Next Steps After Paying Everything Off, Starter Cards, Disputes?

[silentjc]

Finally posting on this forum after gawking for a while. 🙂

 

I've been working on my credit repair the last couple of years and am kind of at that point where I'm not sure if there is anything else I can do but wait it out.

 

Had a medical issue back in 2016 / 17 which contributed to somewhere around 12 account charge-offs and a car repossession. Over the past year and a half, I've been aggressively paying the accounts off (all are at zero balance, settled), disputed as many as I could (several fell off, am doing another round this month), opened five rebuilder / secured / sub prime cards starting two years ago (Citi Secured, Self Secured, Cap 1 Secured, Cap 1 Unsecured, Credit One Unsecured), did the Self Lending self loan (like 6 months left on that one), Experian Boost, have had a high interest car loan the last two years, am about to replace it with a newer car loan at a lower rate, and obviously keep cards paid off every month and paid on time (*accidentally had a 30 day late when I was changing banks and forgot to update the account that was on autopay). 

 

Looks like stuff starts aging off in 2023 and 2025. Scores went from the low 500s to 696 Trans, 712 Equifax, 625 Experian.

 

The problem I'm having is that even with everything settled, zero balances, and "good" scores," I'm still in purgatory when it comes to getting an actual decent points card. Capital One gave me an unsecured one a few months ago, but it's a $300 limit on a non rewards card. And since I already have two cards with them (one which is my oldest card now), even though their my "best bet" in the nearterm for a better card, i'm at their card limit. 

 

Goal Cards in the future are Chase Sapphire, AMEX Blue, AMEX Gold, and Citi Premier. 

 

Current plan is to just keep sending dispute rounds every few months, keep balances at zero, not apply for anything new at least until early 2022. 

 

Is there anything I'm missing? Anything I can do sooner to help compensate for the scars from the past on my credit report?

[schizcat]

Sounds like your goals are in place. The COs are probably hurting the most. You may have some luck with goodwill letters if this was medical related. Use your cards and PIF each month if you can. You will need to build credit back. You may want to keep a small balance on one card for reporting. Also try to join a credit union as they can be more forgiving with loans and credit cards. Sometimes you just have to play the waiting game. 

[cv91915]

First, welcome. 

 

A couple of thoughts on the go-forward plan:

 

- What is the highest limit of any of your cards, and do any of your current secured cards allow you to add to your deposit to get a higher limit?  Future prime approvals may be easier to obtain if you have a history of managing a healthy credit line.  If your current secured cards won't grow with more deposits (or won't grow significantly higher than they are now), you could consider another one.  The secured card I had allowed limits up to $100,000.  This can be a powerful lever down the road as others are evaluating how much credit to give you.

 

- How old is your oldest account?  Do you know someone with a mainstream V/MC account that was opened 5, 10, 20+ years before that (grandparent, parent, aunt, friend, etc.)?  Account age is a major factor in your scores.

[hdporter]

On 8/12/2021 at 7:45 AM, silentjc said:

I've been working on my credit repair the last couple of years and am kind of at that point where I'm not sure if there is anything else I can do but wait it out.

 

 

Had a medical issue back in 2016 / 17 which contributed to somewhere around 12 account charge-offs and a car repossession. Over the past year and a half, I've been aggressively paying the accounts off (all are at zero balance, settled), disputed as many as I could (several fell off, am doing another round this month), opened five rebuilder / secured / sub prime cards starting two years ago (Citi Secured, Self Secured, Cap 1 Secured, Cap 1 Unsecured, Credit One Unsecured), did the Self Lending self loan (like 6 months left on that one), Experian Boost, have had a high interest car loan the last two years, am about to replace it with a newer car loan at a lower rate, and obviously keep cards paid off every month and paid on time (*accidentally had a 30 day late when I was changing banks and forgot to update the account that was on autopay).

 

You've hurdled the key threshold to credit rebuilding after your credit goes very south:  You have open accounts that you're actively using.  From that point forward, time is your ally.  Use it to your greatest benefit.  Let me address a couple of comments in your post:

 

Re credit disputes:  Early successes may give the impression that this is the "gift that keeps on giving".  However, the utility of new disputes, when past ones have come back "confirmed by creditor" quickly drops to "0".  At a point, the CRA's won't even consider additional disputes, considering the account detail in question to have been previously confirmed.  I suggest that it may be time to focus your efforts on more constructive avenues.  (Bear in mind the moral of "They Boy Who Cried Wolf":  There may come a time where you have a credit reporting inaccuracy that you want to CRA's to attend to with some urgency.)

