Weary Traveler Posted July 5, 2013 Report Share Posted July 5, 2013 Well, in another month all of the Credit Card accounts that went delinquent when I lost my job will finally be SOL (2 of them are now SOL, 1 will be in 10 days, and the other on 8-2-13). I'm starting to formulate a strategy to begin creating positive entries on my credit report once I'm a couple months past the SOL and am wondering where a good place to start would be. I clearly have no intention of reviving those old debts and settling them, now that outrageous interest has been added to them, and honestly, I'm not even certain if settling them would change my credit score or not. When I look back at my credit history prior to my job loss, I see years and years worth of good credit history; Auto Loans, auto leases, motorcycle loans, educational loans...all paid on time/as agreed. Currently, I've still got one positive item that gets recorded every month. A mortgage loan on a home, converted to rental property, when I lost my job. In roughly 3 years, all of the derogatory information will be purged from my credit file. I'm considering getting a secured credit card from my bank and charging a few things on it and paying it off every month. I'm honestly a little nervous and paranoid about getting a credit card. I've survived just fine without them over the last 4 years, using my debt card to make purchases and saving for items that are more expensive. If I can't afford something, I don't buy it. I'm also much more cautious with my decisions to make purchases than I use to be. Thinking back about all the insignificant things that I charged on credit cards now, makes me feel pretty foolish. I'm considering getting a secured credit card from my bank and charging a few things on it and paying it off every month. I can't afford something, I don't buy it. I do, however, think that I might like to purchase another home after all of this drops off and realize that I probably need to get some positive credit history in order to do so. I was fortunate to find an amazing job in my field, and am now making more money than I ever have in my life. I'm honestly a little nervous and paranoid about getting a credit card. I've survived just fine without them over the last 4 years, using my debt card to make purchases and saving for items that are more expensive. I'd be fine with the idea of paying cash for a car when I need it, but property takes some serious cash in California. So, thoughts about this? Any foreseeable problems getting a secured card? Do people ever get rejected for those? I mean, I have a reasonable sum of money with this Bank and a "premium account" due to retirement funds with them, etc. Link to comment Share on other sites More sharing options...
shellieh98 Posted July 5, 2013 Report Share Posted July 5, 2013 I took an online seminar 2 years ago, and it really helped me with my finances. You really don't need credit, but there are ways to get it without going into debt. This is the guys website that the coarse was through. http://www.daveramsey.com/home/ Link to comment Share on other sites More sharing options...
admin Posted July 5, 2013 Report Share Posted July 5, 2013 So, thoughts about this? Any foreseeable problems getting a secured card? Do people ever get rejected for those? I mean, I have a reasonable sum of money with this Bank and a "premium account" due to retirement funds with them, etc. Honestly, I would join a credit union pronto and see if you can get an unsecured through them. As far as secured cards, people only get turned down for those if you don't have the money to open a savings account with them. Secured cards are definitely a good way to go, just make sure you don't charge too much money on them so the credit utilization rate is low. 1 Link to comment Share on other sites More sharing options...
sevenx7 Posted July 5, 2013 Report Share Posted July 5, 2013 I Went the secured route...2 In factIt made a HUGE impact on my score. I Went through a credit union I Joined in fed 2013 and opened my secured account at the same time. I tried getting it unsecured and was denied, In hindsight I should have waited a full year or 10 months. This is all with having about 10,000.00 in that account. I would get the secured credit card from a credit union sooner than later. Just make sure to read the terms, Most CU Secured cards are not too bad since you are pretty much borrowing against your money, Just beware the preditary cards, they are fee gougers and after the first year they will HIKE UP everything since the CARD act ends. Link to comment Share on other sites More sharing options...
admin Posted July 5, 2013 Report Share Posted July 5, 2013 after the first year they will HIKE UP everything since the CARD act ends.@sevenx7 - The CARD act ends? Link to comment Share on other sites More sharing options...
sevenx7 Posted July 5, 2013 Report Share Posted July 5, 2013 In 2009 the CARD act put restrictions on what fees they were allowed to charge for predatory "bad credit" cards so that they can only charge 25%of the credit limit in fees the first year. So say you have a 200.00 limit, Well the most they can legally charge in fee's is 50.00I don't think it applies to secured cards, (since most credit unions dont subscribe to that bleed them dry mentality) but the people that cater to the high risk/bad credit crowd do... Link to comment Share on other sites More sharing options...
admin Posted July 5, 2013 Report Share Posted July 5, 2013 OK, I thought you were saying that the CARD act was ending. My bad. Link to comment Share on other sites More sharing options...
kutuzov Posted July 5, 2013 Report Share Posted July 5, 2013 Capital One is a good rebuilder cc, they really suck for my taste, and are very customer unfriendly but for the purpose of rebuilding credit, they did help me since my credit was bad and they gave a cc with no annual fee unsecured CL of just 300 and then a CLI to 500, in 2 years nothing else, never again grew. Recently in march I got approved for a Barclay rewards card, with 1.3, needles to say I cancel crap1. Also I do not like them, you can do the same as me USE them to accomplish your goals and then dump them. Link to comment Share on other sites More sharing options...
