Want to apply for cc - Lost job 2 wks ago

[Laine540]

I have been working on rebuilding credit for a year or so, after I had a BofA card charge off in Nov 2007 with a balance of $6600. I have had timely payments on 2 student loans, a car loan, and a closed cc since then, and in Nov 2008 my exp fako score was at 603. I applied for an Orchard Bank Mastercard on 2/2/09, and was approved for a secured card only. (By the way, Orchard Bank MC is run through HSBC, so they do the same soft inquiry deal to prequalify you for a card and offer you the ones you qualify for.)

Now i have lost my job and want to apply for one more credit card before my credit slips or shows any sign of the unemployment. Does anyone have any suggestions? I shop at Walmart and Target occasionally so a store card would be OK. I don't really want to put cash up for another secured card right now, but I would consider it if that's all I can do.

[esf215]

to be honest IMO. i think that you should not apply for a credit card right now in your situations. But if you really wanted to and had to apply for a cc , i would try to get a credit union cc or something.

[Laine540]

Thanks for the reply esf. It isn't that I need a cc right now, but I am trying to add a trade line to my credit report because I only have the 1 new cc, and 2 small student loans open. My other cc closed (even with no lates) because of the charge-off to the other cc.

I have been making payments on time to everyone for a year now, so there should be a card somewhere I qualify for. Now that I got the first credit card already, it would be a good time to get a store card or a gas card to work toward the mix of credit.

[Bigwoodystyl]

Now i have lost my job and want to apply for one more credit card before my credit slips or shows any sign of the unemployment.

It seems you have this backwards. If I were you, I would first find a new job. If you're diligent, your credit will not "slip" and you will show no signs of unemployment (other than being broke).

Further still, even if you are successful in this misguided goal of obtaining new, unsecured credit lines prior to your credit "slipping", those will most likely be "closed by credit grantor" as soon as you let your credit "slip".

To be blunt: you already have sub prime credit and a recent charge off. How far do you intend on slipping?

I don't really want to put cash up for another secured card right now, but I would consider it if that's all I can do.

After finding a new job, if I were you, I would save $1,000.

Take that $1,000 into a bank and open a savings account. Speak with an account specialist at the bank, tell him/her you are interested in a 24 month secured, "credit helper" installment loan. The bank will then "lend" you $1,000 (The balance in your savings will now be $2,000). The bank will place a $1,000 lien on your savings account, which will be released once the loan is paid. Now you make 24 monthly payments of roughly $46.00 to the bank. Total cost of the loan approximately $1,100.00.

You can now use the other $1,000 (from the loan) to open 2 secured credit cards.

Therefore, two years from now, you can have at the very least:

1 Installment never late and paid off and closed

Original balance $1,000

2 revolving credit cards with a limit of $500 each and never late paid as agreed.

All of your other negative history will be two years older, and you will have two years of solid credit history.

You will be surprised how quickly your scores can rise (provided your credit doesn't "slip").

This will only cost you approximately $100 in installment loan finance charges and 2 years of time. IMHO, this is the easiest way to go from sub prime to prime, and as an added benefit, you can deal with only prime companies of your choice. BofA, US Bank, National City, Citi all offer pretty good secured cards, and so do most credit unions.

[niquieg]

I would not seek new credit while unemployed that becomes too easy a situation that may lead to unwanted debt

[Laine540]

Hey everyone,

I understand what you all are saying - no one can recommend someone getting credit at a time when it may be too tempting to abuse it. That makes good sense.

I have been focused on improving my credit and I want to continue looking at my options to work on my credit, even while I'm not working. I have been trying to save up funds to settle my B of A charge-off, so I have some savings that I may not need for 4 or 5 months and there are ALWAYS options. Since no posters here are in favor of the new credit card idea, some of the other options I am considering are:

1) Paying down some old balances faster (doesn't make too much sense, because I might actually need the savings after a while)

2) a secured loan - which might be a good idea because I could have the whole thing paid off by the time I actually need the money, and no temptations later. I have the savings account in my credit union which has been there for 11 months already.

3) Settle my B of A charged-off card. This is a $6000 balance that charged off in Nov 2007. I am thinking of offering them $1000 as a settlement offer. If I told them that I have just lost my job, in this economy, it seems possible they would be tempted to accept it. The CA made me a $2500 settlement offer not too long ago, while I was still working.

So what do you guys think? I could use some objective advice.

[niquieg]

This is how I would approach your situation if it were me.

Continue to make timely payments. Since your debts are installment loans I would not attempt to chip them away they do not hurt your score as much as revolving debt counting towards utilization. Manage your savings to make sure your current day to day bills are paid, rather than attempt to resolve debts with no income coming in.

You currently have 5 positive tradelines reporting. Keep them positive,

Treat your orchard card right, use it every few months, keeping utilization under 10%, then PIF.

[Captain_Morgan]

I can't point the finger, I got everything I have right now, all being unemployed!

My CRA's shows the employer and all three match. I'm able to manage this and not have to over utilize it etc. In fact, I had to make a special trip to Target just to poke around and find something to put a balance back on there. Same with Sears.