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Building Credit

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Anonymous
Not applicable

Building Credit

Ok So, 

 

I am trying to help my niece build her credit... She is 21 years. So far she has 2 items on her report which are 1. Capital One Secured- $201 2. PENFED Thrifty CS- $500 and an Auto Loan for 26k. Her Ficos are EQ 628, TU 635 and EX 627. I tried to get her a PenFed card and it was a no go. She has 10 inq on her EQ and 7 on her TU. What could I do to guide her to have 700+ scores? Any Suggestions??

13 REPLIES 13
Anonymous
Not applicable

Re: Building Credit


@Anonymous wrote:

Ok So, 

 

I am trying to help my niece build her credit... She is 21 years. So far she has 2 items on her report which are 1. Capital One Secured- $201 2. PENFED Thrifty CS- $500 and an Auto Loan for 26k. Her Ficos are EQ 628, TU 635 and EX 627. I tried to get her a PenFed card and it was a no go. She has 10 inq on her EQ and 7 on her TU. What could I do to guide her to have 700+ scores? Any Suggestions??


What's the balance on the auto loan? What kind of utilization is she at? 

 

Those are first two things I'd think of. Another CC might help, depending on AAoA and her longer term goals. 3 seems to be the best for FICO scoring.

 

Where'd all thei INQs come from? The auto loan?

 

What's the reason for building her score? Obviously a 700+ is nice to have, but is she shooting to refinance her car, get a mortgage? The best course of action is going to vary, depending on her end game.

Message 2 of 14
daybreakgonesXe
Valued Contributor

Re: Building Credit

Honestly, I think everything she has going for her right now is fine. Her scores are low because: if that auto loan is recent, she has a high current loan amount to total loan amount ratio; if the CCs were just opened, she has a low AAoA; and due to all of the above, those inquiries are killing her.

 

Just to double-check, she does not have any "baddies" on her report, right? No collections or charge-offs or late payments?

 

The quickest way to 700s at this point is to take a step back, let her accounts age, let inquiries fall off, and make sure she reports <10% utilization on only one card while paying in full the STATEMENT balance every month. I'm not sure if that PENFED Thrifty thing reports like a CC or like a loan. If it reports like a CC, leave it alone. Don't put anything on it. Have her Cap One card post every month with about $18 or less. She can use the card as much as she wants, just before the STATEMENT date (usually a few days after the due date), the account should post with $18 of recent charges.

Message 3 of 14
Anonymous
Not applicable

Re: Building Credit


@daybreakgonesXe wrote:

Honestly, I think everything she has going for her right now is fine. Her scores are low because: if that auto loan is recent, she has a high current loan amount to total loan amount ratio; if the CCs were just opened, she has a low AAoA; and due to all of the above, those inquiries are killing her.

 

Just to double-check, she does not have any "baddies" on her report, right? No collections or charge-offs or late payments?

 

The quickest way to 700s at this point is to take a step back, let her accounts age, let inquiries fall off, and make sure she reports <10% utilization on only one card while paying in full the STATEMENT balance every month. I'm not sure if that PENFED Thrifty thing reports like a CC or like a loan. If it reports like a CC, leave it alone. Don't put anything on it. Have her Cap One card post every month with about $18 or less. She can use the card as much as she wants, just before the STATEMENT date (usually a few days after the due date), the account should post with $18 of recent charges.


I totally agree with this strategy.

Message 4 of 14
Anonymous
Not applicable

Re: Building Credit


@Anonymous wrote:

@daybreakgonesXe wrote:

Honestly, I think everything she has going for her right now is fine. Her scores are low because: if that auto loan is recent, she has a high current loan amount to total loan amount ratio; if the CCs were just opened, she has a low AAoA; and due to all of the above, those inquiries are killing her.

 

Just to double-check, she does not have any "baddies" on her report, right? No collections or charge-offs or late payments?