Weary Traveler Posted July 5, 2013 Author Report Share Posted July 5, 2013 Capital One is a good rebuilder cc, they really suck for my taste, and are very customer unfriendly but for the purpose of rebuilding credit, they did help me since my credit was bad and they gave a cc with no annual fee unsecured CL of just 300 and then a CLI to 500, in 2 years nothing else, never again grew. Recently in march I got approved for a Barclay rewards card, with 1.3, needles to say I cancel crap1. Also I do not like them, you can do the same as me USE them to accomplish your goals and then dump them. Eh...I don't think I'd be welcomed by the Vikings. Glad they worked for you, but given their nefarious methods, I'll be steering clear of their port. Honestly, I would join a credit union pronto and see if you can get an unsecured through them. As far as secured cards, people only get turned down for those if you don't have the money to open a savings account with them. Secured cards are definitely a good way to go, just make sure you don't charge too much money on them so the credit utilization rate is low. Thanks, Admin. I do have that option through the company that I work for, so I'll have to check it out. I currently bank with "W.F." and have done some reading on their secured card. What percentage of utilization do they recommend you not exceed? Link to comment Share on other sites More sharing options...
kutuzov Posted July 5, 2013 Report Share Posted July 5, 2013 I hate them too, but in the subprime cc, they are among the less evil. If you pay in full and just use the cc from your pocket (no online etc), you'll be fine. As soon as you can get a more prime one, right now Barclay is the easiest one after crap1, then ditch it. It's a game. Also try your local CU they might help too. Link to comment Share on other sites More sharing options...
willingtocope Posted July 6, 2013 Report Share Posted July 6, 2013 Actually, if you bank with WF, have your paycheck direct deposited, keep a reasonable balance in checking, and maybe have savings with them...they might give you an unsecured card right now...but... Your current method of having a debit card on your checking, IMO, is much better than having a secured card anywhere. In effect, the debit card is secured by your checking account, and it doesn't cost you a fee (as long as you don't use other banks ATMs). Contrary to popular belief, a secured credit card does not help with your actual FICO credit scores. And, just to make sure you know, neither the SOL nor falling off your CRs will make those old debts go away. They're still collectable, and you may be reaching the point where you'll start receiving 1099c's for the "found income". Link to comment Share on other sites More sharing options...
Weary Traveler Posted July 6, 2013 Author Report Share Posted July 6, 2013 Actually, if you bank with WF, have your paycheck direct deposited, keep a reasonable balance in checking, and maybe have savings with them...they might give you an unsecured card right now...but... Your current method of having a debit card on your checking, IMO, is much better than having a secured card anywhere. In effect, the debit card is secured by your checking account, and it doesn't cost you a fee (as long as you don't use other banks ATMs). Contrary to popular belief, a secured credit card does not help with your actual FICO credit scores. And, just to make sure you know, neither the SOL nor falling off your CRs will make those old debts go away. They're still collectable, and you may be reaching the point where you'll start receiving 1099c's for the "found income". Any idea whether or not, secured credit cards are reported to the 3 bureaus? I mean, clearly my debit card isn't, but my objective would be to start building a positive credit line. In regards to the 1099c's. Honestly, I'd much rather deal with the IRS than with these idiots. When I was at the height of my unemployment situation I had to tap money from an IRA in order to survive. I ended up owing the IRS about $8,000 which I didn't have the funds at the time to pay back. I set up a payment plan at an interest rate of %4.0 and paid it off in a little over a year. I'll take the Feds over Crapitus Uno or the JDB any day. Link to comment Share on other sites More sharing options...
willingtocope Posted July 6, 2013 Report Share Posted July 6, 2013 Yes, secured cards do report to one or more of the CRAs. When they calculate their FAKO scores, they do include them in their calculations...after all, the FAKOs are intended to mimic the "sucker score" which CCs use to determine who they will make money on...and to make the consumer think they're a good thing. FICO scores recognize secured cards and while they are included in the sucker score, they carry much less weight than unsecured. ETA: Yes, getting a 1099c and paying the taxes is less than the original debt...but...that stil doesn't make the debt go away. If, at some point in the future, you get tired of the CAs calling and decide to pay up, you then get to convince the IRS that they owe you a refund. Link to comment Share on other sites More sharing options...
admin Posted July 7, 2013 Report Share Posted July 7, 2013 Thanks, Admin. I do have that option through the company that I work for, so I'll have to check it out. I currently bank with "W.F." and have done some reading on their secured card. What percentage of utilization do they recommend you not exceed?@Weary Traveler - don't use more than 25% of your limit. 1 Link to comment Share on other sites More sharing options...
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