topic Re: New to Credit Cards. Have some Questions. in Credit Cards

New to Credit Cards. Have some Questions.

Anonymous — Fri, 21 Apr 2017 21:36:39 GMT

Hello. I am in college and recently got my first credit card in december. It is the Discover it chrome for students. I have been paying it ontime everymonth and keeping under 30 bucks a month. It started at 500 limit, but i did the online CL and boosted it to 1k the other day. I know i dont have a FICO score yet but my TU and EQ vantage scores are 681 and EX is 696. As i only make 500 a month while im at school, I opend a credit builder loan. I know this is a good way to force a poor college kid to save haha Was this a good idea and will it help me with my scores at all? Will this credit builder loan of 500 help my scores? I plan to get another credit card in december when I have a year of ontime payments.

Re: New to Credit Cards. Have some Questions.

Anonymous — Sat, 22 Apr 2017 01:06:33 GMT

In my opinion the answer to both of your questions is Yes

Re: New to Credit Cards. Have some Questions.

Anonymous — Sat, 22 Apr 2017 06:12:31 GMT

Yes. And Yes. It's not the amount the creditors look at. It's your payment history they want to see. They want to see how regular you are with your payments. I wish I joined this forum like you when I was in college. Keep up the good work.

Re: New to Credit Cards. Have some Questions.

Anonymous — Sat, 22 Apr 2017 09:15:28 GMT

Absolutely. Keep util low, request a CLI in a few months and stay in the garden as you have planned. You're on track to a great CS!

Re: New to Credit Cards. Have some Questions.

CreditInspired — Sat, 22 Apr 2017 11:13:20 GMT

Littleman, you have your head screwed on right and you're headed in the right direction. I only wish I had been so credit smart and had sought credit advice when I was your age. Congrats on being on the right path to healthy credit.

Re: New to Credit Cards. Have some Questions.

Anonymous — Sat, 22 Apr 2017 11:49:53 GMT

1) Congrats on a great job so far🙌

2) Just to be clear the score Discover sends you monthly is a legitimate FICO score (TU) and you should sign up for their Free product with EP called credit scorecard.com which will give you a Free EP based score per month...That way you're at least getting two real scores per month.
You may want to check to see if you have scores you don't realize you have.

3) I made sure that both my college aged young ppl app'd for @ least 2 revolving accounts, there are a few reasons NOT to wait a year to add #2 ( had to push my 18 y.o. a little more than my 20 y.o.)
She said Dad do I really 'need' another card?

My answer
Yes because 1) It adds thickness and multiple TLs to your growing profile ( along with the MIX given the installment TL by adding the credit builder)
2) The early you add #2 they age together, thus building your profile with data along the way
Example if you WAIT to add card #2 till card #1 is 1 year old , now because #2 is 0 in age the average has now been cut in HALF...Making your Avg age of accounts now 6 months...Because a 12 month old card + a 0 aged card = 12months of history/ 2 accounts

Whereas if the 2nd card is only a few months younger it's much easier to have a THICKER file & a more mature AAoA

Card #1 (14 mo) + Card #2 (10 mo) = 24 months of history/ by 2 cards = AAOA of 12 months = Big difference

3) Having the additional CL of the 2nd account further allows the utilization rate to be pretty, thus appearing lower risk which = higher score

4) Allow TIME to work in your favor, especially during this sorta 'dead' time during college where like my daughter, you aren't looking to actually 'use' credit
IMO that's the BEST time to allow it to GROW in the background

Allow it to simmer in the pot, checking in on it every now and then, to make sure nothing burns, stir a little and let the video game play out

As mentioned, right now you are only out to 'impress' the judges...To be CLEAR, it is NOT about "creditors" per se ...Right now you are stroking the scoring model, the risk calculation made by the FICO model
Forget creditors for now, they run BEHIND what the score says so the scoring model is who needs to be stroked at this point.

And it's just a computer program, once you know what it likes like any program you can manipulate it.

