Advice on building credit

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gabo864
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Advice on building credit

Postby gabo864 » Wed Apr 29, 2015 9:07 pm

Hey everyone

I'm new to this forum and also to credit! I got my first Credit Card in June 2014, Visa card $500, then I got a Discover it $750, and a week ago I got an Everyday Card from Amex for $5500. According to Discover my current FICO score is 676. I really want to improve my credit score, but I'm not sure what to do. I almost always pay my balance in full and most of the time I pay it off weeks before my due date. What else can I do that will improve my Credit? Thanks.


takeshi
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Re: Advice on building credit

Postby takeshi » Thu Apr 30, 2015 12:46 pm

We would need to know what your credit is like in order to help you improve it. However, we can provide some general guidelines. When was the last time you pulled all 3 reports? You should be regularly reviewing them for accuracy and fraud.

Looking here
http://www.myfico.com/crediteducation/w ... score.aspx
you can see that the biggest slice is Payment History. It must be 100% positive. Not mostly. Not 99%. 100%. If you have an derogs they're impacting your payment history and probably holding your scores down so you need to look into addressing them.

Next biggest slice is Amounts Owed. Your revolving utilization (balance[s]/limits[s]) falls under that. Do not exceed 30% revolving utilization. If you need to reduce a balance that will report then you need to pay the balance down before the report date for the card. Most cards report on statement date but confirm for each of your cards. If you pay after the report date then the balance has already reported and the payment will not reduce the reported balance though it may help the next time the account reports.

Most other factors really just take time and responsible usage to build. Every time you open a new account you reduce your Average Age of Accounts (Length of Credit History). Over time your AAoA will increase. Applying for credit also adversely affects New Credit though you can't completely avoid new accounts. Open them as you need them. You have to find the right balance between improving your credit and meeting your credit needs.

Types of Credit benefits from having a mix of credit accounts. You have 3 revolvers. Installments such as a mortgage, auto loan, student loans, etc will help but don't just open a new account for scoring purposes. Open one when you need it.

Vermonster
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Re: Advice on building credit

Postby Vermonster » Thu Apr 30, 2015 12:55 pm

Sounds like you are doing everything right, so unfortunately all you can do is wait. I wouldn't go out of my way to do too much now, but adding a car loan or student loans will help show diversity.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

gabo864
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Re: Advice on building credit

Postby gabo864 » Thu Apr 30, 2015 7:40 pm

takeshi wrote:We would need to know what your credit is like in order to help you improve it. However, we can provide some general guidelines. When was the last time you pulled all 3 reports? You should be regularly reviewing them for accuracy and fraud.



What kind of info about my Credit would you need? Right now I use CreditKarma. Is this a good website? like I said my Credit Score is 676 according to discover, Credit Karma says my Score is Transunion 684 and Equifax 678 (Which score would you say is more accurate Credit Karma or the one given by Discover?). I have a total of 7 inquiries, I know these are not so good, but they are not all from Credit Cards, One was from Verizon and other home services (some of them are about 6 to 7 months old). My highest Credit card utilization was 34%, but most of the time I keep it under 30%. I have no derogatory marks never had a late payment, My credit payment history on CK is 100%, most of the time I pay in full or pay more than the minimum payment since I have 0% APR for the rest of this year on my discover and until june 2016 on my AMEX. My Credit History is about 8 months according to CK.

Should I keep doing what I'm doing? should I get one more credit card to help my debt utilization ratio? Thanks.

Vermonster
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Re: Advice on building credit

Postby Vermonster » Fri May 01, 2015 11:41 am

At the one year mark you could ask Discover for a CLI. Just make sure it is a soft pull.

Discover gives you a true TU Fico score so that is about as accurate as it comes. CK uses a Vantage 3.0 which can be a good estimation. CK is best to keep track of changes, not the actual score. Credit.com will give you a monthly EX score and report, though again it is not a Fico score. Your scores can vary between TU, EQ, and EX, but they should generally be close.

I wouldn't go for another card right now. That Amex will grow with you (61 day 3x cli, look it up). Let the inqs fall off and your AoAA increase and you will be over 700 soon.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

Ghoshida
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Re: Advice on building credit

Postby Ghoshida » Fri May 01, 2015 12:17 pm

gabo864 wrote:
takeshi wrote:We would need to know what your credit is like in order to help you improve it. However, we can provide some general guidelines. When was the last time you pulled all 3 reports? You should be regularly reviewing them for accuracy and fraud.



What kind of info about my Credit would you need? Right now I use CreditKarma. Is this a good website? like I said my Credit Score is 676 according to discover, Credit Karma says my Score is Transunion 684 and Equifax 678 (Which score would you say is more accurate Credit Karma or the one given by Discover?). I have a total of 7 inquiries, I know these are not so good, but they are not all from Credit Cards, One was from Verizon and other home services (some of them are about 6 to 7 months old). My highest Credit card utilization was 34%, but most of the time I keep it under 30%. I have no derogatory marks never had a late payment, My credit payment history on CK is 100%, most of the time I pay in full or pay more than the minimum payment since I have 0% APR for the rest of this year on my discover and until june 2016 on my AMEX. My Credit History is about 8 months according to CK.

