What method should I take to building my credit?

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kmaven
 
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What method should I take to building my credit?

Postby kmaven » Wed Dec 12, 2012 2:39 pm

Hi all,

I'm trying to find out the best ways to build up your credit & credit score. This year I have taken steps to pay off all accounts and read through my 3 credit reports. Currently I have all my accounts paid off and am only paying on students loans.

I did read that it was good to get a secured credit card, and only charge up to 10% of the credit limit and then pay that on time over the course of 12 to 18 months so that it reflects good on your credit report.

My question is: Is this method a good start? What is some solid advice or reference to start to build up your credit and improve your credit score? Also are there services that I can use to manage my credit score (as in watch it grow, etc)?

Thanks


kcarter609
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Postby kcarter609 » Wed Dec 12, 2012 10:51 pm

http://www.creditkarma.com to keep an eye on what's on your score, although it's not a true FICO.

Secured cards need to be PAID IN FULL and ON TIME every month. They are definitely good to help rebuild credit. After that, you can move to Capital One unsecured and go from there.

Active Cards:
Chase Freedom 10+10 Visa Signature ($9k Limit - 8/2012)
Chase Sapphire Preferred ($10k Limit - 2/2013)
Chase Ink Plus ($7k Limit - 2/2013)
Discover IT ($9.5k Limit - 10/2012)
AMEX Zync (No Pre-set Limit - 1/2010)
AMEX Blue Cash Everyday ($20k Limit - 1/2013 - Backdate to 1/2010)

MemberSince99
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Postby MemberSince99 » Thu Dec 13, 2012 4:30 pm

I would bypass Cap One if you have a secured card and just wait until you can get a card that will grow with you and offer rewards and no annual fee. Cap One "fair credit" cards do not give any rewards, have an annual fee, and have about as much chacce of growing with you as you have of finding a gold ring in your bathtub (that you didn't place or lose there).

There is this misconception that paying everything off is good for your credit. It is good to be current on your payments, and that good history will report for 10 years, but you still need current credit for the optimal score of the installment sort.

What you said about credit cards yes that is correct.

Credit Karma and Credit Sesame are free and will let you monitor your credit, CK lets you pull TU every day and CS is EX once every 30 days I believe.

Daniel
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Postby Daniel » Thu Dec 13, 2012 7:31 pm

MemberSince99 wrote:I would bypass Cap One if you have a secured card and just wait until you can get a card that will grow with you and offer rewards and no annual fee. Cap One "fair credit" cards do not give any rewards, have an annual fee, and have about as much chacce of growing with you as you have of finding a gold ring in your bathtub (that you didn't place or lose there).

There is this misconception that paying everything off is good for your credit. It is good to be current on your payments, and that good history will report for 10 years, but you still need current credit for the optimal score of the installment sort.

What you said about credit cards yes that is correct.

Credit Karma and Credit Sesame are free and will let you monitor your credit, CK lets you pull TU every day and CS is EX once every 30 days I believe.


Just a correction, Cap One does offer a rewards card in their fair category, it is a 1% card with a bonus .5% at the end of the year. You are correct that there is an annual fee though. Are some of the major retail bank's like Wells, BoA, and USBank good options for no annual fee cards after someone has proven they manage their secured card well?

It is strange to me though, that in many forums, everyone agrees that the CapOne Fair cards are easy to get, but there seems to be some distance between those and the next tier of cards in terms of optimal credit score. It seems like people with self reported 650's and 660's who could get the CapOne cards easily, get declined for or low limits on things like a Freedom or a More card. Are there some cards with high approval rates (anecdotally) in this in-between range?

hematino
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Postby hematino » Fri Dec 14, 2012 12:27 am

Daniel wrote:Just a correction, Cap One does offer a rewards card in their fair category, it is a 1% card with a bonus .5% at the end of the year. You are correct that there is an annual fee though. Are some of the major retail bank's like Wells, BoA, and USBank good options for no annual fee cards after someone has proven they manage their secured card well?

It is strange to me though, that in many forums, everyone agrees that the CapOne Fair cards are easy to get, but there seems to be some distance between those and the next tier of cards in terms of optimal credit score. It seems like people with self reported 650's and 660's who could get the CapOne cards easily, get declined for or low limits on things like a Freedom or a More card. Are there some cards with high approval rates (anecdotally) in this in-between range?


True, but for the fair version of this card, with the annual fee of $39, you'd have to spend $2600 @1.5% back just to break even! That's pathetic for a cash back card and completely not worth it. Considering the miniscule credit limits Capital One loves giving out on their "fair" cards, you'd be better off with a non-rewards card or better yet, going with another issuer.
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MemberSince99
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Postby MemberSince99 » Fri Dec 14, 2012 9:46 am

Are you guys talking about the "No Hassle" card? That one isn't for "fair" credit that's one of their prime cards and it gives you a straight 1% back plus .5% at the end of the year.