'She' craves
On time payment history (35%)
You're giving it to her with 3 different accounts✓
Low debt ratio/ Utilization (30%)
Give 'some' usage, so the place looks 'lived-in'
Age or Time is the 3rd of the Big 3 (15%)
That's why you want the cards growing 'together'

That's 80% of the model ( New Credit & Inq each being 10% a piece for the balance 20)
Now YOU are in control of the entire scenario.

* Note the On time payment history is built the same with a $10 payment or a $1M payment it's a Yes/No, T/F scenario as far as the scoring model cares
Either the account Paid as Agreed or Not, that's it.
So that $500 loan is scored just the same as a $5000 loan

The utilization ratio is simply based upon the % of CL usage the scoring model 'sees' 9% debt usage as calculation of whatever the numbers are the number of zeros isn't important to the model, just the %

And we all know Time is Time, same for everyone

The point is as long as the score gets stroked UP by the time it's 'time' the apply for something 'real' the score will be HIGH due to the manipulation to have built it high and thick at that point the terms and CLs will shine....

The bottom line is it's just like school ,those that study earlier and plan well, get ahead and generally STAY ahead while everyone has does their best to stay afloat and 'survive' ....

I always say learn to play Chess, while others are given Checkers 💪

Re: New to Credit Cards. Have some Questions.

Anonymous — Sun, 23 Apr 2017 00:38:42 GMT

Anyone know what cards I should think about applying for? I dont think its a good idea now because im a student but I have the credit builder loan of 500 debt so im assuming I would get denied based on my income. Any suggestions? Should i try now to get another or wait till I pay off some the credit builder loan

Re: New to Credit Cards. Have some Questions.

800who — Sun, 23 Apr 2017 00:44:15 GMT

It sounds like you are on the right track, don't miss any payments, try to keep your balance right around 10% or under compared to your limit also don't build up too many hard inquiries such as CL increase requests or attempting to open other lines of credit

Re: New to Credit Cards. Have some Questions.

Anonymous — Sun, 23 Apr 2017 05:18:41 GMT

Congrats on starting your credit history! I too am a college student who is still early in their credit journey. If I were you I would wait until 6 months after I got my first card before applying for a second in order to ensure that you have a score reporting, and have a good shot at getting approved. Also for income, most creditors allow you to report grants and scholarships, so that may allow you to report a more substantial income. Lastly, if you're over 21, you can report any reasonably accessible income.

Re: New to Credit Cards. Have some Questions.

Anonymous — Sun, 23 Apr 2017 14:58:24 GMT

Well I did the credit builder loan to help strengthen my payment history faster! Idk when the time is to apply for a new one and which ones to apply for. Any suggestions? With my 5-7k income and my investment accounts of 6500. Would I have a shoot of getting approved for number 2? I'm scared the 500 CB loan will make it so I won't

Re: New to Credit Cards. Have some Questions.

HeavenOhio — Sun, 23 Apr 2017 15:07:13 GMT

What was the initial loan amount?

What is the current balance on the loan?

How long is the loan set up to last?

Are you allowed to pay ahead on the loan without shortening its lifespan?

Re: New to Credit Cards. Have some Questions.

Anonymous — Sun, 23 Apr 2017 15:42:59 GMT

It's 582 total. First payment Due May 20th. It's for a year and you can pay it off early but that. Can shorten it span. So it's 48.5 a month. Paying early will defeat the CB loans purpose. I just don't know when to apply for a new card and which ones

Re: New to Credit Cards. Have some Questions.

HeavenOhio — Sun, 23 Apr 2017 15:57:02 GMT

No, you definitely don't want to defeat the purpose of the loan.

The sweet spot for a loan is 9% utilization or below. That's why I asked about it. When a loan is new, utilization is high, and your score is likely dinged a little. As you pay it down, it starts having a positive effect on your score. Once it's paid off, if it's your only loan, there'll be a significant score drop.

There's a popular loan that a lot of people here get. You might want to consider applying for it a couple of months before your current loan ends. Summarizing, you set up a $500 savings account with Alliant Credit Union, secure a $500 five-year loan with the savings account, pay off all but $44, and spend the rest of the five years paying off the $44. This is all done on a soft pull. The first three posts of the thread explain everything you need to do.

