Welcome! I am just a year older myself. I collected a few cards while in college to start building up a credit history, which got my credit score in the mid-700s by the time I graduated. It's nothing groundbreaking, but that will get you pretty much any card you want, and it even got me the lowest rate when I recently got my first car loan.
Do you see any major credit needs in your near future? If you aren't planning on taking out a mortgage within a couple of years, then you have much more freedom to build your credit profile. If this is the case, you can pretty much go for any account you want to (within reason) and start letting them age. Any inquiries you take in applying for credit will fall off your file after two years.
capekid wrote:I am going to be 23 in 3 months. I graduate from college with my BS next week. I do not have any student loans but I do have a $11,000 loan for a car which began December 2014. I have the money to pay off the loan because I purchased a car after having an accident and receiving $15,000 from the person who hit me's insurance. I figured I might as a well start a loan or the first time. I won't go further into that, you get the idea.
You have plenty of money to pay for it, so I recommend you consider paying off the loan in full. It's possible
this isn't in your best interest - your money could be earning more in savings/investments, for example, or you could have a 0% APR on the loan - but that is an evaluation you will have to make yourself based on your priorities. Personally, I would want to get rid of the loan just to save myself from paying all the interest.
Credit card accounts will establish a credit history just fine. Technically, different types of debt are better for your FICO score than nothing but credit cards, but priorities come up again. I think saving those real dollars in interest is worth more than a FICO boost just
from having a different type of loan on your history (I couldn't even tell you how much of a boost it would give you).
capekid wrote:When I was 18 I opened a Chase College savings account with my mother. I have a basic Chase Sapphire with this account and I have over $25,000 in savings. My income is between $50,000 and $65,000 a year (based on a performance bonus system).
The only card I have in my name and is on my own is the Amex Green card. I pay the full amount the day I get the bill, and usually pay into the next month.
I assume you mean the non-annual-fee credit card version of the Chase Sapphire Preferred (CSP)? If so, do you mean you are an authorized user on this account, with your mother as the primary? Perhaps you could PC this into the CSP down the road if it still interests you.
You say the Green card is the only account in your name, so the best thing you can do for your credit profile is get at least one more credit card account - so you are on the right track. For credit purposes, which card you go for doesn't really matter. Any way you go, you will establish a trade line and start building a history. The question just becomes finding a card that is best suited for you AND one for which you have good odds of approval.
capekid wrote:I know I can take advantage of my college account for a few more years but I would like to get started on my credit history ASAP. I made the mistake of applying for a Sapphire Preferred in November and was rejected within 5 days. I had an 805 score on my report.
Do you know if this was a FICO score? I am skeptical that a score of 805 for someone with such a thin history is a true FICO; I suspect it is a different model, in which case the number is basically meaningless.
capekid wrote:My plan was to do the following. Switch to one of the regular savings accounts and breakaway from my parents. Apply for a Chase Freedom and hopefully talk my way into the Sapphire Preferred.
The Freedom is a good option and your odds of approval would be much higher. Hopefully your relationship with Chase will help you get approved. Even if you just get something like $500, it can grow and more options will open up as your credit warrants them.
capekid wrote:Because I am an only child, it was recommended by a few different people to stay on my parents' banking account or at least have one with them in the future.
I have never hear this before. I am also an only child. Why do people recommend this?
Anyway, as I say you are on the right track. Establishing a history early on will pay off down the road. Have you ever gotten your free reports from annualcreditreport.com? Knowing what is on them is important. I would like to second the recommendation to consider Discover. They were my first prime card, but I did have a few years of history before applying. You should also just see if Amex offers any revolvers that look appealing to you (if they do, the fact that you're already a card member may improve your odds with them). Good luck!