 

Re credit lines with a fee:  When rebuilding, credit cards with annual fees and/or security are more readily accessible and can be a valuable tool.  However, "more isn't necessarily better".  I would recommend to anyone that they limit themselves to two high quality accounts, and to use them regularly.  That's all that's necessary to ultimately persuade issuers of non-fee cards over time that you're a higher quality risk. 

 

My recommendation would be to immediately dump Credit One, unless you're only paying $49/year or less.  (Even then, as soon as you have two unsecured cards without an annual fee, I'd dump this sucker FAST.)

 

Depending upon card fee and card limit details, I'm inclined to suggest that you may wish to dump one or both Cap One cards.  If the unsecured card has no fee, then you're welcome to keep it but, having a very low credit limit, it's appears to be one of their "rebuilder" card and about as useful as a dog carcass -- it won't grant significant credit line increases as your credit improves, nor will they convert it to another useful product (which would keep the account age intact).  Of course, I suggest holding on to one of these plus the Citi until such time as you have obtained a second high quality card.

 

(There's an adage, "never close a credit card".  That should always be revised to "a no-fee credit card".  Once you open a card, you gain the benefit of it's age for FICO purposes, open or close.  Yes, it will drop 10-years post closure, but I wouldn't suggest someone keep a fee-based card open for credit age purposes any more than I'd suggest they drag the body of a deceased love one around for sentimental reasons.)

 

As @cv91915 suggests, having a secured card that will increase to a respectable limit with a sufficient deposit can be an asset in signally to other creditors that you manage a higher credit line, keeping your reported balance to no more than 20% or 30% of the limit (of course, ideally you won't revolve a balance and incur interest).  Give your secured Cap One a review and decide if it's a keeper from this perspective.  But your Citi Secured is a champion by comparison -- it typically will permit a reasonably high deposit-based credit limit, and it will "graduate" to one of their more valuable no-fee products.

 

Re new delinquencies:  I suggest you take stronger responsibility for your actions.  I'm not rapping you on the knuckles here ... just make sure that you're perspective on things are a solid match to what's transpired.  That will assist you in keeping focused on your goals.

 

Missing an account due date definitely qualifies as an "accident", when it's infrequent (as I assume this was).  Letting a delinquency remain outstanding until it's 30 days past due is a symptom that you've become a bit negligent.

 

Credit reporting has "accident forgiveness" built into the system:  No delinquency is reflected until it ages to "30 days past due".  In the interim, at minimum, you'll receive your next monthly statement one to three seeks subsequent to the missed payment, displaying that the account is delinquent and assessing a late fee.  If you enforce the discipline upon yourself of opening all your mail daily (or at first opportunity, if you're away) and acting immediately on anything time-sensitive, you'll pop a payment onto the issuer's website in plenty of time to avoid a "30 day past due" status.

 

Furthermore, if you make the late payment immediately upon statement receipt, once it's credited, you can call the issuer and they'll typically reverse the late fee (typically limited to once every 6 or 12 months) as well as any interest that posted (on an account on which you otherwise PIF and avoid finance charges).  That's a $50 "get ouf of jail " card right there).

 

You can protect yourself even further with more active notice of a delinquency:  Most issuers have email/text notices that you can activate so that you're reminded of an approaching due date, or notified of a missed payment.

 

Bottom line, with pro-active behavior, you can be confident that you won't incur another "accidental" 30-day late going forward.  (If I seem to be stressing this section, it's because this was instrumental in by "rebuilding")

 

On 8/12/2021 at 7:45 AM, silentjc said:

Is there anything I'm missing? Anything I can do sooner to help compensate for the scars from the past on my credit report?

 

Some people describe "credit building" as a game.  It it is, then it's one of patient strategy.  You repair what adverse reporting you can, and you start rebuilding as opportunities permit.  Where you're granted revolving credit, you actively use it to induce future credit line increases.  Waiting for adverse entries to drop needn't be torture.  In the interim, make sure what will be left when they have dropped shows a progressively intelligent record of credit use.