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whats the best way to rebuild my credit?

i am also trying to obtain a new car too. my current scores are equifax 579 trans 594 experian 596. i had some things deleted from cr to help. i have a new secured orchard card since june 07 and bank with BofA. the card is my only line of credit.
with my scores what would be 2 cards to apply for? i know an installment account would help also, but with my scores im afraid to apply for anything. i hear jewelry stores/furniture stores i just don’t know what to apply for that will help me

Well, you’re off to a good start. You’ve managed to get some things off your report which should help. The key to rebuilding your credit will be that Orchard Bank secured card (I’ve had one before myself). This is how your score is broken down:

1. Payment history- 35%
2. Total debt owed vs. available credit-30%
3. Length of time establishing credit- 15%
4. Types of credit established-10%
5. Inquiries and new accounts- 10%

Since you just opened the card in June ’07, #5 would be affected. As you know, the deposit with that Orchard Bank card is linked to a savings account which will gain interest, which won’t be much, but it’s better than just sitting there. Now this is a prime opportunity to not only custom-build a high limit credit card, by saving up for your down payment at the same time. What I mean by that is this, add to the deposit to raise the credit line as high as you can get it (the max is $15,000) so that when it reports that high limit will give you a cushion between what your total debt and what your available credit (factor #2) Now the trick to using the card is this: treat your Orchard card as if it only had a $50 limit, and you’re only going to use $20 of it every month. This way the balance doesn’t get out of hand, which makes it very easy to manage. Just make a small purchase, then pay it off while adding to the deposit every month. Keep in mind that the deposit is going to be used for 2 things: to increase your limit on your card while you’re building credit, and then once it converts to a regular one, it will turn into a nice down payment. That’s the reason for using the card VERY LIGHTLY. It’s important to pay on time and keep the balance low if not 0. The card should convert to a regular one around December of ’09, since it takes about 18 months of payment history. That should give you plenty of time and opportunity to build that limit up as high as possible and have a nice down payment. Your Orchard account won’t have a positive affect on your score until January/February ’08.

In the meanwhile, since you bank with Bank of America,if I were you, I would repeat the process, since B of A offers secured cards too. Since you’re an account holder, it should be easy to get one of these cards. You don’t want to waste too many points applying for credit, because each time you apply it creates a “hard inquiry” that can lower your score 5-10 points regardless if you’re approved or not. (#5 again) A secured card, as you know gives you the best chance of getting a credit card, so definitely look into that. This way, you have a couple of Credit Cards working for you while you’re building credit.

Rebuilding or even building credit doesn’t happen overnight, it will take a lot of patience, and discipline in order to get the results you want.

Hopefully, my answer helps you out

Good Luck!

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