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FICO® Forums >
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Advice for young person (re)building credit?
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Advice for young person (re)building credit?
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Barrick
Contributor
Posts: 10
Registered: 05-06-2009
Message 1 of 10
Viewed 3,259 times
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Good afternoon everyone! First of all I would like to thank all of you for the helpful forum! I will be turning 25 soon, and have decided that I would like to make an effort at building a stronger credit history. I will try to give all of the important details that may be needed - but please feel free to ask for anything that I have missed. I was able to pull two of my free credit reports (TransUnion and Experian), but Equifax is requiring a paper form. I will start out by saying that I do not have much in the way of credit history, and have only one open account. I have a credit card with a maximum limit of $700 that is branded Bank Atlantic - I believe this is issued by Barclays. This card has been open for almost two years without a single late payment. I usually keep the balance close to zero although the last report was at $390. TransUnion did not have a single derog reporting, but Experian reported a paid charge-off of $197 which I believe was originally reported in 2003. (Latest reporting date was in 2004 when the payment was made.) I requested a credit increase on my card at the beginning of this year; however, after pulling my report they told me that I was not allowed to request a credit limit increase because of the program that I was in. Lastly, I would like to mention that I am a member of Navy Federal Credit Union. I have seen mention of it here on the board, however I have only savings and checking. My questions would be: 1) I am living overseas, and would love to have my CL increased (or to open another card) so that it would be possible to buy two international aircraft tickets in an emergency. What should I do? 2) I would like to increase my credit rating so that I will be in a better position to buy a home one day. What can I do? 3) Would you suggest anything else in my situation? Thanks! Credit Report Info: TU: BARCLAYS BANK DELAWARE Balance: $390
Date Updated: 04/2009
High Balance: $733
Credit Limit: $700
Past Due: $0
Terms: Minimum $5
Pay Status: Paid or Paying as Agreed
Account Type: Revolving Account
Responsibility: Individual Account
Date Opened: 06/2007
Loan Type: Credit Card Inquiries: BARCLAYS BANK DELAWARE
Requested On: Inquiry
Type: 06/03/2007 Individual EXPERIAN: Derog: WACHOVIA/SOUTHTRUST BANK
Status: Paid,Closed. $197 written off.
Date Opened: Type: 10/2002
Reported Since: 08/2004
Date of Status: Deposit
Terms: NA
Monthly Payment: $0
Responsibility: Signer
Last Reported: 08/2004
Account History: Charge Off as of Aug 2004 Accounts in good standing: AARON SALES & LEASE OWNE
Status: Paid,Closed/Never late.
Status Details: This account is scheduled to continue on record until Mar 2015.
Credit Limit/Original Amount: $627
High Balance: NA
Recent Balance: NA
Recent Payment: NA
Date Opened: 12/2004
Reported Since: 03/2005
Date of Status: 03/2005
Last Reported: 03/2005
Type: Installment Terms: 24 Months
Monthly Payment: $0
Responsibility: Individual BARCLAYS BANK DELAWARE
Status: Open/Never late.
Date Opened: 06/2007
Reported Since: 06/2007
Date of Status: 04/2009
Type: Revolving
Terms: NA
Monthly Payment: $5
Last Reported: 04/2009
Responsibility: Individual
Credit Limit/Original Amount: $700
High Balance: $733
Recent Balance: $390 as of 04/2009
Recent Payment: $150
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05-06-2009 10:45 AM
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Re: Advice for young person (re)building credit?
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 HappyDays
Moderator
Posts: 7461
Registered: 06-18-2007
Message 2 of 10
Viewed 3,251 times
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For better info on credit cards you should go to the credit card board. The people there will be a great help to you. Length of history and CCs count more toward scores then installment loans. Navy Federal Credit Union........have you checked with them to see if they offer a CC? Hauling may know (she is on the CC board)
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05-06-2009 11:06 AM
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Re: Advice for young person (re)building credit?
[ Edited ]
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Barrick
Contributor
Posts: 10
Registered: 05-06-2009
Message 3 of 10
Viewed 3,248 times
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I'm sorry if I posted this in the wrong place... The CC is one aspect of this, but I would like to know if there is anything else I should do in general to build a positive credit future? If you feel best, would you move my post to a more appropriate forum? As for NFCU.. They have a card, although I have not applied for it. Thanks! Message Edited by Barrick on 05-06-2009 11:28 AM
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05-06-2009 11:27 AM
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Re: Advice for young person (re)building credit?
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HappyDays
Moderator
Posts: 7461
Registered: 06-18-2007
Message 4 of 10
Viewed 3,236 times
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If you know of someone (usually a family member) that will add you as an AU to their CC (this CC must have a longer history then 4 years and have no derogs) This will give you a longer history which will bring your scores up. The longer the history the better BUT no lates or anything else. The CL doesn't matter but the UTIL should be under 9%. Their UTIL comes to you as well as history. The baddie that you have now is helping your length of history. (date opened 2002). If you are an AU on a CC that was opened in 1995 then your LOH will be 14 years. Age of accounts are very important.
