Opinions on Tiered Lenders, Bankcard vs Store Card, and FICO Scoring

[RMN]

Caution!!!!!  Do not get an in-store card,  brick and mortar, online, or whatever.  There is a slogan from the people in the know about how FICO works, "Get their card, save $10 and ruin your credit". You cant win the game, if you dont know what the rules are and FICO doesnt want you to know the rules. I would not recommend Cap One as it is not a "real" bank.  Trust me on this one.  If you must, get a tier ! card, from a real bank, BofA, Wells Fargo, Chase, even if secured, if that is what it takes.  Then put everything on it.  Dont write another check or pay with debit.  Then, pay it off or a lot of it, every month, and watch your credit limit increase quickly.  Be responsible and dont let the card run away from you. Now, the clincher.  If you get in that window to refinance, do it with a real bank, if you qualify.  That will be very advantageous to your credit.  But if you dont get a real bank to say yes, you should find someone to refinance that auto loan every two years anyway.  If you implement a correct  strategy, a total overhaul of your credit should take about 5 years.

(Mod edit - Thread created from another topic; title has been updated to summarize OP's topic)

[elim]

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@RMN wrote:

Caution!!!!!  Do not get an in-store card,  brick and mortar, online, or whatever.  There is a slogan from the people in the know about how FICO works, "Get their card, save $10 and ruin your credit". You cant win the game, if you dont know what the rules are and FICO doesnt want you to know the rules. I would not recommend Cap One as it is not a "real" bank.  Trust me on this one.  If you must, get a tier ! card, from a real bank, BofA, Wells Fargo, Chase, even if secured, if that is what it takes.  Then put everything on it.  Dont write another check or pay with debit.  Then, pay it off or a lot of it, every month, and watch your credit limit increase quickly.  Be responsible and dont let the card run away from you. Now, the clincher.  If you get in that window to refinance, do it with a real bank, if you qualify.  That will be very advantageous to your credit.  But if you dont get a real bank to say yes, you should find someone to refinance that auto loan every two years anyway.  If you implement a correct  strategy, a total overhaul of your credit should take about 5 years.

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   "Capital One Financial Corporation is an American bank holding company specializing in credit cards, home loans, auto loans, banking and savings products."

[RMN]

I do know how Capital One defines itself, but that is not how FICO defines it. Capital One is a tier 2 classified card, as well as, Discover and American Express. AMEX surprised me at first, since they advertise as a prestige card.  By the way, businesses hate AMEX. You are not doing them a favor by using it, or yourself. Tier 1 is dominated by the banks we are familar with. Those banks are the key and if you cant breach that sizable barrier with good standing credit, an established relationship with a credit union or community bank is the best way in.  Most individuals with challenged credit will simply be hard declined from tier 1 until they become, on paper, credit worthy. Store cards are tier FOUR!  According to the complicated calculations implemented by FICO, a person with sensitive credit, most of the time, will do damage, when they get a card like that, then it adjusts over time.  It could be good or bad depending on where it leads.  As a matter of fact, Capital One chases down people with challenged credit that get these cards and gives them a 300 credit limit card.  Did that person get an offer from a tier 1 bank? Nope.  

[Anonymous]

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@RMN wrote:

Caution!!!!!  Do not get an in-store card,  brick and mortar, online, or whatever.  There is a slogan from the people in the know about how FICO works, "Get their card, save $10 and ruin your credit". You cant win the game, if you dont know what the rules are and FICO doesnt want you to know the rules. I would not recommend Cap One as it is not a "real" bank.  Trust me on this one.  If you must, get a tier ! card, from a real bank, BofA, Wells Fargo, Chase, even if secured, if that is what it takes.  Then put everything on it.  Dont write another check or pay with debit.  Then, pay it off or a lot of it, every month, and watch your credit limit increase quickly.  Be responsible and dont let the card run away from you. Now, the clincher.  If you get in that window to refinance, do it with a real bank, if you qualify.  That will be very advantageous to your credit.  But if you dont get a real bank to say yes, you should find someone to refinance that auto loan every two years anyway.  If you implement a correct  strategy, a total overhaul of your credit should take about 5 years.

