Good afternoon everybody-
I am a new member to myFICO - very excited to see how I could positively change my score within the 2015 year. Before I ask any questions, allow me to give a few points to explain my current situation:
- I am a recent college graduate from a local art/technical school. Along with the student loans from the government, the institute provided me an additional loan because of how expensive the total tuition was to attend (about $100k). This required me to pay a monthly to stay enrolled; however, I was only able to make partial payments and was often late.
- Had two revolving/CC accounts - BofA and a local credit union. My account with BofA turned overdue/deliquent because of just a pure lack of responsibility and funds on my end. On the other hand, I was able to make small payments (barely above minimum) to the local CU to keep my account open/current.
- Luckily for me, I was taken in by a local agency after my internship 5-6 months prior to graduation - which allowed me to finally make the FULL monthly payments and ON TIME to my school since starting. This recent employment also allowed me to pay off my overdue/delinquent account with BofA and be fully in-contol of my CC with the local CU (paid off every month).
- Along with others of the millenial generation, I am in my mid-20s and still living at home. I also don't have a car of my own, but my parents have always just allowed me to use theirs (especially since one of them don't know how to drive).
I was embarrased of my situation... but 2014 was a good year in regards to self-reflection and realization. With college behind me (for now, I will pursue a post-graduate degree when I feel financially comfortable), I'd like to REALLY make an impact on my credit score and this is why I've taken the step to really monitor my progress. With those being said, here are a few of my main questions:
- As I was looking at my report, it shows that my "next best action" would be to open up a credit card with a limit of $2,500 or more. Do you have any suggestions on which company/bank to pursue? (My estimated annual income is $35k)
- With that, I also noticed something about my current revolving account - it seems to only report to EX. Is that common? Would it be smart to find a CC that reports to the other two (EQ, TU) to help even things out?
- During my down/off-time, I like to learn or improve my skillset within my industry (marketing/advertising/design) as well as do my own research on investments.I would also like some beginner investing methods from you guys. Any input will be greatly appreciated.
I know this first post is getting lengthy, and it can get longer if I don't stop myself now. Please feel free to ask me any questions that would help you provide a better insight/solution to my current situation. I look forward to hearing from you all and to a great 2015 financially.
Thank you.
@Anonymous wrote:Good afternoon everybody-
I am a new member to myFICO - very excited to see how I could positively change my score within the 2015 year. Before I ask any questions, allow me to give a few points to explain my current situation:
- I am a recent college graduate from a local art/technical school. Along with the student loans from the government, the institute provided me an additional loan because of how expensive the total tuition was to attend (about $100k). This required me to pay a monthly to stay enrolled; however, I was only able to make partial payments and was often late.
- Had two revolving/CC accounts - BofA and a local credit union. My account with BofA turned overdue/deliquent because of just a pure lack of responsibility and funds on my end. On the other hand, I was able to make small payments (barely above minimum) to the local CU to keep my account open/current.
- Luckily for me, I was taken in by a local agency after my internship 5-6 months prior to graduation - which allowed me to finally make the FULL monthly payments and ON TIME to my school since starting. This recent employment also allowed me to pay off my overdue/delinquent account with BofA and be fully in-contol of my CC with the local CU (paid off every month).
- Along with others of the millenial generation, I am in my mid-20s and still living at home. I also don't have a car of my own, but my parents have always just allowed me to use theirs (especially since one of them don't know how to drive).
I was embarrased of my situation... but 2014 was a good year in regards to self-reflection and realization. With college behind me (for now, I will pursue a post-graduate degree when I feel financially comfortable), I'd like to REALLY make an impact on my credit score and this is why I've taken the step to really monitor my progress. With those being said, here are a few of my main questions:
- As I was looking at my report, it shows that my "next best action" would be to open up a credit card with a limit of $2,500 or more. Do you have any suggestions on which company/bank to pursue? (My estimated annual income is $35k)
- With that, I also noticed something about my current revolving account - it seems to only report to EX. Is that common? Would it be smart to find a CC that reports to the other two (EQ, TU) to help even things out?
- During my down/off-time, I like to learn or improve my skillset within my industry (marketing/advertising/design) as well as do my own research on investments.I would also like some beginner investing methods from you guys. Any input will be greatly appreciated.
I know this first post is getting lengthy, and it can get longer if I don't stop myself now. Please feel free to ask me any questions that would help you provide a better insight/solution to my current situation. I look forward to hearing from you all and to a great 2015 financially.
Thank you.
A few things:
1. Pull all your credit reports. If you need free access you can get it once a year from annualcreditreports.com. You can also get free weekly access to the EQ and TU reports at Credit Karma.
2. Go to the rebuilding forum. See if you can get some of the late payments and other derogs removed. Specifically look up Pay for Delete (PFD) and goodwill letters. Removing these derogs will have the biggest effect on your score.
3. Your student loans are likely installment loans (if government ones anyway). Your credit cards are revolving accounts. A mortgage can improve your credit mix, but given your financial situation, a mortgage is a bad idea (plus it is not needed for good scores). Having 3 or so credit cards is good. If your scores are high enough to permit additional cards, getting up to 3 cards is nice. But don't focus too much on more cards as even 1 credit account is enough to establish a positive credit history.
4. Look into repayment options for your loans. 100k in loans for an art/technical school sounds like a lot, but luckily there are many loan repayment options. I graduated from law school with nearly 200k in debt. I am on the 10 year plan and actually pay more than the amount due each month due to my well paying job. I have friends who went into public sector and public interest work with 6 figure debt though. Unlike private sector big firms where starting pay is 160k with bonuses, public sector starting pay can be as little as 40k for an attorney. Due to Income Based Repayment (IBR) and public sector loan forgiveness programs they just have to make 10 years of payments at 15% (10% now for new grads I believe) of their discretionary income. This is potentially a huge savings. To give you an idea, my monthly loan payments are around $2k, but a friend of mine in public sector pays like $400 for a similar loan amount. IBR works even if you are not in a public sector position, but the loan forgiveness takes longer (25 years instead of 10) and there are tax consequences for the forgiven loan amount after the 25 years. If you have private loans or non-qualifying loans, however, this might not work.
