Help with AAA and what to get next

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s.jessica
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Help with AAA and what to get next

Postby s.jessica » Sun Feb 17, 2013 11:58 am

Could someone explain in simple terms how AAA is used? Does that mean if I have 1 card for 1 year and then get the second card a potential lender would only see me as having credit for 6 months? What about then if I have 2 cards? When would be the best time to add another for maximum AAA?

My problem, my cards are low limit, so when I went on vacation I ended up maxing out both cards and they reported before I could get them paid. When I tried to get approved for a car loan at the bank when I got back, the loan officer said this looked really bad and I should wait because my credit scores took a serious hit. He suggested I take out 1 or 2 more cards which should give me higher limits and let them report a few months before trying again. He said he ideally likes to see a history of 3 to 5 well managed cards for 2 years. It seems like at this rate, adding a card every year it would take 8 years to get 5 cards with an AAA of 2 years.

I chose credit cards as my first step in building a credit history because I could charge a small amount like a pizza and have a month interest free to pay for it. I also have the option of charging nothing in a month if I don't feel I can pay the bill. Seemed like a better deal than taking a high interest loan and making a payment each month and I figured I could always take out a personal loan at a lower interest rate after using my cards.

What would you go after? I know Capital One would likely give me a Cash Rewards card maybe with a $1,500 limit if I'm lucky and that would really be enough as I don't spend that much normally on my cards, but at the same time I'd like to dump my starter cards with their low limits and high annual fees. I'm really not into airmiles and I don't fully understand the points game, but I can somewhat understand cash back. Credit is such a funny animal, we are going to give you this 10K card but we would like to see you only use 1 to 2K of it each month. I don't plan to charge that much, just like to fill my tank a couple times without over utilizing. I guess the other thing, is it seen more favorable to have cards from different issuers vs. having 2 cards from the same issuer? An example if I had a Cap1 Cash Rewards and a Venture Miles, would that be viewed as one trade line or 2?


cashback
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Postby cashback » Sun Feb 17, 2013 12:39 pm

It works like any average does. Total age of accounts/number of accounts. So if you have 3 cards and the total age of them is 6 years, your average age of accounts is 2 years.

If you get another CC, I'd stick with something easy to get with no AF. Rewards are nice, but building your credit is more important.
Credit Cards
Amex BCE 25K ---- PenFed Platinum Rewards 15.5K --- US Bank Cash+ 12K --- Discover IT 6K --- Citi Dividend 5K --- Chase Freedom 12.5K --- Amex SPG 6K --- Citi Thank You Preferred 15K

Not Used
Citi Simplicity - 5K, Sam's Club Discover - 10K

Future Cards
Sallie Mae World Mastercard

FICOs
Exp 772 - TU 781 - Equ 781

MemberSince99
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Postby MemberSince99 » Sun Feb 17, 2013 3:38 pm

Each Cap One card would be considered one account (tradeline). I believe you are allowed a maximum of two accounts with them at one time.

So this is possible if it's what you want. For best score, you should have 2 or 3 cards, from what I understand (minimum). That is if you care about getting every possible point. You can still have really good credit with none at all - I did that not so long ago. But it's best to have them if you want the best score which it sounds like you do.

I wouldn't worry too much about AAoA. Get the cards you want, grow them into better cards and move on up. Keep the no annual fee cards just for for AAoA as you grow.

s.jessica
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Postby s.jessica » Sun Feb 17, 2013 3:47 pm

What cards would be easiest to get? Should I go for another Cap1 card? We figure the Cash Rewards would be break even for me, $30 annual fee and if I'm lucky, the cash back would cover the annual fee. The plus is that it would likely give me a higher credit limit than I have now. What else should I be looking at? What is the best way to get a higher limit card?

MemberSince99
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Postby MemberSince99 » Sun Feb 17, 2013 4:00 pm

I really can't recommend Cap One IF you have other options. Why not? First they pull all 3 bureaus. For that, you will get a card that will probably give you one CLI in many, many years (if lucky) and not grow with you, with an annual fee at that. That assumes you get it in the first place of course.

BofA offers a secured visa that will unsecure and can grow with you over time (at the cost of hard pulls from what I've read). I don't know your credit profile only that your limits are low now.

