Why It's So Important to Build Credit Early

For just about anything you want to get off your chest about credit cards.
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aquarius7373
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Why It's So Important to Build Credit Early

Postby aquarius7373 » Sat Feb 14, 2015 9:39 am

I'm one of the lucky ones. I was able to begin building credit from the early age of -10. Thanks to my parents, Equifax reports my birthday (and oldest credit line) being 10 years older than I actually am. Not sure what the consequences of that will be later down the line, but I digress.

My wife's mother was inherently fearful of credit cards and the damage it <i>can</i> do to a person. So my wife (Joanna) had always been told to pay in cash, never use a credit card. Joanna and I met and started dating when we were 14. I already had a credit card in my name for 2 years at this point. (lol)

We got married at the age of 21. We've owned two homes and four cars together. She pays all my bills, so I really have her to thank for paying all my bills on time and keeping my credit as good as it is.

We started our first business at the age of 16 and our second at the age of 22. All bills have always been in my name. Ever since we were about 18 I tried helping her get department store charge cards in her name, but she would always be denied. Walmart? DENIED. Macy's? DENIED. Target? DENIDIEDIED etc etc etc.

Thanks to a fib on my birthdate resulting in a credit card at the age of 12 and being put on my parent's business credit card as an AU at the age of 13, it's now 12 years later (I'm 25) and I have 11 credit cards in my name, not a single late payment ever, a total credit line of over $100,000, and a credit score of 797.

My poor wife, on the other hand, has labored over my bills for the past 9 years (essentially my own personal CEO), and she's got a lousy credit score of 644. I'm going to get that over 750 in the next few years though, now that I'm really getting into this credit-game.

SO - WHERE TO BEGIN. I found the Discover It card a few days ago and decided to sign her up for it. Spoiler alert. She was denied. Darn. BUT they offered a secured credit card (which I had never heard of at the time) So essentially you give them some money (between $200-$2,500 in $100 increments) and that now equals your available credit. Once her credit score jumps over 100 points or so, I'll see if she can upgrade to an unsecured card, at which point, she'll receive her deposit of $300 back and she'll have a real credit line of $1,000 or so.

In the mean time, I'll add her as an AU on my main credit cards (listed below, for funzies).

I tried getting her credit report so I could see if she has any historical lines of credit, but we were unable to answer the dumb security questions (she was apparently approved for one of the dozen cards she'd signed up for over the past 7 years, but we were never notified and never received the card 0_0) So we're currently awaiting her credit report to arrive via snail mail.

The cards I will be adding her to are all brand new, as I just got into the credit game a few days ago. I assume she'll take a hit from a few new lines of credit having brand new credit history, but in the long run, it's always better to have multiple positive lines of credit with long history than no history at all. (Duh)

THE POINT OF THIS POST: If I were in the same boat as her growing up and we both had low/no credit history, we never would have gotten the insanely low rates on our mortgages, cars, insurance, etc. Hence why everything has always been in my name, further perpetuating her non-existent credit history.

IF YOU'RE A PARENT WITH GOOD CREDIT HISTORY - please add your child as an authorized user on your (preferably American Express) credit card! If you hit a brick wall and know you're about to begin making late payments, think of your child first! Get him/her off your card!

Joanna's little sister is 15 now. I will be adding her to my Amex card and I won't be telling her (per her father's approval, not her mother's). I'll use the card extremely seldomly (though I don't think this is necessary; please advise below). When she turns 18 and has a good credit card of her own, I may take her off. I just don't want her to have the same problems Joanna has.

No mature responsible person deserves that.

______________________________________

Always in my wallet:
American Express Blue Cash Preferred (25k, 6% back on groceries)
Barclays Sallie Mae (6.3k, 5% back on gas and amazon)
Citi Double Cash Back (5k, 2% back on everything else)
BBT Visa (10k, and because it's a visa)

What I want:
Capital One Quicksilver Visa (Visa with 1.5% cash back to replace BBT visa)
Barclays Rewards Master Card (for Joanna, 2% back on utilities)

+ additional cards I don't use, they just increase my limit and average history.
[size=60]My Wallet - Primary Cards:
Amex Blue Cash Preferred (25k ~ 6% groceries)
Barclays Sallie Mae (6.3k ~ 5% gas and amazon)
Citi Double Cash Back (5k ~ 2% everything else)