As far as applying for a card, I'd do it when you have FICO scores. They should come in at a point where your loan and positive payment history are doing you good. Others here would be in a better position to advise you on specific cards.

Re: New to Credit Cards. Have some Questions.

Anonymous — Sun, 23 Apr 2017 15:59:13 GMT

So roughly my vantage scores are 696,681. So how much of a drop can I expect when it gets reported? How about when I have another CC and the loan ends in one year? My history will always be ontime!

Re: New to Credit Cards. Have some Questions.

grillandwinemaster — Sun, 23 Apr 2017 16:15:47 GMT

@Anonymous wrote:
1) Congrats on a great job so far🙌

2) Just to be clear the score Discover sends you monthly is a legitimate FICO score (TU) and you should sign up for their Free product with EP called credit scorecard.com which will give you a Free EP based score per month...That way you're at least getting two real scores per month.
You may want to check to see if you have scores you don't realize you have.

@3) I made sure that both my college aged young ppl app'd for @ least 2 revolving accounts, there are a few reasons NOT to wait a year to add #2 ( had to push my 18 y.o. a little more than my 20 y.o.)
She said Dad do I really 'need' another card?

My answer
Yes because 1) It adds thickness and multiple TLs to your growing profile ( along with the MIX given the installment TL by adding the credit builder)
2) The early you add #2 they age together, thus building your profile with data along the way
Example if you WAIT to add card #2 till card #1 is 1 year old , now because #2 is 0 in age the average has now been cut in HALF...Making your Avg age of accounts now 6 months...Because a 12 month old card + a 0 aged card = 12months of history/ 2 accounts

Whereas if the 2nd card is only a few months younger it's much easier to have a THICKER file & a more mature AAoA

Card #1 (14 mo) + Card #2 (10 mo) = 24 months of history/ by 2 cards = AAOA of 12 months = Big difference

3) Having the additional CL of the 2nd account further allows the utilization rate to be pretty, thus appearing lower risk which = higher score

4) Allow TIME to work in your favor, especially during this sorta 'dead' time during college where like my daughter, you aren't looking to actually 'use' credit
IMO that's the BEST time to allow it to GROW in the background

Allow it to simmer in the pot, checking in on it every now and then, to make sure nothing burns, stir a little and let the video game play out

As mentioned, right now you are only out to 'impress' the judges...To be CLEAR, it is NOT about "creditors" per se ...Right now you are stroking the scoring model, the risk calculation made by the FICO model
Forget creditors for now, they run BEHIND what the score says so the scoring model is who needs to be stroked at this point.

And it's just a computer program, once you know what it likes like any program you can manipulate it.

'She' craves
On time payment history (35%)
You're giving it to her with 3 different accounts✓
Low debt ratio/ Utilization (30%)
Give 'some' usage, so the place looks 'lived-in'
Age or Time is the 3rd of the Big 3 (15%)
That's why you want the cards growing 'together'

That's 80% of the model ( New Credit & Inq each being 10% a piece for the balance 20)
Now YOU are in control of the entire scenario.

* Note the On time payment history is built the same with a $10 payment or a $1M payment it's a Yes/No, T/F scenario as far as the scoring model cares
Either the account Paid as Agreed or Not, that's it.
So that $500 loan is scored just the same as a $5000 loan

The utilization ratio is simply based upon the % of CL usage the scoring model 'sees' 9% debt usage as calculation of whatever the numbers are the number of zeros isn't important to the model, just the %

And we all know Time is Time, same for everyone

The point is as long as the score gets stroked UP by the time it's 'time' the apply for something 'real' the score will be HIGH due to the manipulation to have built it high and thick at that point the terms and CLs will shine....

The bottom line is it's just like school ,those that study earlier and plan well, get ahead and generally STAY ahead while everyone has does their best to stay afloat and 'survive' ....

I always say learn to play Chess, while others are given Checkers 💪

What Gemini said!

Follow his plan, he's been there done that!

Experience vs Conjecture is priceless!