Building New Credit

In addition to getting rid of the negative tradelines to increase your credit score, you must also establish new positive tradelines to start building some more positive credit history. Early on in my credit repair progress I applied for and received a couple of sub prime cards or credit rebuilder cards, the first of which was Orchard Bank MC. Initially they gave me a $500 credit limit, it is now $700. I also applied for First Premiere, and they gave a $300 credit limit. I do not recommend the latter of the 2, unless you just can't get a card through Orchard. Both cards have annual fees. Also another card that is fairly easy to get is the Hooter's MC, your credit scores should be upper 500's for this card. They gave me a $1000 credit limit and it does have fees, but also has a rewards program.

Recently I applied to my credit union for their Visa card. Figured I have a long history with them, what the heck and give it a shot. They gave me a $6000 credit limit, no annual fees. They also offer a MC, so I applied for that as well, another $6000 credit limit. This allowed me to close the First Premiere card with high fees and high interest with a low credit limit. Served its purpose by giving me 6 months good history.

I discovered that if you have scores in the upper 500's to low 600's that Kay's and Jared, basically any Sterling Bank creditors, are fairly easy to get. I got a Kay's at $5000 credit limit. One thing to note is that all these cards share the same credit limit, but it will show as separate tradelines on your credit report at whatever credit limit they give you.

The immediate result will be a slight decrease in credit scores, new accounts and the inquiries will hurt you short term. The long term effect is that you are now building a good utilization ratio. You want to be using less than 25% of your available credit at all times. Plus now I have some positives to build up a good history to offset the derogatory accounts that I may not be able to get rid of.