Should I keep doing what I'm doing? should I get one more credit card to help my debt utilization ratio? Thanks.



Hello.

My thoughts (coming from someone who was in the same spot 2 years ago):

(a) Utilization: You've got a good enough profile for Discover. Try their CLI button. It should tell you if they want a HP before doing a HP, or give you a SP CLI straight-away. I got my first CLI through a HP, and it was fine with me. I needed the limit; you decide if you need it. If they indeed ask for HP, try with a large number, like 5k or 10k and let them counter. That should give you (along with the AMEX) enough room to play utilization game.

Who issued you the Visa card? Maybe they have an SP CLI policy as well?

30% is good, but 10% is better. Unless you get a CLI on Discover, you might want to keep $500-$1000 balance (ideally lower) on the AMEX and zero on the other two cards. Your score then should reach or exceed 700s.

(b) New Credit Card: Apply for new credit cards because you need their benefits (better cashback, rewards, miles, sign-up bonus, maybe BT deal) and not because you need utilization padding. This is my opinion; not everyone agrees to this. However, I think utilization is better handled through credit limit increases; save the HPs and AAoA dings for things like rewards and sign-up bonuses.

Hope it helps.
AMEX BCE | PRG || Barclaycard Sallie Mae || Capital One QuickSilver | Venture || Chase Freedom | Sapphire Preferred || Citi Dividend || Discover It || UFCU Great Rate || US Bank Cash+ #1 | Cash+ #2 | Club Carlson Plat | REI || Total CL $144.2k + PRG NPSL, not counting AU

gabo864
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Re: Advice on building credit

Postby gabo864 » Fri May 01, 2015 8:56 pm

Ghoshida wrote:
gabo864 wrote:
takeshi wrote:We would need to know what your credit is like in order to help you improve it. However, we can provide some general guidelines. When was the last time you pulled all 3 reports? You should be regularly reviewing them for accuracy and fraud.



What kind of info about my Credit would you need? Right now I use CreditKarma. Is this a good website? like I said my Credit Score is 676 according to discover, Credit Karma says my Score is Transunion 684 and Equifax 678 (Which score would you say is more accurate Credit Karma or the one given by Discover?). I have a total of 7 inquiries, I know these are not so good, but they are not all from Credit Cards, One was from Verizon and other home services (some of them are about 6 to 7 months old). My highest Credit card utilization was 34%, but most of the time I keep it under 30%. I have no derogatory marks never had a late payment, My credit payment history on CK is 100%, most of the time I pay in full or pay more than the minimum payment since I have 0% APR for the rest of this year on my discover and until june 2016 on my AMEX. My Credit History is about 8 months according to CK.

Should I keep doing what I'm doing? should I get one more credit card to help my debt utilization ratio? Thanks.



Hello.

My thoughts (coming from someone who was in the same spot 2 years ago):

(a) Utilization: You've got a good enough profile for Discover. Try their CLI button. It should tell you if they want a HP before doing a HP, or give you a SP CLI straight-away. I got my first CLI through a HP, and it was fine with me. I needed the limit; you decide if you need it. If they indeed ask for HP, try with a large number, like 5k or 10k and let them counter. That should give you (along with the AMEX) enough room to play utilization game.

Who issued you the Visa card? Maybe they have an SP CLI policy as well?

30% is good, but 10% is better. Unless you get a CLI on Discover, you might want to keep $500-$1000 balance (ideally lower) on the AMEX and zero on the other two cards. Your score then should reach or exceed 700s.

(b) New Credit Card: Apply for new credit cards because you need their benefits (better cashback, rewards, miles, sign-up bonus, maybe BT deal) and not because you need utilization padding. This is my opinion; not everyone agrees to this. However, I think utilization is better handled through credit limit increases; save the HPs and AAoA dings for things like rewards and sign-up bonuses.

Hope it helps.



Hey everyone

So as soon as I read y'alls answers I went to Discover and I clicked on CLI, it asked me about my annual income and my employer so I typed in all the info, at the bottom it said "After reviewing your application, we may need to pull a credit bureau report, which may affect your credit score. In these cases, we will proceed with the application only with your consent." So I clicked submit because I'm guessing if they required a HP they would let me know first, but as soon as I clicked Submit, it said they had approved me for a $3000 credit increase on my account :D. I'm guessing they only did a soft pull since I was never warned about having to do a HP on my credit scored, right?! I'm very excited because now I have $3750 with my Discover card :D

Btw, My Visa card is with a local bank, it's a Credit Union bank. I didn't get any promotions with this card since it was the very first card I got since every other issuer kept denying me a card, but even though I only have $500, it did help build my credit a bit more and be able to get the other 2 cards. I don't really use this card so it never has a balance.

Now my question is, I know I should be under 30% utilization, but is this 30% per each card or the total balance of all my cards? Thanks guys you have been very helpful.

Vermonster
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Re: Advice on building credit

Postby Vermonster » Sun May 03, 2015 12:37 am

if Discover warmed you like that then I think it is a hard pull. Still it is worth the HP for a cli to 3000.

Ideally it is 0%on as many cards as possible and >30%on one card. But this really only matters if you are trying to maximize score.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k



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