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haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: credit advice for my young sister who's 20!

It sounds like she's made a great step upwards in improving her overall credit profile.

And I think of this as steps, not as a smooth upward slope. Climb up and rest, climb up and rest. Her scores will be a lot better for it.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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hammer192
Posts: 70
Registered: ‎07-06-2008
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Re: credit advice for my young sister who's 20!

I would keep a few of the cards and PIF every month, save cash, spend cash, repeat..........................

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preci0uz
Posts: 157
Registered: ‎02-24-2008
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Re: credit advice for my young sister who's 20!

CreditAble,

 

Thanks for the advice. I don't think you read the entire post, pardon me, according to myfico score scale my sister does not have lousy scores or bad credit. She bought her fico scores after applying for the credit cards- TU 723 & EQ 699.   EQ is lower because it shows balances in 3 accounts (it's like $10 in each card) but since myfico recommmended they should be "0" she paid them off. 

 

Mom and dad gave her a car so no car loan and I know she won't be applying for a mortage anytime soon.

 

She was more concerned about not having a relationship with prime lenders. I don't know what you mean by "grown up cards". She applied and was approved for credit cards that would benefit her such has Chase, BOFA and Discover. Which of course were all thought carefully and she gains rewards when she uses the cards.

 

I don't know what you mean by  "Those card choices should not be made because the lender will approve her with lousy credit scores. That is what she is doing now."  She is not doing that. She didn't go in an application spree with bad lenders just because they'll approve with her anything. I though Chase, BOFA, and Discover were consider prime lenders.

 

She canceled 2 cards because of the fees/low credit limit and they wouldn't give a CLI. So they were just sucking up fees.

 

Thanks for the advice and concern.

 

 

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MattH
Posts: 3,245
Registered: ‎04-03-2008
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Re: credit advice for my young sister who's 20!

[ Edited ]

preci0uz wrote:

My sister is trying to get rid of her credit cards that have low credit lines and annual fees.  However, before I'm helping her obtain NEW cards.

 

Below is her information...

 

FICO SCORES BOUGHT TODAY :  TU 723 & EQ 699 

 

Name of Creditor/ Credit Line/ Date opened 

 

Walmart                           $350.00      10/2008

Macys Store Card             $1000.00     7/2007

Bloomingdales                  $1000         9/2007

KAY Jewelers                   $2000       12/2008

BOFA (Athorized User)    $1500          3/2008

CAP1                             $500.00      4/2008

1st Financial Bk              $150.00       7/2007 (just closed it) 

 

Newly applied today

 

Discover Student Card approved but we don't know the amount

Chase Freedom $1700 (instantly approved)

BOFA $1000 (denied because of young credit but reconned)

 

Denied

 

CITI because she didn't have enough credit referenes and were recently new accounts.

 

She doesn't have any collections or any late payments. Only negative is young credit history.

 

She doesn't care for the INQ dings or FICO affect right now because of the inquiry hits. She just wants to stablish relationships with good banks and get nice CLI.

 

I need your advice.. is this plenty of credit lines? should she apply for more or not? If she should apply, what creditors do you recommend she apply? 

 

FYI. She will be applying for the NFCU as well.

 

 

THANK YOU!

Message Edited by preci0uz on 04-02-2009 11:44 AM

For a person with a short history those are actually pretty good scores, and will improve with time (nearly half of all FICO scores are lower than hers).  Right now lenders are very skittish so a person with a thin file may not be able to get a high-limit card.  But if she keeps doing the right things (pay on time, keep utilization under 10%, don't apply too frequently, keep her oldest account active forever, etc) then in a few years she will almost certainly have FICOs over 760 and should then will get better offers.  In this economy, however, I think her first financial priority should be accumulating an emergency fund, her second financial priority should be not to accumulate much debt, and her third financial priority should be to start saving for her long-term goals.

 

When I was 20, it was extremely unusual for a college student to have a card, my first card was AMEX which I got in 1982 shortly after I got my undergraduate degree.  I still have an account with AMEX and intend to keep it forever because it's my oldest tradeline.

 

Message Edited by MattH on 04-04-2009 06:09 PM
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
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Posts: 513
Registered: ‎04-03-2007
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Re: credit advice for my young sister who's 20!


preci0uz wrote:

I don't think you read the entire post, pardon me, according to myfico score scale my sister does not have lousy scores or bad credit. She bought her fico scores after applying for the credit cards- TU 723 & EQ 699. 


I am sorry I did not see the credit scores. They were plainly posted. Anything over 700 is certainly a good score and with your sister's stated income, there was no (credit score) reason that she should have been declined for bank cards.

