From 0 to 800: An experiment in building a credit file from nothing.

[p-]

I have a unique responsibilty acting as a financial advocate for a disabled family member.  This means that I handle all banking, bill payments, and financial planning for her.  She has an income of less than ten thousand per year, and has run intosome credit roadblocks like challenges renting an apartment, etc..  So, I am helping her to bring up her credit score.  

The first thing we discovered upon attempting to pull her file is that she had no credit history at all.  Everything that she had on there from her working years is long since aged off, and nothing else was added.  So the first task is establishing some credit.

She is an eleigible USAA member, and I run all of her banking through USAA, so I figured the easiest place to start was there.  Sure enough, she received instant approval for a USAA Visa card, with a limit of 500 dollars.  Her first actual credit card ever.  Since February she has been running bills like her cell phone and online Amazon shopping through it.  After the first statement cut, her Experian Vantage 3.0 score was 696.  She has limited finances, so we are using that score that is provided free of charge by USAA for now.

After a couple of months of use on the card, her score is now 698.  This is with only that one 500 dollar card on an otherwise empty report, with a statement balance of 0.

[p-]

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p- wrote:... her score is now 698. This is with only that one 500 dollar card on an otherwise empty report, with a statement balance of 0.

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Today I added her as an authorized user to my Quicksilver card.  It is my oldest active revolver at 8 years, and should leave her with an AAOA of just over 4.  It has a limit of 8,200 and a zero balance.  We will see what effect that has on her score.  I assume a change from .25 years to 4 years AAOA will improve things.

Coming up, we are leaving a $1.00 balance on her USAA Visa when her next statement cuts.  We'll see if that gives her a bump for having utilization.

[p-]

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p- wrote:...Today I added her as an authorized user to my Quicksilver card...

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This is a little off topic; I noticed on the cap1 site when I went to add her that sending a card was optional.  It appears that you can set up an authorized user without issuing them a card.  Now what do you suppose the purpose of that is?

[Tim_S]

p-

Keep us posted!  Interesting so far.

[SouthJamaica]

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@p- wrote:

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p- wrote:... her score is now 698. This is with only that one 500 dollar card on an otherwise empty report, with a statement balance of 0.

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Today I added her as an authorized user to my Quicksilver card.  It is my oldest active revolver at 8 years, and should leave her with an AAOA of just over 4.  It has a limit of 8,200 and a zero balance.  We will see what effect that has on her score.  I assume a change from .25 years to 4 years AAOA will improve things.

Coming up, we are leaving a $1.00 balance on her USAA Visa when her next statement cuts.  We'll see if that gives her a bump for having utilization.

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If she has only one credit card, I don't think she will get any points from reporting a balance as opposed to reporting a zero balance.

[RonM21]

To SJ's point above, it might be better to see if she can get a second card. I don't know if it would need to be a secured or not. But I think that would help the score when both are reporting. Some say 3 is even better. But I guess one step at a time.

[p-]

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If she has only one credit card, I don't think she will get any points from reporting a balance as opposed to reporting a zero balance.

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I guess that depends on how they read the AU account.  Her banking address is my address, and we both have the same last name.  Is utilization calculated solely on your own cards, or does that include AU? 

[Anonymous]

It should count AU cards as well.

Has she pulled her score since her AAoA has gone up to 4 years?  Assuming it bumped her up over 700, she could probably scoop up another card at this point that may throw her a $2k+ limit.  With multiple accounts on there (with responsible use) over the next 6 months or so with another account reporting she could see score growth happen a little quicker IMO.

[p-]

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BrutalBodyShots wrote: It should count AU cards as well.

Has she pulled her score since her AAoA has gone up to 4 years?  Assuming it bumped her up over 700, she could probably scoop up another card at this point that may throw her a $2k+ limit.  With multiple accounts on there (with responsible use) over the next 6 months or so with another account reporting she could see score growth happen a little quicker IMO.

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That's what I thought.  I considered adding her to my 25k star wars card, but I figured the oldest one would help her more.

I just added her yesterday, so no update yet.  She's on a low fixed income, so we'll be waiting for the free score from USAA to update before we see the change.  As fun as it would be to put her in a FICO monitoring, she doesn't have the cash for that, and I'm on a financial diet.  We probably won't be adding more cards; given her income it would be a problem if she somehow ended up with a year's pay in credit card debt.  

The goal for this project is score alone.  She'll never buy a house or a car, and doesn't need to borrow large amounts of money, so if we can get her score to max without a bunch of high credit limits, that's what we're going to do.  The most important thing is if she needs to move to another apartment, or finance some dental work, or something, that she has a shiny set of 800's when they pull her file.

Also, I think it would be interesting to dispel the myth that you have to be high income to have good credit.

[Anonymous]

I think that myth is already dead and gone.  You can be a 20 year old with a part time job making $15k per year and as long as you have a good mix with low utilization and perfect payment history possess an 800 score.  My scores were in the 800's from about age 21-24 before I ever had a "real" job/income.