As far as I know none of the "fair" credit cards give you any rewards at all with Cap One. I've had 3 of them, and I never got any. I've also had the No Hassle card and that does give the rewards you describe but it's a lot harder to get and a different animal than the "fair' credit cards with a 39 dollar annual fee.

Daniel
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Postby Daniel » Fri Dec 14, 2012 11:31 am

hematino wrote:True, but for the fair version of this card, with the annual fee of $39, you'd have to spend $2600 @1.5% back just to break even! That's pathetic for a cash back card and completely not worth it. Considering the miniscule credit limits Capital One loves giving out on their "fair" cards, you'd be better off with a non-rewards card or better yet, going with another issuer.


I absolutely agree that it is not the greatest option, and I definitely agree the limits will be low.

MemberSince99 wrote:Are you guys talking about the "No Hassle" card? That one isn't for "fair" credit that's one of their prime cards and it gives you a straight 1% back plus .5% at the end of the year.

As far as I know none of the "fair" credit cards give you any rewards at all with Cap One. I've had 3 of them, and I never got any. I've also had the No Hassle card and that does give the rewards you describe but it's a lot harder to get and a different animal than the "fair' credit cards with a 39 dollar annual fee.


The No Hassle card, does that even get marketed anymore? CapOne seems to offer an Excellent Credit, no annual fee, Cash Back Card that comes with a $100 bonus, and then a Fair Credit, $39 annual fee Cash Back Card. There appear to be different interest rates on each card. There is also the Cash Back for Newcomers card with no annual fee.

http://www.capitalone.com/credit-cards/cash-rewards/average/?Log=1&EventType=Link&ComponentType=T&LOB=MTS%3A%3ALCTMMQC4S&PageName=Credit+Cards+Home&PortletLocation=4%3B4-12-col%3B2-2-1-1-1&ComponentName=Get+50+more+cash+back+average+cchp%3B13&ContentElement=5%3BCard+Details&TargetLob=MTS%3A%3ALCTMMQC4S&TargetPageName=No+Hassle+Cash+Card+Details

http://www.capitalone.com/credit-cards/cash-rewards/?Log=1&EventType=Link&ComponentType=T&LOB=MTS%3A%3ALCTMMQC4S&PageName=Credit+Cards+Browse&PortletLocation=4%3B4-12-col%3B2-1&ComponentName=browseTable&ContentElement=2%3BCash+Rewards&TargetLob=MTS%3A%3ALCTMMQC4S&TargetPageName=Cash+Card+Details

MemberSince99
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Postby MemberSince99 » Fri Dec 14, 2012 12:36 pm

Interesting looks like they changed things a bit. The first link is for "fair" credit and does offer rewards so you are correct, they did not used to. The second one is the same thing but is for "excellent" credit. The only difference I saw is excellent has no annual fee, where fair costs you 39 bucks a year.

And maybe they don't offer the No Hassle anymore, I haven't checked out Cap One recently all I know is what they used to have back in the dark days when I used them. I don't pay any real attention to what they do these days as they are off my radar completely. I still do enjoy mocking their horrendous CS though, that NEVER gets old. "Thank you for calling Capital One my fake American name is George may I please know your first and last name?" "Oh you say you have had the same 500 dollar credit limit for 10 years now and your credit score is over 800 and you have prime cards with limits over 10k and wonder if we can give you an increase? Certainly I'll be happy to assist you and pull all three bureaus with a hard only to inform you that I am sorry but this account is not eligible for a credit line increase at this time". Yeah, fun times.

Daniel
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Postby Daniel » Fri Dec 14, 2012 4:28 pm

MemberSince99 wrote:Interesting looks like they changed things a bit. The first link is for "fair" credit and does offer rewards so you are correct, they did not used to. The second one is the same thing but is for "excellent" credit. The only difference I saw is excellent has no annual fee, where fair costs you 39 bucks a year.

And maybe they don't offer the No Hassle anymore, I haven't checked out Cap One recently all I know is what they used to have back in the dark days when I used them. I don't pay any real attention to what they do these days as they are off my radar completely. I still do enjoy mocking their horrendous CS though, that NEVER gets old. "Thank you for calling Capital One my fake American name is George may I please know your first and last name?" "Oh you say you have had the same 500 dollar credit limit for 10 years now and your credit score is over 800 and you have prime cards with limits over 10k and wonder if we can give you an increase? Certainly I'll be happy to assist you and pull all three bureaus with a hard only to inform you that I am sorry but this account is not eligible for a credit line increase at this time". Yeah, fun times.


I really hope that everyone who plans on finding their final card reads your story. In addition to what you are saying, which I can tell almost the same story, everyone else on this forum seems to say the same thing about CapOne. They are great cards for crossing the threshold from secured to Freedom, More, BCE/P, Green, Cash+, insert great card that grows with you here. Just when you get there, cancelling the card may be your best option.



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