 

Of course the Citi card denial was for reasons other than her credit score. 

My remarks were addressing your statement that her credit scores were low.

My failure to see the actual scores caused me to believe that she had "low scores".  

 

 


preci0uz wrote:

She was more concerned about not having a relationship with prime lenders. I don't know what you mean by "grown up cards". She applied and was approved for credit cards that would benefit her such has Chase, BOFA and Discover. Which of course were all thought carefully and she gains rewards when she uses the cards.

 


 

The term "grown up cards" is used as opposed to the term "toy cards". Toy cards are easy to obtain cards for people with short  or thin credit files and lower credit scores.

 

Toy cards usually have low credit limits, high interest rates, annual fees, and other not so favorable terms. The term "grown up cards" are generally considered the harder to obtain "prime" bank cards. Chase and Discover are "grown up" cards.

 

Some of the cards on your sister's list are considered to be "starter: or "toy cards".   

 


preci0uz wrote:

I don't know what you mean by  "Those card choices should not be made because the lender will approve her with lousy credit scores. That is what she is doing now."  She is not doing that. She didn't go in an application spree with bad lenders just because they'll approve with her anything.

 


 

A question that you had posed was:

"I need your advice.. is this plenty of credit lines? should she apply for more or not? If she should apply, what creditors do you recommend she apply?" 

 

I interpreted (or misinterpreted) that statement as your sister wanted to acquire new credit for the sake of acquiring new credit. I had additionally failed to see that she had 700 FICO scores. Those scores are definitely not "lousy". :smileyindifferent:

 

 

 


preci0uz wrote:

 I though Chase, BOFA, and Discover were consider prime lenders..

 

She canceled 2 cards because of the fees/low credit limit and they wouldn't give a CLI. So they were just sucking up fees.

 

Thanks for the advice and concern.

 

 


They are not only considered prime but they are also "grown up" cards. So far your sister traded to "toy cards" for two "grown up cards".

 

Apart from the misconceptions I had about your sister's credit scores the rest of my advice still stands.

 

(1.) She already is close to being 700+ in all three files. That does not preclude her from obtaining prime cards.

 

(2.) Even if she could qualify for more cards scorewise, the average age of accounts is 10 or 11 months old. If she waits for a little over one year her AA will be over two years old. She won't be keeping her AA at sub one year levels. Buying a house five years from now, she will have an average age of less than six years if she doesn't apply for anything until then. Of course an average of 4- 6 years should be fine. Obtaining one or two more cards a year or two from now won't hurt that much. I personally have determined that 5-6 years average age is sufficient to obtain 800 FICO scores depending upon the rest of the credit profiles.  


 

 


 I have come to the conclusion that I will not refer to less than optimal credit scores as "lousy" anymore. That was a lousy choice of words.  :smileyindifferent:

 

 I will endeavor to find a kinder verbiage to describe those particular scores. I guess I will just stick to referencing "lower" as opposed to "higher" credit scores. 

 

 

 Not that your sister has "lower" credit scores. Her scores are however lower than 800.  In any event she could very well reach 800 in five years. Then she would definitely have "higher" credit scores.


 

 

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hobojon
Posts: 261
Registered: ‎01-20-2009
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Re: credit advice for my young sister who's 20!

You or your folks don't have an old card with good payment history and low utilization that she can be added to as an authorized user? The more old seasoned tradelines on the report the better.

I highly suggest anybody who is starting out in the credit journey get an Amex card NOW! The member since date is worth its weight in gold. 

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haulingthescoreup
Posts: 28,115
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Re: credit advice for my young sister who's 20!


hobojon wrote:

You or your folks don't have an old card with good payment history and low utilization that she can be added to as an authorized user? The more old seasoned tradelines on the report the better.



I have nothing against AU's --I'm AU on DH's Discover to help my length of history, because I have some lates and need help --but OP's sister actually has very decent scores for her length of credit, and she has no baddies (I think.) She doesn't need an AU card, because there is no point in artificially bumping up her scores if she doesn't need a certain figure to qualify for a car loan, mortgage, etc. Her scores are going to grow very nicely if she cools her jets and takes care of what she has. She should have 760's by the time she's 22.


hobojon wrote:

I highly suggest anybody who is starting out in the credit journey get an Amex card NOW! The member since date is worth its weight in gold. 



That's a great point, even as nutty as AmEx is. She might want to look at this in 6 months. Not now, though, let her new stuff establish itself. In the long run, six months won't make that much difference, and it will still show for subsequent cards as opened in 2009.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

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