Rebuilding, Need Some Help, Suggestions?

For just about anything you want to get off your chest about credit cards.
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willgatlin25
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Rebuilding, Need Some Help, Suggestions?

Postby willgatlin25 » Wed Jul 24, 2013 8:28 pm

Hello Everyone,

I've been snooping around on this website for the last few years and today I decided to join so I could ask for some advice.

Basically to make a long story short I've had some pretty bad dings on my credit profile over the last several years. I made some poor decisions when I was younger starting with defaulting on a BoA credit card that I opened when I was 18. I ended up ignoring the debt, debt got sold multiple times, eventually lawyer got a hold of it and smacked me with a judgement that forced me to pay. That was the nastiest hit to my credit about a year ago. I've had a handful of collection accounts here and there, only 1 remains and the others show a paid in full status or have dropped off by negotiating with the persons I owed money. These were in fact all medical debts but they still hurt my credit none the less.

My issue was that ever since I started defaulting on my BoA card I was afraid of credit, I didn't want to owe anyone money or apply for any new credit anywhere. So as a result I virtually had nothing but poor credit and no new revolving accounts.

Ever since that disaster I have been very responsible with credit and make it a point to never miss a payment, go over %50 of my available credit, etc.

I currently hold an Orchard Bank Credit Card (Recently Bought Out by Capital One) with a $300 dollar limit, this was my first CC after my BoA disaster. After that built for about 6 months I applied for a Capital One CC and was approved for $500 CL. Just a few weeks ago CapOne offered me a CLI of $500 and I accepted, making the CL for CapOne $1000.
Around August of 2012 I applied for a Discover CC (knowing Discover can be difficult to be approved for) and they instantly approved me for a $1000 CL, Discover has also upped my CL twice making my CL $1700 currently.
I hadn't applied for any credit since August of 2012 and had made a point to stay on track with all my payments and be responsible so I decided to go one final step. I had been looking at the Chase Freedom card for a while and was interested to be a card member. I had received a pre-qual notice for the Freedom card and decided to proceed, this was only a few days ago. I was assuming this would be my biggest and best card and I was going to hold off for a few years applying for anything new. To my dismay I was approved but only for a lousy $500 bucks!
Through this website I was able to track down the backdoor number to the credit analyst offices for Chase Credit and ask them what the deal was. The guy basically said he saw my blemishes and that wasn't the issue, he said I had done too much good, too quick, and he couldn't approve me for anything more than $500 dollars.

I am really confused about what's going on with my credit, it seems to be all over the place. I use credit seasame and credit karma but I don't entirely believe their scoring system, I don't think it's that accurate. To my best knowledge I believe I am around 620 - 640 between all 3 scores. I really am trying to improve my credit so I can eventually get a home loan but I seem to be stuck, it just wont climb. I've looked at my report a few times, had a home loan company check, these various credit card companies, and it's left me with like 12-15 credit inquries on my profile and that buggs me.

I really want to know what your suggestions are. I want to have good credit cards and these lousy 300 and 500 dollar cards are just a joke to me, it's a good feeling to see, "APPROVED," but it's upsetting to see the tiny amount when others have 15,000 dollars on up for their CL's. I'd love to close out my orchard card but I've been told to never close old credit cards because it messes up your length of credit history, etc.

What should I do to truly build my credit, how should I get good credit cards, how many should I have, what should I worry about?

Your help is appreciated! Thank you :oooo


infiniteloop
 
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Postby infiniteloop » Thu Jul 25, 2013 7:26 pm

I can definitely relate as I am in much the same situation. I was young and stupid, wrecked my credit, ignored it for years, and now I am in the process of rebuilding. I will say that I am Canadian so there are some differences between the two countries system, but most are largely identical.

What is likely hurting your score most is that one baddie left on your credit report. Get rid of it as soon as you can. Until you do you will be limited in how high your score can go. Pretty straightforward.

The second thing I would suggest is limit your apps, and thus your inquiries. 12 - 15 is a lot and that has surely had a sizeable effect on your score. I am pretty cautious when it comes to this. I have limited myself to one every 6 months. Saves my score from being dinged and also means I have plenty of waiting time to research just what card or loan is going to be the best choice.

If you are making your payments on time that is good and also key to improving your score. Keeping your utilization low is also going to be very helpful (and just smart from a personal finance perspective). And though it might suck about the low CL for the Chase card you still got a card so that is a plus. I would say before applying for anything else really figure out what do you want your cards for? If it is purely about building your score and you will only use them to keep them alive one or two store cards could be helpful (Google 'credit card shopping cart trick' for a way to potentially get a store card without having a hard inquiry pulled). If you want a credit card that you will use regularly (travelling, points, whatever the case may be) I would certainly wait a while and let your score build up so that you have a better shot of being approved and with a higher credit limit next time you apply.

