Best Credit Cards To Build Credit?

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Best Credit Cards To Build Credit?

Postby Spunkie » Wed Sep 07, 2011 10:32 pm

Anyone have any good tips on getting better credit cards or just general tips to build credit based on my circumstances?

First some background info:
1. I'm a full time web developer making around 26,000$, more if you count overtime, but I generally don't put it on applications since its so sporadic month to month. I live fairly cheap with ALL my expenses topping out at most 400$ a month, not counting food.

2. I have 1 local credit union credit card with a 500$ limit and 9.99% fixed rate. Generally its sat between 30-150$, it did hit 500$ around 500$ for a month because of a emergency about 5 months ago. Now that I've been researching credit in the last week or so I've learned it would be better to completely pay it off each month rather than having it sit there and have done that. I've had it for 29 months with no late payments.

3. I also have 1 small auto loan(<4000$) with a co-signer for little over a year. Been making payments that are much higher than min for the 60 month term, and if needed I could pay it off completely in 2 months time but I figured it would be better to have it sit there than pay off a 60month loan completely in 2 years and end up with only a single active credit line on my report. Never had a late payment.

4. My scores as of a week ago are, Equifax/678, TransUnion/989, Experian/701.
FICO I found out today from amex rejection is 720.

What I've applied for in the last week:
A credit increase on my existing CC, I was told they dont even offer that card anymore but what they could offer was their new credit card with a 1000$ limit, 7.9-13.9% var (they offered me 11.50%), but to do it I would have close my current CC with them and roll any balance left into my new one. I declined the offer thinking having my credit line with 2.5 years of good payments closed just so I could have a 500$ limit increase would hurt me far more than it would help.

Next I applied for a Citi Platinum Select MasterCard and got this message at the end of the application, "You application requires more time to process we will contact you in the next 30 days with a decision." Which I've been told by many people that 99% of the time that means I've been denied.

I then applied for a Capitol One Cash Rewards Mastercard, I've been approved for this but only with a 500$ limit and with the highest APR on the card 22.9%.

I also applied for an Amex Blue card tonight, a longshot I know but was hoping to get something with a higher limit. I was denied for these reasons it said
Number of trades (Experian)
Too few credit card accounts on which, in our estimation, you have paid a majority of the balance in recent months. (Experian)
Too many recent credit checks. (Experian)

My problem:
I know I'm young and not exactly rolling in the money plus I could just be over estimating what I should be able to get in credit currently, but I have very cheap monthly expenses and what little credit I do have I've never made a late payment on. Along with the fact all my scores fall within the average/fair range it seems like I should be able get more than 500$ limit credit cards with a high APR. I feel like in 6-12months or so I'll just be in the same spot since small limit cards like mine don't help very much with building credit and aren't very piratical if your supposed to stay under 20% usage.

Anyways thanks for putting up with my rambling and for for any help in advance. :oooo

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Postby ooxs » Thu Sep 08, 2011 4:52 pm

Welcome to the forum :)

1. Banks usually ask for your Annual income, this is the total of what you made that year including overtime.

2. You can close that credit card and it will still reflect on your credit report for the next 10 years. However i don't recommend this option simply because you have limited options right now. While the new card gives you a higher limit, it is not significant enough for you to jump ship. Additionally while paying down your outstanding balancing is highly recommended, it is not a good practice to zero out or pay off your balance every month. For reporting purposes you should maintain a low balance and avoid using your maximum available limit or going over your limit.

3. Auto loan are perfect for someone in your position, diversifying your credit is the best way to achieve the best result.

4. Your scores are fine, just like good cheese or wine, you cannot speed up the process, it just get better with age. The good news is you are off to a really good start and hope you can keep it up.

5. You need to stop applying and try to lower your expectation. I believe you have good intentions and trying hard to prove that you are a responsible adult but unfortunately in the eyes of the banks, you are a high risk because of your impatience to obtain credit.

You can get a card to build credit from Household bank fairly easily Household Bank Credit Card Review: The Pros and Cons but American express, chase will just continue to deny you which in turn lower your fico score and flag you a credit risk. You stand a 10% chance that Citi will give you a card so keep your fingers crossed and hopefully you will get one.

Bottom line a higher credit is not what is going to help you in the future, your payment history is 35% of your credit history and that is what you need to be concentrating on to build credit.

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Postby naomibatac » Fri Sep 09, 2011 5:46 am

I agree with ooxs, refrain from applying for major credit for a while and build your credit by making more credit card purchases and paying on time. However, don't use up your limit as it will also give negative impression. Try store credit cards to build credit for your personal purchases; they can also work.
[size=60]I don't have any relationship to the credit cards or companies discussed here. I am solely a regular member of this forum with no direct financial rewards from this site. My opinions are solely mine.[/size]

A mom of 3 and currently living life, and working for credit card helpline, a company dedicated to helping people get out of credit card debt.

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