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The hardest part about building up your credit? Taking the initial score hit.

Established Member

The hardest part about building up your credit? Taking the initial score hit.

I'll admit, I've had a pretty good year, credit-wise. Through a combination of payments, negotiations, and on-time payments, I managed to raise my FICO score from 589 to 700 in exactly 12 months. At the same time, one glaring negative continued to haunt my credit profile: I had terrible amounts of credit available to me. I've been sitting at $3300 in available credit for over 5 years. I knew from my reading that the amount of credit, within reason, that other lenders extend to you can be a warning or welcome sign when attempting to obtain new credit, so I decided to do something about it.

 

Enter the app spree. And app spree I did. I chose a small group of core cards, and with only a single odd exception, I got them all. SO, my available credit went from $3300 to $14100. Since then, my scorewatch has done something of a rollercoaster.

 

First, the inquiries. THey hurt. My score started dropping bit by bit as each new inquiry hit my report. Ouch.

Then something odd happened. The first new account reported my available balance within days of receiving the card. Suddenly, my utilization dropped like a rock, and my credit score shot up! 722! Wow!

 

Then the other accounts hit. Suddenly, FICO was not so sure it liked me quadrupling my available credit in a small amount of time. Oh, you've decided to get a new car as well? Down some more!

 

It's not a big hit, and looking at my score, everything that might be negative has shown up now, so this should be as low as it goes. 675. I'm in it for the long run. After 2 years of aging and on-time car payments, and with increased usage and payoff history, I should be able to double again my available credit with CLIs within the next 2 years. The fact is, in the end, I had to fight for some of the cards, and it was my income that probably won the day. Even with all the new credit, I still have less than 10% of my household income available to me as credit, which I think it pretty below average.

 

I know in 2 years, it will pay off, and my credit score will be healthier than it has EVER been. But watching it drop when you've worked so hard to build it up is a bitter pill to swallow.  

In the garden til 8/31/14
Start 12/13: EX: 645 EQ: 676 TU: 672
GOAL: 720+ across the board
In my Wallet: Chase Southwest Rapid Rewards: $5,500; Capital One Platinum: $3,000; Barclay's Apple Visa: $2000; Chase Freedom: $2,000; Discover More: $1200; Orchard Bank: $400
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1 REPLY
Frequent Contributor

Re: The hardest part about building up your credit? Taking the initial score hit.

I think that's a great success story regarding how you turned your credit around in a year with hard work--way to go! You've also, it seems, been rewarded for your hard work with better lines of credit. Again, congratulations!

 

I know the initial drop in score due to the new accounts hurts because it seems to be cutting into the score you worked so hard to obtain. However, I would counter that the purpose of a high credit score is to obtain credit, and you've succeeded at doing that. Also, I think you'll be surprised by how quickly your score increases over the next 6 months--maybe not quite to the 700 level that you were at, but I would be surprised if you weren't over 690 in 6 months' time--or who knows, maybe you WILL be back to the 700 score that quickly, or even higher.

 

You deserve congratulations all around. Smiley Happy

BofA Cash Rewards Visa Sig $18,700 /Citi Double Cash $18,600 / Barclaycard Rewards $8,900 / CapOne Platinum $7,450 / BofA BankAmericard Visa $6,500 / Discover It $5,300 / Chase Freedom $1,500 / Lowe's $20,000 / JCP MC $6,500
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