ask me anything: rebuilding your credit

got a p

Well-Known Member
i have been rebuilding my credit for several years now. when i started it was pretty horrible - had several chargeoffs/collections from around 2013 which gave me a very low credit score. i started in 2017 by getting a secured credit card from capital one. then got 2 of my 4 bad items on my report deleted, unfortunately the other two wouldn't agree to delete them so i decided to just let them fall off which takes 7 years. i had tried more than once too, they just said they would report it as paid off but unfortunately, due to the way the system works, this actually hurts you more than it helps. this is because if you pay off the account and they don't delete it, it stays on your report for 7 more years from the date you paid it. so the choice was keep them on as paid until 2024-25 or let them drop off in 2020-21. i'm pretty excited now because since opening that initial secured capital one card with a $500 limit, i now have 5 credit cards with total limits across the board of over $18,000 and my two charge offs will be dropping off in december and the other in january. as far as credit cards i am set for now. i have a balance on one of them for $5,000 and i plan to pay that down over the next 1/2 year or so. there is really only one more thing for me to do, which is a pretty neat trick for a nice score bump, which is to open a loan secured against $2,000 of my own money. this one is pretty neat and not many banks do it anymore so i found a credit union that does. basically you get a loan for $2,000 and they take your $2,000. then in the first week (next day if you like) you pay off say $1,900 of it and they give you $1,900 back and you remaining balance on the loan is $100 which wont be due until almost two years. you pay $2 or so a month toward it, keeping it open and your score gets a 15 or so point boost.

i'm pretty happy with where i'm at now credit wise and expect to have what is considered excellent credit by spring of next year. it makes a lot in your life easier - from rental applications, car loans, credit cards to mortgages.

if you are interested in rebuilding because you have damaged your score or never had credit - do these things for free first

-check your credit reports (google free annual credit report) right now you can check once a week for free until spring due to covid. normally you get to check them once a year for free. take advantage.

-sign up for credit karma. it's free and is a very useful tool. also myfico credit forums are a great resource with a very helpful community.

-check any credit cards that offer "soft pull" credit card qualifications. these don't hurt your credit score to check. capital one, american express and discover are a few off the top of my head that offer this. there is a new card people are liking now apparently called petal. it's a rebuilder card like capital one but is unsecured and supposedly doesn't have high annual fees like other predatory unsecured cards. capital one is the go-to starter card that is no bs and has zero annual fees for the starter secured platinum card, and raises your limit over the course of the first year as well as returns your deposit during that time as well. just so you know pre-qualified doesn't mean pre-approved, but it means you likely will qualify. this definitely applies to those 3 i mentioned. some others pre-qualified doesn't carry as much weight like with pen-fed.

getting and keeping good credit is something that should should be taught in high school because one late payment or little slip up and your credit plummets for years, holding you back. get started on your credit, build your credit limits, and you will not have to worry about paying too much extra interest for a car or house in the future, or even qualifying in the first place. plus it is much nicer to have a few credit cards with good limits on them to help you get through should you need the help, because if that time comes and you don't have established credit you could find yourself homeless or hungry. take the steps now while we all have a little extra time on our hands. i'm here to help and i've learned a lot in the last few years, ask me anything!
 
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got a p

Well-Known Member
1 - just make sure you don't miss any payments. try to pay more than the minimum.

2 - my fico credit scores are between 680 and 700 between the 3 bureaus. there are also vantage scores, like on credit karma or through chase, and other scores but if you go to experian right now they should have a $1 seven day trial that will give you all three scores. then just cancel. i did this a couple months ago.

3- at some point if getting a mortgage is feasible i want to be ready. but really i've learned the hard way that having a bad score just messes with your life and it really is easy enough to get a good score, but it will take time. from there just don't make any mistakes and it will stay up. also, it really makes a difference to have a cushion just in case. and it does take a while to get the credit where you will be qualified for decent credit lines. so it's better to plan ahead. that first $500 capital one card i got boosted my score something like 70 points right off the bat so i would encourage anyone to at the very least check if you are prequalified at their site since it won't affect your score like a hard credit check.
 

Amos69

Well-Known Member
Congratulations on your hard work.

You are flirting with disaster having all those credit cards. Credit card debt is the biggest drain on personal wealth known to man.

Mortgage debt = yes
Credit card debt? Don’t do it.
Depends on what you do with it. I have over $500,000 in credit cards and use them in business fairly often. I know that credit is for making money, not for buying personal items.
 

Seamus

Well-Known Member
Depends on what you do with it. I have over $500,000 in credit cards and use them in business fairly often. I know that credit is for making money, not for buying personal items.
I agree, business is a totally different story. I guess I was referring to personal consumer debt.

