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Valued Member
Posts: 45
Registered: ‎10-30-2008
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Re: Starting building credit. What card should I apply for?

Ok. That's definitely encouraging.

 

One of the complaints that I have with credit cards and this credit score thing in general is that they don't seem to bother very much looking at incomes. I understand why.. it's complicated and costly for them to retrieve that information and they'd rather rely to computers (fico scores). But yet in my opinion there's too much reliance on credit scores.

 

I've seen college students with close to no income and $7,000 of credit card debt getting good credit and receiving tons of pre approved offers in the mail, while I'm struggling to get anything. Other people in negative equity with their homes are also getting good credit while paying credit card debt with home equity loans.

 

Anyway, the thing are the way they are and I'm accepting them. I understand it makes things a lot easier, and I'll do whatever is possible improve my score. Thanks again for everyone's comment. Definitely helpful.

 

One question: should I apply for the Amex True Earnings in store, or online?

Regular Contributor
Posts: 141
Registered: ‎01-17-2008
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Re: Starting building credit. What card should I apply for?


xav wrote:

thanks for everyone's comment.

 

Then I'll try to get the Amex/Costco True Earnings. Who knows.. If it doesn't work I'll wait for another 6 months before applying anywhere.


I have an Amex/Costco True Earnings card and I wouldn't call the process easy.  My point is that having a Costco membership is a requirement to getting this card.  You will go thru the normal American Express approval process.

 

If you are approved, please keep in mind that Amex has really tightened up their credit standards, thus try to only use the Costco Amex card at Costco.  Build up some history with Amex over the course of a couple years.

 

Finally, also be aware that Amex does regular soft pulls of your CRs typically every month.  This is important because Amex doesn't like to see alot of new credit established after you get their card.

 

Guess what I am trying to say is that obtaining any Amex card is something that you consider when you are finishing rebuilding your credit and not while you are actively trying to open new tradelines.  As usual, different people's mileage may vary.

 

GL

Established Contributor
Posts: 640
Registered: ‎03-28-2008
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Re: Starting building credit. What card should I apply for?


xav wrote:

It's my first credit card, yes. Basically I've been establishing credit since July. I've had an SSN since late of may (I'm a new immigrant) .

 

I pay my bills 2 or 3 days before the "payment due date" . I thought that that the average daily balance was reported so that it didn't matter. Now looking at my statements, I see that I paid the statements 25 days after the end of my statement cycle. Looking at each of my 3 statements, I can see that my "new balances" were 0 , 30 and 16 % percent of my credit limit, so it shouldn't be too bad, yet higher than what you recommended.

 

Basically, my statements start on the second of the month and ends on first of the next month. I pay in full at the 23rd of the month, 2 or 3 days before the "payment due date", but which is after the statement. So when should I pay in your opinion?

 

Thanks for the help.


Ooh, no, it's not the average daily balance that gets reported to the CRAs (some credit cards do charge interest on the average daily balance though - not sure about Cap1, come to think of it!), it's whatever the statement balance is. So whatever you see on your statements is what's been reported to the CRAs each month. 
 I've always read that you  don't get a FICO score generated until six months after you first get credit - I didn't pull my FICOS until about 8 months after getting my first card over here (that Macy's one I mentioned - its credit line is now 2100% higher than when I opened it in April 2007!) so never got to find out if that is true firsthand. But just from my own experience, I did get the Macy's card with zero credit, no SSN, no credit file to pull, and a month later as soon as I got my SSN, I got a secured card with US Bank (who I had my checking with). I got the Capital One Platinum Visa in September 2007 (about 4 1/2 months after moving to the US) after getting a preapproved offer in the mail.
I'd still think a secured card would be the way to go for you with credit that new - how long ago did you apply for the BofA card? It might be worth talking to someone (try the backdoor number) to find out what they'd advise for people with totally new credit files - you don't want to waste another hard inquiry. And again, even if you don't really shop at Macy's, I can't recommend it enough as a great way to get your credit off to a good start, with pretty much guaranteed generous CLIs every 90 days (you have to request them, but they'll do it very happily, with no hard inquiry) - if you're going to go that route I'd suggest applying instore when making a small-ish purchase. I was talked into applying for mine when I was buying a colander two days after moving to the US, and thought there was no way I could get approved - but I did, albeit for $100. That $100 is now $2100. 
Sorry if this response is a bit rambling!  And welcome to the States, fellow-new-immigrant (well, I'm not totally new, I've been here 18 months now) - hope you're settling in well. Where are you from, if that's not too nosey? (I'm English, not that you asked!) :smileyhappy:

 

EQ: 723 / TU: 760 (August 2009)
Frequent Contributor
Posts: 277
Registered: ‎10-21-2008
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Re: Starting building credit. What card should I apply for?


Geordi wrote:

xav wrote:

thanks for everyone's comment.

 

Then I'll try to get the Amex/Costco True Earnings. Who knows.. If it doesn't work I'll wait for another 6 months before applying anywhere.


I have an Amex/Costco True Earnings card and I wouldn't call the process easy.  My point is that having a Costco membership is a requirement to getting this card.  You will go thru the normal American Express approval process.

 

If you are approved, please keep in mind that Amex has really tightened up their credit standards, thus try to only use the Costco Amex card at Costco.  Build up some history with Amex over the course of a couple years.

 

Finally, also be aware that Amex does regular soft pulls of your CRs typically every month.  This is important because Amex doesn't like to see alot of new credit established after you get their card.

 

Guess what I am trying to say is that obtaining any Amex card is something that you consider when you are finishing rebuilding your credit and not while you are actively trying to open new tradelines.  As usual, different people's mileage may vary.

 

GL


 

As Geordi said, AMEX (like many other creditors) do soft inquiries often to check your current credit status.  As long as you are following some of the guidelines to keep your credit score high, like staying below 5% across all your revolving credit balances and not being late on payments, they won't penalize you.

 

When you apply for new credit, it generates a hard inquiry (and you want to have at most one or two of those every 12 months - because more than one can start reducing your credit score), and if approved, as a new account on your report, which will reduce the average age of all your (open and closed) credit accounts.  If you don't have many accounts on your report, your average age can drop a lot. So your credit score would drop.

 

If AMEX does a soft pull after you get new credit, they will see the new hard pull(s) and the new lower average age of your credit, caused by you getting new accounts.   But as they do soft pulls after that, they'll see your score going up as the average age of your accounts increases, and as that hard inquiry falls off your report.

 

Just keep your balances low and use your credit carefully.  I had AMEX while I was building credit as a college student.  I didn't use it too much at the time (which was probably the right thing to do), and I never had any problems with them.

Valued Member
Posts: 45
Registered: ‎10-30-2008
0

Re: Starting building credit. What card should I apply for?

[ Edited ]

I'm French. In the UK you got something similar I guess right?

In France we don't.. and I'd probably get an Amex there much more easily than here. The more I look at this fico score thing, the more I hate it. Banks relied too much on this and it's partly why the credit problems are getting so bad.

 

I've applied earlier for the True Earnings. I want to give it a shot. If they call my employer it should definitely helps I guess. Now I know that they definitely prefer a student with no income and thousands of dollars of credit card debt AND a good credit score over me. It doesn't make very much sense in my opinion but I can't do anything about it.

 

This whole credit mess is going to get worse. That's why I'm giving another shot at getting one. I know I'm likely to get denied, but on the other hand, in a few months with a higher credit score I think it might even be harder. If I get denied, I'll just wait. Fortunately I have the Capital One card, which allows me to build credit, although not as fast as I would like.

 

I'll keep you guys informed of amex's decision.

Message Edited by xav on 11-02-2008 09:42 PM
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