My Wallet - Secondary Cards:
Chase Southwest Business (30k ~ AU)
BBT Visa (10k ~ because visa)
Home Depot Credit (10k)
Amazon Credit (6k)

Not Used:
Cap One Credit (2.15k)
Macy's Charge (1k)
Kohls Charge (1k)
JC Penny Charge (1k)
Macy's Credit (0.5k)

Future Cards:
Cap One Quicksilver Visa (1.5% everything to replace BBT visa)

TCL : $97,950
Credit History : 12 years - always PIF
FICO EQ : 797
FICO TU : 791

I'm a newbie - all advice is appreciated![/size]


aquarius7373
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Postby aquarius7373 » Sat Feb 14, 2015 5:09 pm

UPDATE - I misread my report. My oldest line of credit BEGAN when I was 12. Sorry. I can't edit my original post :(
Sorry #2 - that was long.
[size=60]My Wallet - Primary Cards:

Amex Blue Cash Preferred (25k ~ 6% groceries)

Barclays Sallie Mae (6.3k ~ 5% gas and amazon)

Citi Double Cash Back (5k ~ 2% everything else)



My Wallet - Secondary Cards:

Chase Southwest Business (30k ~ AU)

BBT Visa (10k ~ because visa)

Home Depot Credit (10k)

Amazon Credit (6k)



Not Used:

Cap One Credit (2.15k)

Macy's Charge (1k)

Kohls Charge (1k)

JC Penny Charge (1k)

Macy's Credit (0.5k)



Future Cards:

Cap One Quicksilver Visa (1.5% everything to replace BBT visa)



TCL : $97,950

Credit History : 12 years - always PIF

FICO EQ : 797

FICO TU : 791



I'm a newbie - all advice is appreciated![/size]

whit
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Location: ca

Postby whit » Sat Feb 14, 2015 6:37 pm

How long have you owned the homes and cars, are both homes currently in your name only or you and your wife 's and what's the mortgage like on it in comparison to what it's currently worth or appraised for?

It seems unlikely that if your wife was able to get on both homes with you, that you guys currently own, either free of mortgage or with, But not be able to get a credit card

Especially with discover, because they're pretty understanding, I didn't even realize discover it has a secured version of their cc--usually when I see students with big loans and little to no income, I would recommend them

With mortgage it's usually better debt then cc or student loans because there's a collateral for it--so if anything it should help your wife build credit unless its a large loan in comparison to your incomes.

aquarius7373
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Location: Florida

Postby aquarius7373 » Sat Feb 14, 2015 6:46 pm

No, my wife hasn't been on any loans. They're just in my name. We sold our first house, so only have one mortgage now. Owned the first home for three years before selling, have owned the current home for 3 years. Mortgage is pretty good. 3.25%, got it for 44k with 10k down. Currently appraised at about 77k.

Regarding the Discover It card - apparently they don't advertise it. and only some declined are offered it.
[size=60]My Wallet - Primary Cards:

Amex Blue Cash Preferred (25k ~ 6% groceries)

Barclays Sallie Mae (6.3k ~ 5% gas and amazon)

Citi Double Cash Back (5k ~ 2% everything else)



My Wallet - Secondary Cards:

Chase Southwest Business (30k ~ AU)

BBT Visa (10k ~ because visa)

Home Depot Credit (10k)

Amazon Credit (6k)



Not Used:

Cap One Credit (2.15k)

Macy's Charge (1k)

Kohls Charge (1k)

JC Penny Charge (1k)

Macy's Credit (0.5k)



Future Cards:

Cap One Quicksilver Visa (1.5% everything to replace BBT visa)



TCL : $97,950

Credit History : 12 years - always PIF

FICO EQ : 797

FICO TU : 791



I'm a newbie - all advice is appreciated![/size]

whit
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Location: ca

Postby whit » Sat Feb 14, 2015 7:16 pm

That makes sense

I'm assuming that the mortgage company told you that you're better off just applying for yourself rather than adding her on because that would lower the rate you're afforded.

