topic Re: First Credit Card in Credit Cards

First Credit Card

Anonymous — Fri, 09 Jan 2015 16:00:32 GMT

It's my first time on the boards and first time really dealing with credit, so I apologize if this is an ignorant question or not the right forum to present it.

I'm 28 years old and late to the game, just now focusing on my credit score. I'm looking to get my first credit card. My credit score appears to be in the 712-720 range with 0 marks, 0 inquiries in the past 2 years, 100% payment history, and Average Age of Credit is 7 years 8 months. The issue now is my "utilization". For the past 10 years I have been an "authorized user" on my father's credit card. I never actually used the card, it was just there for emergencies. However, he uses the card for all of his purchases and then pays the balance in full each month. So as far as my credit report is concerned, I've been charging $6,000 every month for the past 10 years and have a credit utilization of 79%. Yesterday (1/8/15) I officially removed myself as an authorized user from my fathers account, and am now looking to find my own credit card to build up my credit.

So I guess my questions would be:

1: Has being an authorized user on my fathers card hurt my credit in any long term way?

2: Was I correct in removing myself from the account before applying for my own card?

3: When should I apply for my new card? Is there a certain period of time I need to wait before the 79% utilization will no longer appear on my credit report?

4: Would it be foolish to apply for a card that looks for a good to excellent credit score such as the American Express Blue Cash Everyday card?

Thank you for any and all input.

Re: First Credit Card

1GaDawg85 — Fri, 09 Jan 2015 16:05:53 GMT

Have you tried any pre-quals?

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 16:13:42 GMT

No, I haven't done any pre-quals. Would that be the first step?

Re: First Credit Card

1GaDawg85 — Fri, 09 Jan 2015 16:18:35 GMT

Yes, that would your first move!

Re: First Credit Card

waters — Fri, 09 Jan 2015 16:24:10 GMT

Being an authorized user put you ahead of the game so no worries there.

I would try the chase and capital one pre qualify sites and see if anything comes up.

Good luck on your credit journey

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 16:29:57 GMT

Yea I would skip Capital Ones triple hard pull per application if you can do better, which I believe you can, but thats me. Unless you really want one of their cards. Try Chase, Amex and Citi prequals. Discovers card is great if it interests you but the prequal is useless so dont pay attention to it.

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 16:33:01 GMT

Thanks everyone for the awesome input and guidance. HeavenlyFlower are you happy with the Amex BCE and Discover It? Those were 2 I was seriously concidering.

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 16:39:35 GMT

Absolutely! Discovers online deals aside from the categories have been very useful to me. BCE is a nice back up to Sallie Mae and I did take advantage of one Amex offer so far. But if you are looking for a grocery card Id say try for Sallie Mae its 5% vs. 3% but has a $250 cap per month for groceries. Havent had the cards that long but pleased with all of them

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 20:15:33 GMT

Removing yourself as an AU probably destroyed your record. Typically, removal as AU removes the entire history related to that card, so you don't have the AAoA, utilization, or anything else related to that card any more. As far as your account is concerned, that card likely never existed.

My first card was a $500 card through my local credit union. I would recommend starting with whomever you bank with. You'll probably get a decent starter card through them, and be able to build your credit history from there.

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 20:20:56 GMT

Answering your actual questions...

So I guess my questions would be:

1: Has being an authorized user on my fathers card hurt my credit in any long term way?

Most likely, being an AU helped out your score tremendously, even with the spiked utilization

2: Was I correct in removing myself from the account before applying for my own card?

This was probably a large mistake. I'm guessing you lost 100 points in the process and are in the 600s now, assuming you have no other history. Basically, you're now a clean slate and the CCC's ahve nothing to go on. I'm not even sure how they would give you a score.

3: When should I apply for my new card? Is there a certain period of time I need to wait before the 79% utilization will no longer appear on my credit report?

Apply as soon as possible. Maybe you won't have been removed as AU yet.

4: Would it be foolish to apply for a card that looks for a good to excellent credit score such as the American Express Blue Cash Everyday card?