 

The quickest way to 700s at this point is to take a step back, let her accounts age, let inquiries fall off, and make sure she reports <10% utilization on only one card while paying in full the STATEMENT balance every month. I'm not sure if that PENFED Thrifty thing reports like a CC or like a loan. If it reports like a CC, leave it alone. Don't put anything on it. Have her Cap One card post every month with about $18 or less. She can use the card as much as she wants, just before the STATEMENT date (usually a few days after the due date), the account should post with $18 of recent charges.


I totally agree with this strategy.


@this morning she apped for DCU Platinum Visa card and was Aproved w/ a $1000 limit!! @Anonymous.74 apr, which isnt the best but..... its a REAL 1st card. Now she can wait it out for 2 years or so and is bound to have a great score!


Message 5 of 14
SouthJamaica
Mega Contributor

Re: Building Credit


@Anonymous wrote:

Ok So, 

 

I am trying to help my niece build her credit... She is 21 years. So far she has 2 items on her report which are 1. Capital One Secured- $201 2. PENFED Thrifty CS- $500 and an Auto Loan for 26k. Her Ficos are EQ 628, TU 635 and EX 627. I tried to get her a PenFed card and it was a no go. She has 10 inq on her EQ and 7 on her TU. What could I do to guide her to have 700+ scores? Any Suggestions??


1. Make no more applications for awhile, to let the inquiries and accounts age.

2. Pay the auto loan down as fast as possible.

3. Let one of the 2 cards report a zero balance and the other report a balance of less than 10%.

 

When the scores are in the 650's, apply for a Barclay Rewards card and a Capital One Platinum or Quicksilver (Quicksilver if she's prequalified for it, otherwise Platinum).

 

Then wait at least 6 mos. before applying for anything again.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 6 of 14
SouthJamaica
Mega Contributor

Re: Building Credit


@Anonymous wrote:

@Anonymous wrote:

@daybreakgonesXe wrote:

Honestly, I think everything she has going for her right now is fine. Her scores are low because: if that auto loan is recent, she has a high current loan amount to total loan amount ratio; if the CCs were just opened, she has a low AAoA; and due to all of the above, those inquiries are killing her.

 

Just to double-check, she does not have any "baddies" on her report, right? No collections or charge-offs or late payments?

 

The quickest way to 700s at this point is to take a step back, let her accounts age, let inquiries fall off, and make sure she reports <10% utilization on only one card while paying in full the STATEMENT balance every month. I'm not sure if that PENFED Thrifty thing reports like a CC or like a loan. If it reports like a CC, leave it alone. Don't put anything on it. Have her Cap One card post every month with about $18 or less. She can use the card as much as she wants, just before the STATEMENT date (usually a few days after the due date), the account should post with $18 of recent charges.


I totally agree with this strategy.


@this morning she apped for DCU Platinum Visa card and was Aproved w/ a $1000 limit!! @Anonymous.74 apr, which isnt the best but..... its a REAL 1st card. Now she can wait it out for 2 years or so and is bound to have a great score!



Great.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 7 of 14
Anonymous
Not applicable

Re: Building Credit

I couldn't agree more.  Make sure she PIF each month and pay down the car loan as quickly as possible.  I got a huge chunk of my student loans paid down and they sold my loans which tanked my score.  Don't apply for anything else, just use what you need and pay it off, and ask for CLI if they are SPs to help build the overall limit and decrease overall utilization. Let the INQ fall off, and then she can leave the garden in a much better position, when she is ready.

Message 8 of 14
Anonymous
Not applicable

Re: Building Credit

 

Im an Auntie too! My nephew is 19 a couple of months ago he was trying for a credit card (could of been Capital One) I am not sure. 