At least she's has the opp for that; I've read some who are initially declined, if they speak with the rep they can sometimes get it reconsidered but it's first I heard of it (secured), maybe they're transitioning over for those who don't have good credit or no credit, because it doesn't make sense imho to allow people who have credit score be kind of shakey because of past but not allow those with none (not saying they shouldn't allow those with poor history no chance but just also allow those with little to none)

I feel sorry for people whose never had a credit card because they're under the impression that no credit is better than bad credit & as your example shows, that's just not true

aquarius7373
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Location: Florida

Postby aquarius7373 » Sat Feb 14, 2015 8:01 pm

absolutely
[size=60]My Wallet - Primary Cards:

Amex Blue Cash Preferred (25k ~ 6% groceries)

Barclays Sallie Mae (6.3k ~ 5% gas and amazon)

Citi Double Cash Back (5k ~ 2% everything else)



My Wallet - Secondary Cards:

Chase Southwest Business (30k ~ AU)

BBT Visa (10k ~ because visa)

Home Depot Credit (10k)

Amazon Credit (6k)



Not Used:

Cap One Credit (2.15k)

Macy's Charge (1k)

Kohls Charge (1k)

JC Penny Charge (1k)

Macy's Credit (0.5k)



Future Cards:

Cap One Quicksilver Visa (1.5% everything to replace BBT visa)



TCL : $97,950

Credit History : 12 years - always PIF

FICO EQ : 797

FICO TU : 791



I'm a newbie - all advice is appreciated![/size]

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Vattené
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Location: US

Postby Vattené » Sun Feb 15, 2015 12:13 am

I feel exactly the same way. I have a relative by marriage that has recently fallen into the all-credit-is-evil-no-exceptions camp after having mismanged it in the past. It is better than the alternative, but she could also learn to use it for good. My parents were always very financially responsible and conservative (and I like to think that rubbed off on me), but they can't get credit now when they want to.

I talked my father into applying for the Walmart card to get a bigger discount on gas than the prepaid cards he currently uses. He was denied. The house has been paid off for years (it may not even be on his credit report any more), and all cars are purchased with cash. I'm not saying you should pay hundreds or thousands in car loan interest just for a higher credit score, but having a good credit profile does have tangible benefits - even for someone who isn't planning on ever getting another mortgage. My parents might have a hard time getting a prime cash rewards credit card (don't know for sure because I couldn't talk them into trying for that - mainly due to generational differences and unease around using credit cards for so much). My mother was able to get them a different store's card (dad was denied for that too, so all thanks goes to shopping networks).

The puritanical approach to credit bugs me. It is a tool that can be used to your benefit, but can also harm you if not respected and used properly. I've never paid a cent in credit card interest, but hopefully I will have strong enough credit for the best terms on a mortgage when the time comes. I can't believe that I'm trusted with $29,000 just between the two cards I regularly use. I have more credit that I know what to do with, but I know I will never go on a shopping spree because I don't view it as $29,000 of "money" I have.

...Actually maybe alcohol is a better analogy. Yes, there are some people that are better off just never touching it. For most, however, it can be a wonderful thing if people are educated about it and use it responsibly. I've been around plenty of people that don't know how to handle either, but I've managed to put both to great use.
-Vattené
FICO-8:
EX - 827 (4/17) | TU - 812 (4/17)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

aquarius7373
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Location: Florida

Postby aquarius7373 » Sun Feb 15, 2015 10:39 am

Vattené wrote:I have more credit that I know what to do with, but I know I will never go on a shopping spree because I don't view it as $29,000 of "money" I have.


Yeah, I don't quite understand how people spend more than they have. It's best to think of credit cards as debit cards and use an app to track your current debts to bank account funds. I think, anyway.
[size=60]My Wallet - Primary Cards:

Amex Blue Cash Preferred (25k ~ 6% groceries)

Barclays Sallie Mae (6.3k ~ 5% gas and amazon)

Citi Double Cash Back (5k ~ 2% everything else)



My Wallet - Secondary Cards:

Chase Southwest Business (30k ~ AU)

BBT Visa (10k ~ because visa)

Home Depot Credit (10k)

Amazon Credit (6k)



Not Used:

Cap One Credit (2.15k)

Macy's Charge (1k)

Kohls Charge (1k)

JC Penny Charge (1k)

Macy's Credit (0.5k)



Future Cards:

Cap One Quicksilver Visa (1.5% everything to replace BBT visa)



TCL : $97,950

Credit History : 12 years - always PIF

FICO EQ : 797

FICO TU : 791



I'm a newbie - all advice is appreciated![/size]



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