Yes and no. Apply for something basic first, like a card through your bank/credit union. If you get approved for that, you can apply for BCE/BCP, knowing you have something to fall back on. Amex BCP was my third card, so they do take relatively minimal histories. I think CapOne/Discover might also like thin histories.

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 20:45:53 GMT

Yesterday (1/8/15) I officially removed myself as an authorized user from my fathers account,

Sorry, completely missed this part Petrovius has given you good advice

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 23:17:12 GMT

Thanks for the really detailed answer. I didn't mention that I have 15 accounts in my credit history, 11 still open. Which also help keep my AAoA up. (Student loans from beginning in 2004 that have been in repayment since 2009). Do you think that will help offset the hit of losing the other credit card?

Again, thanks to everyone for the help. These forums are proving to be very helpful.

Re: First Credit Card

Anonymous — Fri, 09 Jan 2015 23:26:15 GMT

get something revolving on there before that AU goes away

Installments help, but not nearly as much as revolvers do.

Re: First Credit Card

Anonymous — Sat, 10 Jan 2015 15:40:14 GMT

Just wanted to let you know, I took your advice Petrovius, and went down to my bank today. I applied for their Visa rewards card (1.25% cash back) and was approved with a credit limit of $13,000 at 15.99% after the first 6 months. I was surprised the limit was so high as I only plan to use it for a few hundred per month. So I think I'll just use my new card for a while before applying for another one. I was starting to panic a bit after everyone agreed removing myself as AU was a mistake so thanks for all of the help!

Re: First Credit Card

Anonymous — Sat, 10 Jan 2015 16:34:42 GMT

Lol that should do the trick. Nice starting limit, yikes.

Re: First Credit Card

NRB525 — Sat, 10 Jan 2015 16:43:39 GMT

@Anonymous wrote:
Just wanted to let you know, I took your advice Petrovius, and went down to my bank today. I applied for their Visa rewards card (1.25% cash back) and was approved with a credit limit of $13,000 at 15.99% after the first 6 months. I was surprised the limit was so high as I only plan to use it for a few hundred per month. So I think I'll just use my new card for a while before applying for another one. I was starting to panic a bit after everyone agreed removing myself as AU was a mistake so thanks for all of the help!

App for the AMEX. Now.

Your credit report may not update right away, and with the results from the bank, its a good chance you will get a decent limit, and likely the basic card you want, from AMEX.

Today. This is what people refer to as a "mini spree". your credit report looks good for now, might not look so good... who knows when.

App today. you may get a denial, but oh well.

Good luck!

Re: First Credit Card

Anonymous — Sat, 10 Jan 2015 16:59:43 GMT

@NRB525 wrote:
@Anonymous wrote:
Just wanted to let you know, I took your advice Petrovius, and went down to my bank today. I applied for their Visa rewards card (1.25% cash back) and was approved with a credit limit of $13,000 at 15.99% after the first 6 months. I was surprised the limit was so high as I only plan to use it for a few hundred per month. So I think I'll just use my new card for a while before applying for another one. I was starting to panic a bit after everyone agreed removing myself as AU was a mistake so thanks for all of the help!
App for the AMEX. Now.
Your credit report may not update right away, and with the results from the bank, its a good chance you will get a decent limit, and likely the basic card you want, from AMEX.
Today. This is what people refer to as a "mini spree". your credit report looks good for now, might not look so good... who knows when.
App today. you may get a denial, but oh well.

Good luck!

I agree. A $13K CL right out of the gate screams opportunity is knocking.

Re: First Credit Card

csryang — Sat, 10 Jan 2015 17:08:32 GMT

@NRB525 wrote:
@Anonymous wrote:
Just wanted to let you know, I took your advice Petrovius, and went down to my bank today. I applied for their Visa rewards card (1.25% cash back) and was approved with a credit limit of $13,000 at 15.99% after the first 6 months. I was surprised the limit was so high as I only plan to use it for a few hundred per month. So I think I'll just use my new card for a while before applying for another one. I was starting to panic a bit after everyone agreed removing myself as AU was a mistake so thanks for all of the help!
App for the AMEX. Now.
Your credit report may not update right away, and with the results from the bank, its a good chance you will get a decent limit, and likely the basic card you want, from AMEX.
Today. This is what people refer to as a "mini spree". your credit report looks good for now, might not look so good... who knows when.
App today. you may get a denial, but oh well.

