Young and trying to establish credit

[Anonymous]

Hello all!

First, I want to thank everyone on this forum, you guys ROCK!

I am 18 years old and in the process of building my credit.  Currently I have 4 accounts:

Citibank Student Card - Opened July 08  94/840 (just paid off the balance)

Macys - Opend March 09  0/300 - (Original CL 100, they gave me a $200 increase in April without asking!  yeah!)

CaptialOne Opened March 09 - 0/500

Victoria Secret - Opened March 09 - 0/350

The Cap1 and VS cards are not showing up my credit reports yet.

I have applied for credit and have been denied

My FICO scores are EX 668 and TU 721 (confused about the huge difference)  My AAofA is 6 months.

Any recommedations on where I can apply and will be approved?

Thanks!

[Anonymous]

Do you need more credit? What some don't realize is there is such as "too much credit". Meaning a creditor may deny you if they feel you already have too much available credit and they see this as a risk-- especially in this current climate.

What is your goal? To just establish credit? Apply for a home? Apply for a car loan?

Message Edited by sidewinder on 04-15-2009 09:01 PM

[Anonymous]

Thanks for replying!

I do not plan on making any purchases in the near furture.  My goals are to establish a solid credit history so that in 1-2 years I can apply for an auto loan without needing a co-signer and to get approved for a Discover card

I am trying to understand why I am not being approved for credit.  I thought my scores were at least decent...

[Anonymous]

Did those scores come from this site?

What reasons are you getting on your declines? Your scores may not be the problem.

IMO, only thing I would consider adding is an installment loan from a bank or CU. I wouldn't add anything else and just let things age.

[Anonymous]

I ordered both scores from this site one the same day so now I am really confused!  Most of the denials were because of not having enough accounts and history.  I also received a few denials from WNFB for too many inquires!  That was the only reason.  I have 11 on my Experian report. 

Should I just be patient and wait 6-8 months or so before applying for new credit?

[Anonymous]

Unless you need credit, I would stop for now and let things age.

[Anonymous]

Thanks!

Any idea as to why my scores are so different, both the reporting the exact same information?

[Mzpatient]

Please stop applying for credit. You have not established any credit history which takes years. When lenders look at your credit report all they are seeing is that you are applying for credit all over the place. Some creditors look at that negatively and think that you are liability because you appear deseparate in a sense. They could possibly believe that you don't have cash that is why you are looking for other means of paying power. Also stay away from the department store cards. If you have a secured credit card that is enough. You are too young to start developing so many inquires on your report. Also, inquires have a negative impact on your credit score. That may be another reason why you have such a big difference in your scores. One company hasn't caught up on the amount inquires you have obtain than the other. Plus being denied credit affect your score. So please slow down and like previous people have stated you don't need any more credit establish history.

One last thing and I will shut up I promise. With this economy the other reason you may be denied is because companies have restricted their lending practices so don't take it too personally. It is a liability issue.

[Anonymous]

Stop applying for credit!  You are only going to get denials and add more inquiries to your credit report which will decrease your score.

When you apply for new credit, what creditors see when they pull your report is that you have four open accounts.  Let's say each account has a limit of $10,000, that means you have a total of $40,000 in credit you can use.  When a creditor make a decision it is based on your ability to pay and part of that is to consider if you max all of your lines would you be able to pay.

In this economy many people are applying for credit and then charging to the max and not paying.  This is one of the main reasons banks and creditors are failing.  Not only are some not giving new credit but they are lower the limit on people that already have credit.

If you want to build credit work with what you have by using the credit and making payments on time.  Over time your score will rise.  Also the first credit card that you received (unless it has a annual fee) never close it because that establishes your length of credit history.

[Anonymous]

Ms Patient and Navy:

Thank you so much for your replies!  Unfortunately, I think I screwed up!  I wish I would have seen your post sooner...

Here's the skinny...

Last Friday I applied for BofA credit card and was approved, so I went on a spree.   I added 4 new accounts in a matter of 2 days.

BofA

Discover

State Farm

Hooters MC

Total Credit Lines

Citi

Capital One

Macy's

Victoria Secret

BofA

Discover

State Farm

Hooters MC

I completly lost control and I should be ashamed, but honestly I am still flying high because I reached my goal to get a Discover card sooner that I expected...I figured since I was not applying for any more credit in the near future I might as well take my hits all at once and by the time I am ready to buy my car, they will be gone from my reports.

Trust me, I am done applying for credit until I am ready to buy my car in a couple of years.  Maybe in few years I will add one more Prime card  - Amex, but I am in no rush!  I know Amex cards are pretty hard to get.

So the moral of this story for all newbies is to listen to great the advice the experts have shared here  and don't do what I did!