 

He is actually my sisters son and she is a single Mom.  Her credit hit some hiccups the past few years.  She kind of put her head in the sand out of shame and would not let me look or help her work on her credit.  She is going to after he starts college.  Dads are not in the picture not financially and not in person.  I am actually his Aunt but in many ways I am a surrogate father .. I pay his cell phone and gym membership to help him out.  I don't feel comfortable co-signing, however what I discussed with my sister (his mother) is that I wanted to put him on as an AU on one of my cards, but sock drawer his card.  I may take it out to use for a small purchase ... but not even sure its necessary.  We have the same last name & have same town.  I would only do this for close family.  

 

Our intention is to do this for 6 months to a year contingent on him getting his own prime bank card, then to remove him as an AU. 

It is a temporary jump start to get him a score so that he can app.  Because he is not registering anything.  Its bad enough he has a dead beat father that has financially incumbered my sister, but now it reaches into my nephews adult hood.  This is not a woe with my nephew or my sister.  They are fighters !  My sister is tenacious.  She has had great credit but a series of events had her restart after loss of family & friend, moving, career changes etc.  She gets knocked down, but she wipes herself off and gets back up.  Then my nephew he just so anxious to chase after his dreams and make something of himself.  He also mentions wanting to be prepared to take care of his mother (my sister)   

 

Anyway,  it is a sacrifice to put someone on as AU.  Because even if you don't get them a card and they find out ... and do something dastardly to your credit.. like charge it up?  So really think about what you are doing and all the what if's.  There is always a risk even if its your spouse, siblings or your own children.  

 

I did think this out for quite some time.  My nephew have had obstacles and yes it makes you stronger and he is not the only person to go through life without a father.   But with that .. he is a good young man and if I can remove 1 obstacle to help him achieve independence and help him get a good start.... then that is what I am prepared to do and I have done. 

 

Just remember to research .. the one thing I did not know until yesterday .. is that if your AU is using your cards more than you are ....even if they are paying it in full.  It does throw up a red flag and you can get a freeze and a review on your account.  So always make sure you look like the Cardholder... if you look like the AU and the AU looks like the cardholder .. then that is not a good thing.  Also, put on all those credit card alerts .... especially if they are young.  

 

 

Your niece has a score going already - and if my nephew had those scores then I would not need to get him a giddy-up. 

So the only thing now to help your niece is time ... time in the garden. ... maybe she should be reading the forums and threads .. 

So that she can learn how to manage her credit.... she also can pass time while waiting for her scores to grow a bit. 

 

Honestly believe that she will have super sweet scores in 3-6 months. 

 

Good Luck and Keep us Posted. 

Message 9 of 14
grillandwinemaster
Valued Contributor

Re: Building Credit


@Anonymous wrote:

@Anonymous wrote:

@daybreakgonesXe wrote:

Honestly, I think everything she has going for her right now is fine. Her scores are low because: if that auto loan is recent, she has a high current loan amount to total loan amount ratio; if the CCs were just opened, she has a low AAoA; and due to all of the above, those inquiries are killing her.

 

Just to double-check, she does not have any "baddies" on her report, right? No collections or charge-offs or late payments?

 

The quickest way to 700s at this point is to take a step back, let her accounts age, let inquiries fall off, and make sure she reports <10% utilization on only one card while paying in full the STATEMENT balance every month. I'm not sure if that PENFED Thrifty thing reports like a CC or like a loan. If it reports like a CC, leave it alone. Don't put anything on it. Have her Cap One card post every month with about $18 or less. She can use the card as much as she wants, just before the STATEMENT date (usually a few days after the due date), the account should post with $18 of recent charges.


I totally agree with this strategy.


@this morning she apped for DCU Platinum Visa card and was Aproved w/ a $1000 limit!! @Anonymous.74 apr, which isnt the best but..... its a REAL 1st card. Now she can wait it out for 2 years or so and is bound to have a great score!



Strategy: 

GARDEN, GARDEN, GARDEN, and then GARDEN some more. She's done...

any questions??


Current Scores 3/2016 Equifax 676 Transunion 697 Experian 648 Goal Scores: 720's accross the board. Gardening Goal: 3/2017
Message 10 of 14
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