Beyond that really it is just going to take patience. I am 7 months into my rebuilding exercise and I am 39 points higher then when I started and though there have been ups and downs in that time I am now trending up most of the time. I have only done 2 applications in that time, the most recent just under a month ago, and both were successful (though one was a secured card so that was not much of a risk). I have 3 accounts in total reporting (soon to be 4) and I have made all my payments and kept my utilization low. I have made a firm date of late October as the earliest opportunity I will give myself to submit another application. And perhaps most importantly I have taken a more serious and healthy look at how I manage my personal finances to make sure I avoid debt (other than my student debt) and also build up a savings.

The process will not be fast and you have to be dedicated to it. I have had months where the biggest challenge was overcoming boredom because I didn't have money that I could spend (that was instead being funnelled into savings or paying down my student more). But I am also willing to bet that if I report back after the 1 year mark I will feel immensely better, and proud, that I turned my score around and got things back on track.

MemberSince99
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Postby MemberSince99 » Fri Jul 26, 2013 6:53 am

You already are building your credit doing the things you are doing now. There is no real shortcut in the world of credit with a few narrow exceptions - getting backdated Amex cards, becoming an AU on someone else's cards, or disputing or GWing derogs from your report. Otherwise, only responsible behavior and time will give you what you are seeking.

As far as CS and CK go, don't worry much about the scores they give you - they are worthless and only give a general idea of where you stand. Check your FICO scores that's what lenders use. I know of NO lender that uses CK to make a lending decision. If you are in the range of 650-670, you might go for Discover IT or Chase Freedom. Or both. Once you do, you are on your way up.

infiniteloop
 
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Location: Manitoba

Postby infiniteloop » Fri Jul 26, 2013 11:48 am

I would also add that when you do start applying for cards again in the future to keep in mind that a denial is not always a denial. I was denied on my second application but after calling up and asking why they were able to reverify some of my information and I was approved. It seems that this is common. The worst that can happen is they still say no but they may also give you useful information as to exactly why you were denied which you can keep in mind for the next time.

willgatlin25
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Thank You Everyone

Postby willgatlin25 » Sat Jul 27, 2013 8:07 pm

Hey All,

I appreciate your help, it's noted. I contacted the executive offices of chase bank and on further investigation they told me there are 3 open collections on my experian credit report, unfortunately I'm in shock! I knew of one and was told about ONE when I spoke with the first chase credit analyst, now I'm told 3!
They did however approve me for the Chase Freedom card ($500 CL) which is good, so I didn't take an INQ for nothing. However, I'm hoping they send me a copy of their report so I can see what these collections are.

I've been extremely irritated over the last 2 years (in my credit re-building process) because every now and then I'll get smacked with a mystery collection on my credit history and I'll have no idea what it is. I never get phone calls or bills from mystery creditors, I just get random collections showing up on my profile. The last one I got was a collection from ADT Alarms for $1100 dollars for an account that was closed out IN GOOD TERMS over 3 years ago. Turns out someone screwed up and didn't close my account properly, they decided to not contact me for clarification for 3 years, but instead just threw me into collections for something I didn't owe. I did get the collection closed after dealing with ADT and getting them to see that the account was closed in good terms, but now I'm stuck with a BS closed collection on my credit history. I contacted the collection company and they said since it's closed then they no longer own the account and they aren't responsible for removing it... But they are the ones that reported it in the first place!
Every time I get some random collections account on my credit history it literally makes my heart sink and it's very upsetting. Collection companies are really quick to report a debt but they wont help you at all when it comes to fixing the problem or getting them to understand that they made a mistake! It's a huge nightmare when it comes to getting someone to remove something from your credit.

It's really hard for me to monitor my credit because every time I check it then I end up hitting myself with a hard inquiry and it hurts me more. But I've noticed that sometimes I'll have one collection on Equifax for example and then I look at Experian and theres 3. Even the popular credit monitoring companies only pull reports on one or two out of the 3 credit reporting companies. I wish there was a true way to have realtime access to all three of your credit reports 24/7.

As of right now I have 13 hard inquries on my credit. How long do they stay on there? I know it's not good but a few of them were due to my old lawsuit (judgement), the nasty legal firm pulled my credit like 5 times for some stupid reason without my consent. But anyway, the only way to get new credit is to have your credit checked so I guess I'm kind of stuck.

I'm also considering closing out my Orchard Bank CC (now owned by capital one). It only has a $300 dollar CL and a $59 dollar a year membership fee and they've never raised it once. I'm afraid to close it because of the fear it will impact my length of credit history. I used the card like 3 times and it's sat in a drawer ever since, not to mention the APR on that card is like 24%, it's nasty.

I know I need to take care of these 1-3 collection accounts but I don't even know what they are and I really don't have the money to pay out to these mysterious collections. It's really annoying.

Where I stand right now (approximately) I was at a 565-580 FICO back in winter of 2010. Now summer of 2013 I'm approximately 620-640. It's better but hasn't moved up more than that.

willgatlin25
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Postby willgatlin25 » Sat Aug 10, 2013 6:04 pm

Update:

You all likely know this but I found out that Hard Pulls stay on for approximately 2 years. Experian is 2 yrs 1 mo, Trans and Eq are exactly 2 yrs from the date of pull. I should SHOULD have a handful fall off here soon.



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