Thin Credit File/Need Help on Increase

For just about anything you want to get off your chest about credit cards.
8 posts
EatDressWell
Green Member
Green Member
 
Posts: 4
Joined: Tue Jun 14, 2016 12:37 pm

Thin Credit File/Need Help on Increase

Postby EatDressWell » Tue Jun 14, 2016 1:17 pm

Hi there -

I come here to read up on credit stuff and I've decided to join because I have a question of my own. I have a pretty thin credit file. Currently in my late 20's and only acquired my first credit card April 2015 -- everything I've paid in cash and the only installment I had was my car --which I paid off May 16. With that being said, my fico is just under 600 and I pay off my 2 cap 1 in full each month and the CL on that is 1k. I eventually would like to apply for the CSP as well as AMEX spg & Barclays for travel benefits.. And am looking for an everyday card. I have one bill in collections which I'm working on a PFD.

How can I increase my score by 100 pts by the end of the year? If possible? My goal is to increase it 30-50 pts by end of summer. And another by end of the year.

Cards one would recommend for everyday spending with flexible rewards/points?

Are there any you would pair together to max points/miles ie: chase sapphire + freedom unlimited?

And any other tips and tricks that would be helpful.


Thanks in advance!


User avatar
Vattené
Centurion Member
Centurion Member
 
Posts: 1157
Joined: Sun Jan 26, 2014 3:55 am
Location: US

Re: Thin Credit File/Need Help on Increase

Postby Vattené » Tue Jun 14, 2016 2:25 pm

Welcome to the forum!

If it's at all possible to get the PFD that should be your biggest credit priority. It will do wonders to improve your score. If you can't get if off, and that's a real possibility based on the luck of the draw of what collector this is, even if you pay the account in full it will be a derog that shows up in your credit profile for years and drags your score down. If you can get it removed from your profile, you'll still have a thin profile but it will be clean and lenders are more willing to work with that.

With a score under 600 the travel cards you list are not too realistic at this point (and you say "eventually" so it sounds like you probably realize this), but if you can get the PFD I bet you'll be able to get them sooner than you think. If you think you can make good use out of the CSP, then applying for a Chase Freedom now may be a good strategy. It's easier to get approved for (CSP is a Visa Signature only card, meaning the minimum starting CL they will give is $5,000 and that's probably not going to happen at this point). You could start earning rewards now that can be used with the CSP you'll get down the road when your credit is in better shape. I think a Freedom is a possibility right now, but approval may still be iffy. There is a Credit Pulls Database you can Google to help give you a better picture of your odds with any lender you have in mind.

If you can make good use out of a travel card now, then an Amex charge card would be easier to get approved for than SPG (they have annual fees and must be paid in full each month so are the easiest cards to get from Amex). Green, Gold, PRG, and Platinum all have the same underwriting criteria, so - if this appeals to you - it is just a matter of picking the product with the benefits you're willing to pay for in the form of an AF. I couldn't tell you how likely you are to get approved at this point, but if you want a travel card right away I think they will probably be your best bet.

Also, if the Barclay's Arrival Plus is where you'd eventually like to get, you may consider applying for the Barclaycard Rewards MasterCard now. I don't put too much stock in the notion that you need to "get in" with lenders and "build relationships" with them, but it is a solid rewards card for not requiring great credit, and for getting an account established now it could be another good option.

Whatever happens with the account in collections, I think it would be a good idea to get some more accounts under your belt. It will help thicken your profile and let you build a strong history of 100% on-time payments more quickly. If the PFD works I think it's possible to increase 100 points by the end of the year.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
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

takeshi
Centurion Member
Centurion Member
 
Posts: 1733
Joined: Wed Jun 05, 2013 3:12 pm
Location: US

Re: Thin Credit File/Need Help on Increase

Postby takeshi » Tue Jun 14, 2016 2:29 pm

EatDressWell wrote:And am looking for an everyday card. I have one bill in collections which I'm working on a PFD.