By the way from what your lender said he likes ideally to see 2 years he did not say anything about AAoA. That means in two years you would have his ideal profile if you use your cards wisely in that time with say 3 of them even if your AAoA is lower, which it could be. That's his ideal of course. You may not need to do that.

Since your cards are low limit I wouldn't say Discover, as they will see that and give you another low limit card if approved. Ditto with Chase - they like to see big limit cards before they will give you one, as a rule. Citi has been known to give higher limits, but they are quirky as hell and a single inquiry in the last 6 months on an otherwise near perfect report, has been said to cause a denial. (I read that on the MyFICO forums, as a member vented frustration over that). They've denied me every single time I ever applied with them. Seems they either like you or they don't and there is only one way to find out where you stand with them.

I can tell you that I was in low limit land myself, late 2011, I closed my Cap One 500 limit card that will go to 750 then never go up ever again in August of that year. I called them and pleaded for a limit I could actually use. No dice - they do not do CLIs on those starter cards, not now, not ever, period. Once you are done with their single "steps" increase, forget it. So I closed it. In December I was frustrated that my credit score just would not go up without cards, so I applied for their Rewards card and boom got a 3000 limit on instant approval. They don't tell you that you might qualify for that, it's up to you to bite the bullet and see. My bank had been for months sending me invitations to apply for their card at LEAST once a month for many months so I bit on that and applied online - boom instant 9000 limit approved. So you just never know and you eventually have to take your shot, see what happens and go from there.

s.jessica
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Postby s.jessica » Sun Feb 17, 2013 5:10 pm

Is it possible to get something with a decent credit limit, NO AF and NO rewards? I didn't think there was such a card. One plus, if I get airmiles, I wouldn't use the card much because I wouldn't care about racking up points. Most likely I'd just blow the points off and never bother to use them.

I didn't really want to go Cap1 again, but I just figured that's what would most likely approve me since I now have a history with them. I know someone said I should go to Wells Fargo and lay down $2,000 for a secured card to bump up my CL, but since I already have a couple cards, not sure if it would work. Likely they would say my score is too high???

MemberSince99
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Postby MemberSince99 » Sun Feb 17, 2013 10:08 pm

Sure is. Most issuers offer "Platinum" non-rewards type cards. If you check my signature, that was the one that started me off at a 9k limit, and they've since raised it, because they would obviously prefer I use that over my signature card which offers rewards (more profitable for them).

So there are quite a few cards I've seen out there that have no AF and no rewards and offer a decent limit, depending on your credit of course.

If your score was "too high" for a secured card, that implies they'd instead maybe be willing to give you an unsecured card. I don't honestly think though that any lender will decline you for a card because your score is too high. You could have an 800 score and First Premeire would give you a card I have little doubt. So, I wouldn't worry about that.

From what I've seen, Cap One doesn't take your history with them into account any more than your overall history with all lenders. In other words just having a card with them doesn't mean they are more likely to give you another one. That's just what I've experienced in dealing with them (and I'm thankful those days are behind me). So I wouldn't feel like you would be best off to stick with them and that you will get better odds or something.
One part I left out of that story was, when I had 3 Amex cards, Discover, a Visa Signature and other "prime" cards, I re-applied for the Cap One Rewards "No Hassle" card, because I wanted a Master card, and guess what? They declined me, with a score in the 780s. This is with perfect history with them, and a great score as mentioned. So getting Cap One's non starter/rebuilder cards is not as easy as many would assume, and they do not seem to give any greater weight to history with them than with everyone, at least GOOD history, I can't say about bad since I haven't had that with them.

I would suggest looking elsewhere for what you are wanting than Cap One. You already have them and they aren't exactly growing as you'd like. If worse comes to worse, go the secured card route, but I'd suggest, not knowing your profile, but if you feel you have a decent shot, trying for cards that are not secured as lenders seem to have been a lot more generous lately. Don't go nuts on it, but don't be afraid to test the waters either. You'll never know for sure unless you try. Ideally you should know your scores and read up on what various lenders like to see before deciding. I don't know that so it's hard to really make too many suggestions.



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