Advice/tips for 25 year old who is rebuilding their credit?

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Lorello
 
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Location: Philadelphia, PA

Advice/tips for 25 year old who is rebuilding their credit?

Postby Lorello » Thu Oct 17, 2013 2:10 am

Hey Everyone, I'm a 25yr old man. New to this whole credit thing. Lets start off by saying I grew up in a poor household is South Philadelphia and had a lot of family issues and no type of financial guidance.

I thought I had ruined my credit by not paying back a $1,000 in purchases made with "Bill Me Later". I was really mixed up in life and my head wasn't straight. I dealt with some legal troubles and incarceration and some other issues. I finally got my life together and my head straight on shoulders and did some "growing up" and found myself.

I did a lot of thinking, realizing, praying, etc... and everything is looking up for me now with all my troubles in my past for the most part. I then, one day said to myself, "It's time to fix my credit and send these MF's a $1,000 plus all the fees and blah blah blah".

So i called Bill Me Later to get the number for the collection agency. I then called the collection agency and when they ran my social it came up squeaky clean. Must have been that "praying" I did. I then decided to apply for a secured Capital One card. I sent them $50 and they gave me a $200 limit. The secured Platinum Mastercard i applied for just so happened to come with a free subscription to Credit Inform services.

When i got my credit report it stayed my Experian score was 737. :) WOWWWWW, was i ecstatic. I then was approved for an Amex Gold Premier Card, an Amex Blue Cash Everyday card with a $2,000 limit, and a Capital One Platinum Prestige card with a $10,000 limit.

I have only used the $200 secured limit so far and I will use all my cards wisley because there is no shot I will take advantage of my blessing and mess my credit up. I have did a lot of reading and learned a lot from this forum so i decided to join, Hello Everyone.

Anyone have any tips on the Amex CLI 3x technique, so I'm ready when the time comes. Also an idea that occurred to me is would it effect my Credit in a positive manner if i was to consistently take cash advances from my Amex Gold card and simply hold the money to the side "In my bank account" for a period of time then send it right back to them?

Also, any advice of Capital One CLI's and how to go about them... Any advice you guys can offer to me would also be truely appreciated. I want to continue to build my credit up in to the 800+ range so when it's time to a mortgage or simply a new car loan I'll be in excellent standing. What is the best score for me to go off of in regards to loans versus credit cards.

Is the FICO the big thing i should monitor or what reporting agency tends to be the prominent one if any?

THANKS in advance everyone! Have a good one! :)


MemberSince99
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Postby MemberSince99 » Mon Oct 28, 2013 11:11 am

First of all the praying had nothing to do with that collection not being on your report, just so you know. That stuff drops off after so many years (7) unless of course the collection agency illegally re-ages it but that's another can of worms, anyway praying didn't make it go away, the system did. But if it makes you feel better, I guess you can give credit to the Almighty.

As for your Amex CLI, just keep your utilization low and everything paid in full. Keep this because they base it off the last time they softed you and you don't know when that may happen, people have made the mistake of paying down balances right before they go for it, and then get declined because Amex is going off the last time they looked when things were different. Typically they look at least once a month but you just never know for sure so keep it in line. If worse comes to worse buy a report and check for the last time they softed you and consider what things were then.

I would not take cash advances because you will pay interest on that right away and you are throwing money away, and it may be looked at negatively as well by the lender and Amex can be quirky. Just use the cards for what you'd normally buy and pay them off, you don't have to (nor should you) do anything fancy or crazy with the cards. That's how people get into trouble is overthinking, or getting greedy and using vanilla reloads to manufacture spending. Just use them that's what they are for. Pay them back. Everyone is happy.

Capital One and CLI are not terms that naturally go together very well. You have one of their prime cards so you should be able to get some over time without going to the executive office, but I honestly don't know how they do that. I would say after 6 months to a year you can ask for one. You will find their customer "service" if you can call it that to be pretty lame.

In terms of 800 it's just a number you get the best mortgage terms at 760+ and autos lower than that. Great to set goals though and reach them, just know you don't HAVE to have that.

Honestly your FICO is the only score that matters, FAKOs are not used by lenders and can be very different from FICOs.

In terms of agency, it's all over the board as to who uses what. Amex uses EX, Cap one pulls all three. Other lenders have their preferred agencies but may pull others depending on your state and so on. So none is truly "prominent". Plus there are other things like ChexSystems out there (Amex also checks this). They are all important.

Good luck and good work so far!

takeshi
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Postby takeshi » Mon Oct 28, 2013 3:25 pm

I wouldn't recommend cash advances for the reasons posted above. Charge only what you have ability to pay off and pay in full with each statement. Keep your utilization low and you'll be in good shape.

Lorello wrote:Any advice you guys can offer to me would also be truely appreciated. I want to continue to build my credit up in to the 800+ range so when it's time to a mortgage or simply a new car loan I'll be in excellent standing. What is the best score for me to go off of in regards to loans versus credit cards.

Is the FICO the big thing i should monitor or what reporting agency tends to be the prominent one if any?

FICO is the only score that really matters but FAKO's can be useful for monitoring trends with your credit. Don't fixate too much on the 800+ scoring. IIRC anything over 750 provides little benefit and people in the 800's already have a mix of credit including mortgages, auto loans, etc.

There isn't just one agency that matters. They all matter.

Lorello wrote:Anyone have any tips on the Amex CLI 3x technique

myFICO doesn't have its fans around here but their 3x CLI thread is a resource I'd recommend reading.



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