How can I increase my score by 100 pts by the end of the year? If possible?

Big improvements come from addressing issues with a big impact. That would be the collection in your case. If your revolving utilization is in check then the rest of it is mostly going to be responsibly managing your accounts, building your AAoA and gradually adding accounts as your profile allows to thicken it.

EatDressWell wrote:Are there any you would pair together to max points/miles ie: chase sapphire + freedom unlimited?

It's not just a matter of the cards themselves. You need to determine where the majority of your spend is going and maximize rewards on where the bulk of your spend is going.

For programs like UR, SPG, etc you need to carefully consider the redemptions processes for the programs, which ones you can use and how that impact rewards value for you. Run the numbers for your spend and do your analysis. Do you really have enough spend to spread among multiple programs?

EatDressWell wrote:And am looking for an everyday card.

If you can properly leverage UR and/or SPG you probably don't need one. If not, then you probably shouldn't be considering UR and/or SPG cards.

EatDressWell wrote:With that being said, my fico is just under 600

You don't have just one FICO. There are many FICO models used by creditors. For most models you have a score with each of the 3 major CRA's. Make sure you're considering both the specific scoring model & the CRA when referencing any score. Also consider the relevance of the model/CRA combo to a given creditor/product. Make sure you're paying attention to your reports with all 3 of the major CRA's.

EatDressWell
Green Member
Green Member
 
Posts: 4
Joined: Tue Jun 14, 2016 12:37 pm

Re: Thin Credit File/Need Help on Increase

Postby EatDressWell » Tue Jun 14, 2016 3:04 pm

Thank you guys for responding and the information provided!!


EatDressWell wrote:And am looking for an everyday card.

If you can properly leverage UR and/or SPG you probably don't need one. If not, then you probably shouldn't be considering UR and/or SPG cards.


I was thinking the same thing. As far as not having an everyday card and just utilizing UR/SPG. Once I raise my scores of course. I'm not looking to apply anytime soon. I'm just picking other peoples brains as well as doing a little homework.

As far as thickening my credit profile, what do you think about store cards. Any cards a bit on the easier side to get to help with my process? Or any other tips and techniques you all suggest. I pay off my bal off each month & I don't have problems with paying balances off in full. My utilization isn't crazy nor are my CL's high.

I am addressing the collection, planning on a PFD looking up the company and doing a little bit of research on them & they have done PFDs.

Fingers crossed. Just trying to get on the right foot and continue to build and maintain an excellent score.


Thanks again to those who are responding!

EatDressWell
Green Member
Green Member
 
Posts: 4
Joined: Tue Jun 14, 2016 12:37 pm

Re: Thin Credit File/Need Help on Increase

Postby EatDressWell » Tue Jun 14, 2016 3:35 pm

[quote="Vattené"]Welcome to the forum!

If it's at all possible to get the PFD that should be your biggest credit priority. It will do wonders to improve your score. If you can't get if off, and that's a real possibility based on the luck of the draw of what collector this is, even if you pay the account in full it will be a derog that shows up in your credit profile for years and drags your score down. If you can get it removed from your profile, you'll still have a thin profile but it will be clean and lenders are more willing to work with that.


--Thank you so much for the reply and information. I read up on the company and they have done PFDs. I am going to try my hand at that. And if it works and raises my score a 100 pts that would be amazing! Yes, eventually. I know that building takes time but with on time payments and paid in full, low utilization rates, I'm sure it'll go up before I even know it. I'm just under 600 all across the board.

