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Question By
psnwboard

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Credit Rebuilding
I am trying to decide what is the best option for rebuilding my credit score. My Credit Karma (Transunion) score was 650 in March 2014. An old collection showed up for $91. My score went down to 572 by August 2014. I paid the collection at the beginning of October, and my score has gone up to 596 as of 10/31/14.

Questions

1. Should I assume that my score will go back up to 650 now that the collection is shown as a removed collection on my creditkarma report. If so, how long will it take to rebound?

2. I am considering applying for an Amazon Rewards Visa. Is my score acceptable? Should I wait until my score gets higher to apply?

3. If I might get accepted I would like to apply now to begin making on-time payments, never carrying a balance, etc. Should I just apply? I don't think one inquiry could hurt my credit too much, but would like advice on that. If it would hurt my score by applying and I probably wouldn't get accepted, my other option is to wait until the beginning of next year when I get a tax refund to put towards a secured credit card.

So, apply now, wait and apply in a couple months, or wait 3-4 months and get a secured card?

Any advice would be much appreciated!!!

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Go with a secured card first

Helpful to 2 out of 2 people

Seeing that you have a collection account that could possibly stick to your credit reports for up to seven years (sometimes it will tell you when it will drop off the report), I suggest a secured credit card. Your credit score may not hold much weight in your appoval process having that on there.

Getting approved for an unsecured card without any other positve credit history will be tough. With a secured card you put up the collateral and usually after a year of good payments, they will switch it to an unsecured card and either give you your collateral back or add to your newly approved unsecured credit line. Most often, you get the $$ back.

Anyway, you are better off going 'secured' over a regular credit card and you won't have to risk getting denied and adding a hard inquriy to your credit report. 

I hope that makes sense :)

P.S. If you manage to open a credit account, never charge more than 30% of your credit limit. It will hurt your score no matter if you pay the balance in full every month.

Reply by
psnwboard

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Thanks for the advice.  I kind of thought that would be the best route.  I guess I just want to start rebuilding my credit sooner rather than later and it will be hard to wait a few months until I can afford a secured card deposit.  

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Helpful to 1 out of 1 people

 wait 3-4 months and get a secured card

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