which are paid off in full. I no longer use the Kay's or Old Navy cards, but do use the Capital One and pay it off in full each month.

Here is a quick breakdown of how my credit report looks, according to Experian (not 100% sure what you're looking for so I'll add as much as I can see)

Score: 639
Hard Inquiry: 2
Old Acct Age: 6.7 yrs
Avg Acct Age: 3.8 yrs

I make around $25,000 a year, and unfortunately I was late on a payment with Old Navy and that was reported about 2 months ago. The last time I applied for any type of credit was about a year ago, and was a Walmart credit card and was denied.

My question is: Will it help my credit if I open a new credit card (not another store card) or should I continue using what I have and wait til the negatives fall off in the next few years? I would just hate to apply for another credit card and have my score be affected if I was denied again, is there any cards that anyone would recommend for someone with a score and history like mine?

Thanks ahead of time for your answers, I look forward to reading them!

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Postby MemberSince99 » Sun Nov 25, 2012 12:54 pm

It would help your credit in terms of score, I'm sure.

The question is, with your track record (and to be honest it's not good) who is going to give you more credit? Most prime banks will frown upon the laundry list of derogs especially with a new one reporting recently. To them it will look like you didn't learn. Thus I don't see too many who will be willing to take a chance on you right now.

639 is also low you would realistically need somewhere near at LEAST 660 to 675 and nothing negative to have a shot at say Freedom by Chase, or Discover More. Neither will look kindly on the negatives.

You might try a credit union or being an authorized user on a relative's card. But in terms of getting your own, it's going to be tough pickings for you with your score and recent as well as long term negatives. You may well need to just keep what you have until the older negatives fall off.

Also try to goodwill the recent one - send them a letter asking them to remove the late payment from your report. This is a FAVOR you are asking for please keep in mind and word your letter appropriately - coming across as arrogant and entitled will only see it hit the shredder. Just an FYI but if you want at least a chance, keep the tone of your mail appropriate. They may not do it anyway, but you have nothing but a stamp and a little time to lose by trying.

So you have 3 cards, and I would say in all likelihood that's what you are going to have for the near future. May not be what you want to hear, but 3 cards is sufficient. The negatives are hurting you FAR FAR more than not having a couple more cards is.

Just try to goodwill the recent one, and let the others age off, and make SURE you learn and pay your bills on time, every time, if you want more and better cards. Think about it - if you were say Chase, would YOU give someone like you a Freedom with a 3k limit? Be honest, as it will help you to grow in this journey. Just be someone you would want to loan to, and it will come. That's the good thing about credit - time really does heal all wounds.

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Postby Snowman » Sun Nov 25, 2012 7:13 pm

To add in to what 99 said. I would any just be patient. Like he mentioned above, make sure that your older negatives fall off, and make sure to pay on time and never ever be late, because lenders aren't exactly happy to see that when they give someone their cards. Just use cash most of the time, and use cards for convenience. And lastly, be vigilant about your score and try a goodwill letter and get back in the good graces of your lenders, or your chances of getting any cards from here on out will be difficult for you to get.
Bank Of America: BankAmeriCard Cash Rewards-4.2k
Citi: Forward-4.5k American Airlines Advantage Platinum Select World Elite MasterCard 9/6/15-4K
Discover: More-7k
Amex BCE.2k- Amex SPG-5k
Chase: Freedom-5kSouthwest Rapid Rewards Plus- 3.6k
Capital one: Venture one-10,000, Visa Signature.

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Postby paparoach429 » Sun Nov 25, 2012 11:32 pm

I agree with what Snowman and 99 said. Your only hopes might be store cards right now. You also can add money to your secured card if you dont pay in full each month. (I noticed you said they are paid in full but you didnt say you pay them in full every month). You would be able to spend more without constantly having to pay your bill down every time you use up $50 bucks (25% utilization).

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