Newbie to Credit

[Anonymous]

Hey MyFicoers!

I'm a brand new my fico member.... I'm absolutly LOVING this website!!

Ok, So heres my story..

I am 21 years old, I had NO credit no score nothing! In November 2015 I opened a Cap One Secured Card with a Credit Line of $200 with that CL I maxed it for a couple months because it was just too small of a limit. In Apr. 2016 I decided I needed a new car because my previous car (2009 Honda Civic Coupe w/ 221k mi) needed TONS of repair and it just wasnt worth it to fix and spend ALL that money on a car with 221k miles. At that time I had just taken on a new job making a fixed salary of abt 30k/yr. I still live with parents so i haven't any bills all my income is in savings, gas and food. I decided i wanted a 2015 Chev Camero LT RS so i went on ahead and bought it, my dad had to cosign due to limited history.. I walked out with a 3.2% apr and a payment of 382 for 75mos. Ok so fast forward to now... I wanted to do something to my car (Install a flowmaster) and really didn't want to dip into savings and wanted to finance but my credit was still fresh so really began the BUILD process and went on an "App Spree". 

I immidiatly went to DCU and got approved for a SL of $1000, i then went to Cap One and apped for a QS1 and was approved for $500. I was ecstatic by then and was like hmmmm i wonder what AMEX will say so i went for the Everyday and to my surprise I got approved for a SL of $1000. I looked into two more which were the Citi Double Cash and Marvel Mastercard. Approved for both!! Marvel- $2000 and Citi- $500. I needed to stop by then. So my question to you guys is what should I do to better my credit at this point. My auntie added me as an AU on both her chase freedom unl and united, the Freedom has a $7,200 limit and the United has a $1,500 limit can i remove my self now or is it not a good idea??

Please Reply with thoughts! Thanks for reading!!

[takeshi74]

If your first credit account was in 11/2015 you need to cool your jets.  Don't just assume that you can constantly get new credit accounts because you've been approved so far.  For a young credit profile like yours there is a bigger impact from having new accounts on your reports as well as the impacts to your AAoA from opening new accounts, hard pulls, etc.  The low limits you've received are a sign that your creditors have concerns with your credit which should be a surprise given how new your oldest account is and how many accounts you've opened since then.

Spend your time educating yourself on how credit is assessed and work on responsibly managing the accounts you have now and your finances.

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@Anonymous wrote:

My auntie added me as an AU on both her chase freedom unl and united, the Freedom has a $7,200 limit and the United has a $1,500 limit can i remove my self now or is it not a good idea??

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You have your own tradelines and need to focus on them.  If the accounts where you're an AU are in good shape it doesn't hurt to be on them but you don't really need them.  Being an AU isn't inherently beneficial.  It's all about the attributes of the tradeline and when accounts where you're an AU are considered they're basically factored in like any other account.  From a FICO scoring perspective here are the standard factors and their typical weights:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Payment History must be 100%.  Any lates or other derogs will not help.

Revolving Utilization (balance[s] / limit[s]) on your revolving accounts which includes credit cards has a significant impact and falls under Amounts Owed.  The balance to loan ratio on your installemnts (auto, mortgage, student, etc loans) matters as well but doesn't have the same impact as revolving utilization.

Your Average Age of Accounts plays a signfiicant role in Length of Credit History.  Again, since your oldest account is from 11/2015 and you've opened a bunch of new accounts you're going to have a very low AAoA at this point.

Credit Mix is a matter of the types of accounts that you have and with several revolving accounts and an installment you'll see some benefit from this factor.

New Credit is the new accounts on your reports, hard pulls, etc.  While this is typically 10% you may see a bigger impact from it since your credit profile is so young.

The above link is just a starting point and there's much, much more to credit.  The link above only covers FICO scoring which is only one consideration for a creditor.

[AverageJoesCredit]

Very nice job so far. You have gotten approved for some really nice cards but i think you should now take a step back, let these cards age a bit and in no time youll see better opportunities come along. Since your so new to credit, dont get hooked to app sprees or spree just to spree. Look at what will help you the most ,what will grow with you. I agree with above poster, you are establishing your own credit now, being a AU is not teally necessary. Should something go wrong with their accounts it could come back to haunt you. Garden a bit and with some time, youll have yourself a rock solid profile. That, in the end will help you out the most in a couple of years. Best of luck on your journey

[Anonymous]

take it easy, slow down, let your cards age a bit, make sure to keep the ulitization low and always PIF each month. Let your scores rise a bit and develop a more established credit history

[Appleman]

So how long do you see yourself living at home? 75 more months? Probably not...

So think about the future and what you plan to do as you head out on your own. This means starting to look at budgets. Start putting away money that you will eventually need for rent, down payments, utilities, the seemingly endless bills that come from supporting yourself.

You are in the awesome position to have your scores take off.

As other have said, ALWAYS pay ontime, early if you are able, well before the due date.

Make sure that you are not over utilizing your cards. At your age I thought cards were FREE money. I would say only carry 9% utilization on one card max. It will be much better to pay in full each month but let at least one card report between 1-9 %.

You have a nice Camaro (no e) but your return on investment at your age for improving the cars performance is not good. Keep it stock so there is no warranty concern later on and enjoy the car.

You are in an enviable position but it will take some mature thinking and values to take full advantage of you current situation. 

It will be much easier to strike out on your own with no credit card debt, $10,000 in the bank and only a car payment (that maybe you paid extra on).

Best of luck with your bright future!