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05-06-2009 11:57 AM
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Re: Advice for young person (re)building credit?
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Barrick
Contributor
Posts: 10
Registered: 05-06-2009
Message 5 of 10
Viewed 3,221 times
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Now that this has been moved, would any one here have advice for me as far as the credit card goes? I know that my family would probably give me AU access to a line of credit, but I wouldn't want it. My parents have mismanaged credit all of their lives, and I don't wan't to: A) follow in their footsteps or B) associate any of their CCs with my file. Thanks!
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05-06-2009 12:32 PM
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Re: Advice for young person (re)building credit?
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Lady_Scarlet
Super Contributor
Posts: 2382
Registered: 09-10-2007
Message 6 of 10
Viewed 3,186 times
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I am a BIG NFCU fan!!! They tend to treat members well with solid CLs. I won't say appy but if you need the CL then NFCU is probably your best bet for a useable CL I had a derog from 2003 (a paid tax lien) and they issued both a Visa and MC within 3 months of each other (I suffer from the 2 hard INQs though) at a CL of 14K each (the first was instant and the second went to committee but was approved in 1 day) - but I also had 690s on EQ at the time. Both of mine are Plat cards (no rewards). The rewards cards are automatically a higher APR so if carrying a balance is a posibility then go for rate over rewards.
Now a member of the UNOFFICIAL 700 Club - Plus scores of 734-734-747
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05-06-2009 04:15 PM
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Re: Advice for young person (re)building credit?
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Barrick
Contributor
Posts: 10
Registered: 05-06-2009
Message 7 of 10
Viewed 3,113 times
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Thanks for the info on the cards! Would any one give me advice on weather applying would help or harm my scores? Thanks!
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05-07-2009 12:16 PM
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Re: Advice for young person (re)building credit?
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haulingthescoreup
Moderator
Posts: 22676
Registered: 04-01-2007
Message 8 of 10
Viewed 3,086 times
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Barrick wrote:
Thanks for the info on the cards! Would any one give me advice on weather applying would help or harm my scores? Thanks!
This varies. In terms of the "new account" and "seeking credit" dings, if you have little or no open revolving credit (CC's), it should help your scores. If you already have maybe 3 or 4, there probably won't be much impact. If you have more than that, you'll probably see a drop.
Wherever you are, you should first calculate the impact on your AAoA (average age of accounts.) Take ALL the accounts showing on your reports, both open and closed, and figure how long they've been open, expressed in months. So if you have a closed auto loan opened in February 1998, it would be 11 years, 3 months old, or 135 months old. Do this for all the accounts on a report, add up the ages in months, and divide by the number of accounts to get your average age of accounts in months. Then figure that out in YY/MM.
The rule of thumb, learned the hard way by many of us here, is that you don't want to drop your AAoA under a whole number of years. So if your AAoA is 5y10m, and adding two accounts would drop it to 5y3m, your AAoA would still display as 5 years, and the only change would be that you have to wait longer to get to 6 years. But if your current AAoA is 5y4m, and new accounts would take you to 4y9m, your scores would probably be hurt.
I got killed on my scores when I picked up a bunch of new accounts, both from severely dropping my AAoA and from the new credit ding. I knew it was coming, but I felt that I needed to upgrade my credit profile, and so I waited it out, and now my scores are better than they were. But it took a solid year, and when it first hits, there's nothing quite like seeing a 75-point score drop. 
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Please be friendly, supportive and respectful --and leave your high horse at the door!
Neither a borrower nor a lender be. --Wm. Shakespeare
Credit is a wonderful servant, but a terrible master. Who's the boss --you or your credit?
9/9/2009: EQ 769 - TU 765 - EX ???
Done credit hunting; having fun with credit gardening.
FICO High Achievers - Credit Scoring 101 - myFICO PDF Booklet - Closing Credit Cards - Frequently Requested Threads - Helpful Threads
FTC website: Knee Deep in Debt - FICO Score Estimator
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05-07-2009 05:07 PM
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Re: Advice for young person (re)building credit?
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Barrick
Contributor
Posts: 10
Registered: 05-06-2009
Message 9 of 10
Viewed 3,034 times
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Thanks for all of the advice! Even though I will probably take a hit because of the AAoA - my util will be much lower. Also, because I have so few accounts reporting, I am going to take a big hit on the AAoA. Once I am more established, opening new accounts wouldn't hurt so badly. Because my #1 goal right now was to increase my credit limit, I decided to go ahead and app the NFCU platinum Visa. I was not approved instantly, so I guess I'll have to sit back and wait to see what happens. Assuming I am approved with a decent limit, I'll sit back for another year or two and consider my options. Thanks again to everyone for all of the help!
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05-08-2009 09:08 AM
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