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1yr history: any long-term options?

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jesseh
Frequent Contributor

1yr history: any long-term options?

Hi all,

 

I have three credit cards (of which 2 secured) totalling a limit of $2250. My util is low and I PIF each month. My credit history only started a year ago.

 

Now, I don't expect to have to apply for a loan in the coming few years, but I want to do whatever I can now, to make sure my score is as high as possible when I apply for a auto loan or mortgage in a few years.

As INQ's drop off after 2yrs, I don't mind taking those now if it helps me in the future.

 

I don't have any other type of loans besides credit cards, and my util is already as good as possible. So I was thinking of these things:

 

- Apply for an AmEx, so I can get new cards backdated in a few years and improve my history. (15% of the fico)

- Get a different type of loan (installment, secured loan?) to improve my credit mix. (10% of the fico)

 

Any advice? 

Thanks

Cards: BCE 24k 5/'17 | CF 12k 10/'15 | IHG 12k 10/'15 | HH 6k 6/'18 | DS It 6k 3/'15 | TR 5k 11/'15
Scores: 760-770 | Inquiries: 0-1 | Utilization: 0-10% | AAoA: 3yrs | Bank: Ally | CU's: Navy & Pentagon
Message 1 of 14
13 REPLIES 13
takeshi74
Senior Contributor

Re: 1yr history: any long-term options?

Message 2 of 14
jesseh
Frequent Contributor

Re: 1yr history: any long-term options?

Oh shoot. can i do anything else now to help my credit in the future?

Cards: BCE 24k 5/'17 | CF 12k 10/'15 | IHG 12k 10/'15 | HH 6k 6/'18 | DS It 6k 3/'15 | TR 5k 11/'15
Scores: 760-770 | Inquiries: 0-1 | Utilization: 0-10% | AAoA: 3yrs | Bank: Ally | CU's: Navy & Pentagon
Message 3 of 14
gdale6
Moderator Emeritus

Re: 1yr history: any long-term options?


@jesseh wrote:

Oh shoot. can i do anything else now to help my credit in the future?


Just make sure you keep on top of what you have. I would be thinking about what kind of cards you want going forward (travel rewards, cash back, low interest rate, etc).

Message 4 of 14
Anonymous
Not applicable

Re: 1yr history: any long-term options?

If you are going to app the mortgage in the next 12 months just sit tight and garden.

If longer, so you can afford to age off the inqs:

1. Work on converting you secured to unsecured

2. App good cards you will use for years

3. Work on increasing your credit limit to see if you can get a good bank card with a limit over $5k

You want to end up in the long run with 3-4 great cards you regularly use with high limits.

Once you are within a year of your mortgage app just stop and garden.




Message 5 of 14
Anonymous
Not applicable

Re: 1yr history: any long-term options?

I am in a similar situation by the way, 9 months credit history because I moved to the US recently. My belief is that our early goal should be to establish a number of accounts we can keep for years to ensure later apps don't destroy AAoA.

The trick is you don't want garbage, you want good cards you will be happy to still have in ten years. Bank cards, and only store cards that you would actually use a lot. Cards with decent rewards and no AF.

If you can get that going then those great cards will serve you well for years, giving you a lot of "weight" at the oldest end of your credit report, and minimizing the impact of a future auto loan or card app on your AAoA.

But again once you get to a year away from a big app just stop and let time age your accounts.
Message 6 of 14
Revelate
Moderator Emeritus

Re: 1yr history: any long-term options?

If we're talking years, look at what cards would benefit you as a number of decent rewards cards are available at the 1 year mark.

 

I would also open a secured installment loan, size doesn't really matter, Alliant or DCU or probably SDFCU or others on their minimum amount are just fine as long as it reports.

 

You've got some time, I'd thicken up the file some and get some longer-term cards.




        
Message 7 of 14
flan
Regular Contributor

Re: 1yr history: any long-term options?


@Revelate wrote:

If we're talking years, look at what cards would benefit you as a number of decent rewards cards are available at the 1 year mark.

 

I would also open a secured installment loan, size doesn't really matter, Alliant or DCU or probably SDFCU or others on their minimum amount are just fine as long as it reports.

 

You've got some time, I'd thicken up the file some and get some longer-term cards.


Getting a loan for the sake of credit score is a waste of money.  Get a loan when you need it for financial reasons.  With a few years history, and nothing negative, an only credit card proifile can get scores in the high 700s, which is good enough for anything. 

Message 8 of 14
jamie123
Valued Contributor

Re: 1yr history: any long-term options?


@flan wrote:

@Revelate wrote:

If we're talking years, look at what cards would benefit you as a number of decent rewards cards are available at the 1 year mark.

 

I would also open a secured installment loan, size doesn't really matter, Alliant or DCU or probably SDFCU or others on their minimum amount are just fine as long as it reports.

 

You've got some time, I'd thicken up the file some and get some longer-term cards.


Getting a loan for the sake of credit score is a waste of money.  Get a loan when you need it for financial reasons.  With a few years history, and nothing negative, an only credit card proifile can get scores in the high 700s, which is good enough for anything. 


I'm sorry but I disagree with your statement that it is a waste of money to get a shared secured loan with a credit union like Alliant Federal Credit Union.

 

You can get a 4 year $500 shared secure loan at Alliant with an interest rate of 2.7% right now. The total interest cost over 4 years is only $28. That is only $7 per year! Some people pay more for their daily Starbucks than what that loan would cost you in a year!

 

And yes, it will help that you have installment loan history on your reports when you app for an auto loan or mortgage.


Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20
Message 9 of 14
flan
Regular Contributor

Re: 1yr history: any long-term options?

And


@jamie123 wrote:

@flan wrote:

@Revelate wrote:

If we're talking years, look at what cards would benefit you as a number of decent rewards cards are available at the 1 year mark.

 

I would also open a secured installment loan, size doesn't really matter, Alliant or DCU or probably SDFCU or others on their minimum amount are just fine as long as it reports.

 

You've got some time, I'd thicken up the file some and get some longer-term cards.


Getting a loan for the sake of credit score is a waste of money.  Get a loan when you need it for financial reasons.  With a few years history, and nothing negative, an only credit card proifile can get scores in the high 700s, which is good enough for anything. 


I'm sorry but I disagree with your statement that it is a waste of money to get a shared secured loan with a credit union like Alliant Federal Credit Union.

 

You can get a 4 year $500 shared secure loan at Alliant with an interest rate of 2.7% right now. The total interest cost over 4 years is only $28. That is only $7 per year! Some people pay more for their daily Starbucks than what that loan would cost you in a year!

 

And yes, it will help that you have installment loan history on your reports when you app for an auto loan or mortgage.


In four years,you could very easily have a 780 fico score, with just credit cards, which puts you in the top tier for everything.  So yes, that's $28, plus the opporutinity cost of not having the securing $500 available, that's done you no good.  That's easily $100 for a piddling, meaningless, improvement.   Sounds like a waste to me.

 

 

Message 10 of 14
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