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This is just plain bad advice. Cap One isn't a "Real Bank"???

Your usage advice is good but the whole "real bank" thing is just nuts.

[Anonymous]

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@RMN wrote:

I do know how Capital One defines itself, but that is not how FICO defines it. Capital One is a tier 2 classified card, as well as, Discover and American Express. AMEX surprised me at first, since they advertise as a prestige card.  By the way, businesses hate AMEX. You are not doing them a favor by using it, or yourself. Tier 1 is dominated by the banks we are familar with. Those banks are the key and if you cant breach that sizable barrier with good standing credit, an established relationship with a credit union or community bank is the best way in.  Most individuals with challenged credit will simply be hard declined from tier 1 until they become, on paper, credit worthy. Store cards are tier FOUR!  According to the complicated calculations implemented by FICO, a person with sensitive credit, most of the time, will do damage, when they get a card like that, then it adjusts over time.  It could be good or bad depending on where it leads.  As a matter of fact, Capital One chases down people with challenged credit that get these cards and gives them a 300 credit limit card.  Did that person get an offer from a tier 1 bank? Nope.  

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Some legitimate cite for this *might* make it believable.

[RMN]

I just want to clarify my stance on Cap One.  If there is no way in to get a credit card, your credit union, community bank, tier 1 cards, like Bof A, Wells, Chase, even secured, then go to Cap One. After all it is tier 2. If you think your credit is really challenged, get a store card, because, surprise, Cap One will be there waving a 300 credit limit card no matter how low, or reasonably high, your debt ratio is.  Look on this forum. Count how many people started with a Cap One 300 credit limit card.  Do you think everyones' financials are the same. No. It is a common practice Cap One uses to increase its customer base.  Pretty easy to get in. And they dont suck! You might get other offers from card companies you never heard of. Yikes. They are predatory.  But if you have a chance at something better than Cap One, go for it.  Since Cap One is tier 2, that only leaves tier 1 cards.  Store cards are what I say. Dont get a store card if Cap One accepts you, already. 

[RMN]

Welcome to the world of the rules of FICO.  They are nuts.  That is why everyone is so frustrated.  You have mistaken their terminology with what you think is my terminology. I stand by what I say.  FICO came into existence in the 20th century, these banks are rooted in hundreds of years.  Cap One is tier 2 and FICO likens its business practices as such, specifically, its underwriting. If I am mistaken on this, it is only their classification as tier 2, could be tier 3.  I am saying tier 2 just to move this forward because it doesnt matter, they are not tier 1.. A "real bank" to FICO is squarely in tier 1. To illustrate my point, someone just got a Cap One credit card with their challenged credit.  Why didnt they just get one from their bank, lets say BofA.  I think we all know why.

[RMN]

Last post on this.  I have to say two responses on this thread to my postings where disappointing.  It was disappointing not because it was a personal affront, it was disappointing in that people sometimes cant just open a window to the possibility things arent what they thought.  Translation:  FICO wins.  One requested a "cite" (sic) to support my post.  Really.  Do you think FICO or any financial institution will just give it up.  Google tier 1/2/3/4 credit yourself and see what happens.  Now, do you think the institutions themselves are not classified as such, also, by FICO itself.  The other one calling me nuts for what was FICO terminology as a "real bank". This response was a head shaker in its hostility. Cant help rigid thinking. All I can say to this to all you card users that have Cap One and such.  Step back and ask yourself why Cap One and the such gave you credit at the time and your own bank didnt.  The prior statement is to people that it APPLIES to.  

[Anonymous]

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@RMN wrote:

One requested a "cite" (sic) to support my post. 

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Cite, as in citation. Not site, as in website. Although you could cite a site, and that site would be a sight.

[Anonymous]

"Google tier 1/2/3/4 credit "

You're conflating lending tiers with scoring.