I know you have a lot going on and I have llc’s with a few things as well and as you know sometimes opportunities come up that you need quick access to credit. Small businesses have limited access to bank lines of credit and often cc is the best quick solution. Although I never use my credit cards for personal consumer spending you’re right, I do use a card for business opportunities.
 

Juggalo9er

Well-Known Member
Congratulations on your hard work.

You are flirting with disaster having all those credit cards. Credit card debt is the biggest drain on personal wealth known to man.

Mortgage debt = yes
Credit card debt? Don’t do it.
Without sounding insulting
Credit cards are one of the most profitable things someone can have.... look up manufactured spending
 

Safar

Active Member
1 - just make sure you don't miss any payments. try to pay more than the minimum.

2 - my fico credit scores are between 680 and 700 between the 3 bureaus. there are also vantage scores, like on credit karma or through chase, and other scores but if you go to experian right now they should have a $1 seven day trial that will give you all three scores. then just cancel. i did this a couple months ago.

3- at some point if getting a mortgage is feasible i want to be ready. but really i've learned the hard way that having a bad score just messes with your life and it really is easy enough to get a good score, but it will take time. from there just don't make any mistakes and it will stay up. also, it really makes a difference to have a cushion just in case. and it does take a while to get the credit where you will be qualified for decent credit lines. so it's better to plan ahead. that first $500 capital one card i got boosted my score something like 70 points right off the bat so i would encourage anyone to at the very least check if you are prequalified at their site since it won't affect your score like a hard credit check.
Don't try to make minimum payments. Pay the full balance, and avoid interest regardless of how little interest it is. Let me tell you. Credit card interest are never little. If you can't afford to make full payments, it means credit cards are not for you. Stay away from them.
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Without sounding insulting
Credit cards are one of the most profitable things someone can have.... look up manufactured spending
Credit cards are harmless and beneficial if you pay the balance in full. But you need to be extremely desciplined. Though descipline is a rare trait these days.
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I agree, business is a totally different story. I guess I was referring to personal consumer debt.

I know you have a lot going on and I have llc’s with a few things as well and as you know sometimes opportunities come up that you need quick access to credit. Small businesses have limited access to bank lines of credit and often cc is the best quick solution. Although I never use my credit cards for personal consumer spending you’re right, I do use a card for business opportunities.
There are things that we pay for anyways even as a consumer. Like car insurance, gas, grocery, and clothing. So why not use the credit cards. But again, you have to be desciplined and and not buy crap with credit cards, and that is tough.
 
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got a p

Well-Known Member
agree that you don't wan't to be paying interest, pay in full and you don't have to. it's a weird caveat that you need credit cards, loans, and a history of payments to have a good credit score which leads to low interest rates but that's the way they set it up. otherwise you either can't get a mortgage or are forced to go the FHA route. i only use one card for the most part which still has 1/2 year of 0% apr so i don't pay interest. i use the others for a small purchase once in a while to keep them open, but otherwise they stay in my cupboard.

i have had a couple store cards closed without my consent due to non-use. they helped my score bc of how long they had been open. they still keep my age of accounts artificially high even though they are reported closed but they will come off my report at some point and that will lead to a small point drop. really once a mortgage is closed i really won't care much about credit. i'll probably just sign up for cards that offer sign up bonuses and don't have annual fees. some sign-up bonuses right now are real nice.

i would for sure recommend getting credit though if you have none, because of how long it takes to establish it.
 

observer

Well-Known Member
Moderator
I don't know if this is still the case or not or if only certain credit cards do it but if you want to increase the limit, charge a subscription to the Wall Street Journal.

I was buying a copy 2-3 times a week at the newsstand when I commuted between LAX and OAK, 3X a week for eight years. I also had subscriptions to the LA Times, Press Telegram and about 30 magazines.

One day I decided to subscribe to the WSJ, about 3O days later, out of the blue, my CC company doubled my limit.
 

Solari$

Member
I want to add that you should make sure you use all your credit cards. And set up automatic payments on due dates. And pay them in full. One missed payment and you are looking at Balance plus 23% next month. And that will suck. Also, personal credit and business credit are two different things Open a Corporation or LLC and get a couple of business credit cards too. Personal credit score tops at 850 while business credit score tops at 100.
 
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Amos69

Well-Known Member
I don't know if this is still the case or not or if only certain credit cards do it but if you want to increase the limit, charge a subscription to the Wall Street Journal.

I was buying a copy 2-3 times a week at the newsstand when I commuted between LAX and OAK, 3X a week for eight years. I also had subscriptions to the LA Times, Press Telegram and about 30 magazines.

One day I decided to subscribe to the WSJ, about 3O days later, out of the blue, my CC company doubled my limit.
I just call up and ask them to raise the limit. They do.
 
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