User avatar
Vattené
Centurion Member
Centurion Member
 
Posts: 1157
Joined: Sun Jan 26, 2014 3:55 am
Location: US

Re: Thin Credit File/Need Help on Increase

Postby Vattené » Tue Jun 14, 2016 4:49 pm

I'm a big proponent of store cards. They are how I got my credit established and helped me build a solid credit profile in a relatively short amount of time. Secured cards are another option if a rewards card is not in your grasp yet. Each path has pros and cons, so a lot of it comes down to personal preference. Secured cards can be used anywhere and have the potential to graduate into unsecured products. Personally, I like store accounts because they can't be used anywhere (less potential for fraud). They're easy to qualify for and don't require you to tie up any money in them. As far as scoring purposes, a credit line is a credit line, and one isn't going to improve your score more than the other.
*edited to add one small caveat: a secured card may be easier to build a lengthier payment history. You don't have to use an account a lot to build good credit, but more on-time payments help. A secured card can easily be used every month. If you got a store card at somewhere like Bloomingdale's and used it infrequently it could make a difference, though I suspect it would be very marginal.*

If you can't get the account in collections removed from your profile I'd certainly recommend the store account path. Just be sure to always pay them in full (they're notorious for terrible terms like high APRs and fees, but if you PIF they are a great tool for building). If the PFD works, though, they might not even be necessary.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
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

TXviking
Centurion Member
Centurion Member
 
Posts: 264
Joined: Fri Apr 15, 2016 5:46 pm
Location: Palm Beach, Florida

Re: Thin Credit File/Need Help on Increase

Postby TXviking » Tue Jun 14, 2016 11:21 pm

Vattené wrote:I'm a big proponent of store cards. They are how I got my credit established and helped me build a solid credit profile in a relatively short amount of time. Secured cards are another option if a rewards card is not in your grasp yet. Each path has pros and cons, so a lot of it comes down to personal preference. Secured cards can be used anywhere and have the potential to graduate into unsecured products. Personally, I like store accounts because they can't be used anywhere (less potential for fraud). They're easy to qualify for and don't require you to tie up any money in them. As far as scoring purposes, a credit line is a credit line, and one isn't going to improve your score more than the other.
*edited to add one small caveat: a secured card may be easier to build a lengthier payment history. You don't have to use an account a lot to build good credit, but more on-time payments help. A secured card can easily be used every month. If you got a store card at somewhere like Bloomingdale's and used it infrequently it could make a difference, though I suspect it would be very marginal.*


When I first came to the United States, I apped and got approved for a Target store card with a $300 credit line. That is in essence what got my credit started; all the benefits of store cards AND Target sells basically everything, so I wound up shopping there at least once a month.

I very much second Vattené's recommendation of store cards, with a particular nod to Target.

Kevin86475391
Centurion Member
Centurion Member
 
Posts: 237
Joined: Wed Feb 18, 2015 9:04 pm
Location: Texas

Re: Thin Credit File/Need Help on Increase

Postby Kevin86475391 » Wed Jun 15, 2016 11:06 pm

TXviking wrote:
Vattené wrote:I'm a big proponent of store cards. They are how I got my credit established and helped me build a solid credit profile in a relatively short amount of time. Secured cards are another option if a rewards card is not in your grasp yet. Each path has pros and cons, so a lot of it comes down to personal preference. Secured cards can be used anywhere and have the potential to graduate into unsecured products. Personally, I like store accounts because they can't be used anywhere (less potential for fraud). They're easy to qualify for and don't require you to tie up any money in them. As far as scoring purposes, a credit line is a credit line, and one isn't going to improve your score more than the other.
*edited to add one small caveat: a secured card may be easier to build a lengthier payment history. You don't have to use an account a lot to build good credit, but more on-time payments help. A secured card can easily be used every month. If you got a store card at somewhere like Bloomingdale's and used it infrequently it could make a difference, though I suspect it would be very marginal.*


When I first came to the United States, I apped and got approved for a Target store card with a $300 credit line. That is in essence what got my credit started; all the benefits of store cards AND Target sells basically everything, so I wound up shopping there at least once a month.

I very much second Vattené's recommendation of store cards, with a particular nod to Target.


I also personally agree. I think store cards are a better option than secured cards, and the Target Red Card is a particularly appealing one IMO. It's the only store card I still keep, and even with plenty of great reward cards it still sees active use in my wallet.



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 2 guests