Good luck!

Totally agree with what he says. App now or soon for a mini app spree. I wanted to post the same thing and he beat me to it.

Reomoving yourself as an AU on a good account is a BIG mistake, apping for a random credit card at local bank is probably a small mistake if its sole purpose is for credit building. This is because your removal of AU might not reflect on your credit report till couple days or months later. And it's highly likely that the tradeline is still reporting now since you got a high credit limit on this card that you just applied. You should definitely try to use this chance to app for all the good cards (2-3?) that you want.

See the following link - general concensus is that tradeline will probably not be removed till the credit card's next closing date becaise that's when it's reporting. However, it might be earlier or later depending on the bank who issued the credit card:

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/How-long-does-removal-as-authorized-user-take-to-drop-off-my/td-p/3015194

http://ficoforums.myfico.com/t5/General-Credit-Topics/Being-removed-as-an-quot-Authorized-User-quot/td-p/1647056

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Authorized-Users-how-long-does-it-take-to-show/td-p/669157

Re: First Credit Card

Anonymous — Sat, 10 Jan 2015 17:52:56 GMT

@Anonymous wrote:
Just wanted to let you know, I took your advice Petrovius, and went down to my bank today. I applied for their Visa rewards card (1.25% cash back) and was approved with a credit limit of $13,000 at 15.99% after the first 6 months. I was surprised the limit was so high as I only plan to use it for a few hundred per month. So I think I'll just use my new card for a while before applying for another one. I was starting to panic a bit after everyone agreed removing myself as AU was a mistake so thanks for all of the help!

1.25% with that limit is fantastic. Congrats on the new card!

My advice was made under the assumption that you only had the one line of credit, which you were an AU on. As you mentioned, that is not the case, which mitigates the affects of removing yourself as AU from your father's account. Given that you have so many other accounts, it may actually be a positive, since you removed a large utilization factor.

The reason why people are urging you to apply for lots of cards right now is because HPs (hard pulls) are time based. They start decreasing in effect after six months and drop off your report entirely after two years. Therefore, if you do a bunch at once, they all drop off at once, rather than one every month or two. This gives you more of a score bump at the six month, one year, and two year marks. However, a couple of days isn't going to make much difference, since they go on your account immediately upon applying.

Given your great limit, I would scope out a couple more cards that you think would be beneficial for you. If you like cash back cards, the Sallie Mae card is very popular around here. Chase AARP is great for eating out. Chase Freedom and Discover IT are both good quarterly revolver cards. None of them have annual fees, so what you see is what you get in terms of rewards. If you would prefer the simplicity of just having one card, your current card is a great place to start. There are some that are better (Cap1 QS and Citi Double Cash), but you have a good limit with a decent return with your 1.25% card.

Good luck, congrats on the new card, and let us know if you have any further questions!

Re: First Credit Card

Anonymous — Sat, 10 Jan 2015 22:10:55 GMT

@Anonymous wrote:
Just wanted to let you know, I took your advice Petrovius, and went down to my bank today. I applied for their Visa rewards card (1.25% cash back) and was approved with a credit limit of $13,000 at 15.99% after the first 6 months. I was surprised the limit was so high as I only plan to use it for a few hundred per month. So I think I'll just use my new card for a while before applying for another one. I was starting to panic a bit after everyone agreed removing myself as AU was a mistake so thanks for all of the help!

Congrats dude. That's prime. Like others have said, drop an app for the AMEX BCE (or whatever you want) now. You'll get a good member since date and in 61 days (maybe even less) you can triple the initial limit they give you. After a few months, you can probably shoot for a good quarterly bonus card (Discover It, Chase Freedom, etc.) or a decent travel card if you want. Best of luck.