topic Re: 24 no credit smh in Credit Cards

24 no credit smh

Anonymous — Sun, 08 Oct 2017 10:50:02 GMT

Ok I never really cared about my credit until I wanted to get a loan to purchase a duplex to start in real eatate, I have one secured card (discover it). My question is should I get another secured card or garden the discover for 6 months before adding another card?

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 11:02:06 GMT

I'd get several secured cards now, low SL ($200-$300) and then garden for a while

Re: 24 no credit smh

jc2 — Sun, 08 Oct 2017 12:21:47 GMT

do you know your current scores?

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 14:06:38 GMT

@jc2 wrote:
do you know your current scores?

he has no scores yet

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 14:29:01 GMT

@Anonymous wrote:

@jc2 wrote:
do you know your current scores?

he has no scores yet

He has a secured card. So he very well might have a score.

Re: 24 no credit smh

happypill — Sun, 08 Oct 2017 14:41:59 GMT

I would recommend getting at least 2 more secured cards. If you literally have zero credit history, you might as well get several cards to grow at the same time. You'don't have any AAoA (average age of accounts) to worry about so there's no downside to getting more secured cards right away. That way, they can age together and when you do apply for addiitonal accounts in the future, you'll have more accounts to buffer your account age.

The caveat of course is that you shouldn't run up and carry balances, a mistake that a lot of new credit users make. You should look for no-fee or very low-fee options and pay in full each month.

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 15:00:08 GMT

I do not have a score, only had the secure card for 2 months

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 15:09:54 GMT

@happypill wrote:
I would recommend getting at least 2 more secured cards. If you literally have zero credit history, you might as well get several cards to grow at the same time. You'don't have any AAoA (average age of accounts) to worry about so there's no downside to getting more secured cards right away. That way, they can age together and when you do apply for addiitonal accounts in the future, you'll have more accounts to buffer your account age.

The caveat of course is that you shouldn't run up and carry balances, a mistake that a lot of new credit users make. You should look for no-fee or very low-fee options and pay in full each month.

Ok that's what I was thinking but didn't know if applying for additional cards would hurt me in long run. So with me gardening 3 cards do I keep one card at 9% or less and the other 2 at 0? What do you think my score will be after gardening for 6 months with the 3 cards? And should I add an installment loan after 6 months?

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 15:11:09 GMT

@Anonymous wrote:
@Anonymous wrote:

@jc2 wrote:
do you know your current scores?

he has no scores yet
He has a secured card. So he very well might have a score.

I do not have a score, only had the secure card for 2 months

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 18:16:47 GMT

@Anonymous wrote:
@happypill wrote:
I would recommend getting at least 2 more secured cards. If you literally have zero credit history, you might as well get several cards to grow at the same time. You'don't have any AAoA (average age of accounts) to worry about so there's no downside to getting more secured cards right away. That way, they can age together and when you do apply for addiitonal accounts in the future, you'll have more accounts to buffer your account age.

The caveat of course is that you shouldn't run up and carry balances, a mistake that a lot of new credit users make. You should look for no-fee or very low-fee options and pay in full each month.

Ok that's what I was thinking but didn't know if applying for additional cards would hurt me in long run. So with me gardening 3 cards do I keep one card at 9% or less and the other 2 at 0? What do you think my score will be after gardening for 6 months with the 3 cards? And should I add an installment loan after 6 months?

No, applying for additional cards will help you in the long run, a lot, as happypill said with the average age of accounts, and also with the overall number of accounts. Happyhill said 2 more, but I'd say get 4 or 5 total, it may feel overwhealming but you're going to bulletproof your credit record for the rest of your life. Most of us had only 1 credit card for 10 years, and then we apply for 4 credit cards and a car loan and our avg age goes from 10 to 1.5 years. And there's no way to fix that later. Wish I had gotten this advice when I started. This is a shortcut to reach 800+ quick.

Keep balances only on 1 of them. If you keep it on 2 it's ok too for some flavours of FICO, not for others. If you keep no balances it'll drop your score for that month only. If you keep 2+ accounts with balance it'll damage your score and report. 9% is fine, but just $10-$15 is even better.

Keeping all cards active is as easy as charging something every month or every other month, and PIF right after that.

AFter gardening 6 months with 3 cards (I recommend 4-5 though) you'll be 700+ for sure, if no mistakes. After 2-3 years you'll be 800+ if you combine that with 1 installment loan (car, student, mortgage).

Discover is the best secured car IMO, check also cap1 and credit unions. Don't take annual fees whatsoever at this point.

24yo is perfect, I started to have credit at 37... I had a Dave Ramsey sort of philosophy after my degree in economics

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 18:31:09 GMT

Agree, try to get 2 or more more cards IF AND ONLY IF you can get them without crazy fees or AFs that are not warranted. Try the cap 1 prequal page to see what you can get from them. By all means, stay away from credit 1.

Yes, use them but make sure the balances are paid before statement cut date to let one balance report as you asked in the previous post.

I would also suggest getting a share secured loan (use the forum search feature for all you need to know about them) to add credit mix. In about 4 more months you will be able to pull credit scores. Come back and let us know where you stand then.

Re: 24 no credit smh

Gregory1776 — Sun, 08 Oct 2017 18:36:34 GMT

@Anonymous wrote:
@Anonymous wrote:
@happypill wrote:
I would recommend getting at least 2 more secured cards. If you literally have zero credit history, you might as well get several cards to grow at the same time. You'don't have any AAoA (average age of accounts) to worry about so there's no downside to getting more secured cards right away. That way, they can age together and when you do apply for addiitonal accounts in the future, you'll have more accounts to buffer your account age.

The caveat of course is that you shouldn't run up and carry balances, a mistake that a lot of new credit users make. You should look for no-fee or very low-fee options and pay in full each month.

Ok that's what I was thinking but didn't know if applying for additional cards would hurt me in long run. So with me gardening 3 cards do I keep one card at 9% or less and the other 2 at 0? What do you think my score will be after gardening for 6 months with the 3 cards? And should I add an installment loan after 6 months?
No, applying for additional cards will help you in the long run, a lot, as happypill said with the average age of accounts, and also with the overall number of accounts. Happyhill said 2 more, but I'd say get 4 or 5 total, it may feel overwhealming but you're going to bulletproof your credit record for the rest of your life. Most of us had only 1 credit card for 10 years, and then we apply for 4 credit cards and a car loan and our avg age goes from 10 to 1.5 years. And there's no way to fix that later. Wish I had gotten this advice when I started. This is a shortcut to reach 800+ quick.

Keep balances only on 1 of them. If you keep it on 2 it's ok too for some flavours of FICO, not for others. If you keep no balances it'll drop your score for that month only. If you keep 2+ accounts with balance it'll damage your score and report. 9% is fine, but just $10-$15 is even better.
Keeping all cards active is as easy as charging something every month or every other month, and PIF right after that.

AFter gardening 6 months with 3 cards (I recommend 4-5 though) you'll be 700+ for sure, if no mistakes. After 2-3 years you'll be 800+ if you combine that with 1 installment loan (car, student, mortgage).

Discover is the best secured car IMO, check also cap1 and credit unions. Don't take annual fees whatsoever at this point.
24yo is perfect, I started to have credit at 37... I had a Dave Ramsey sort of philosophy after my degree in economics

What happens If an account is closed?

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 18:57:10 GMT

What bank do you use? If you use a major bank like BOA, Chase, Wells Fargo, go to your local branch and see if you can get qualified for any of their cards. I walked into my BOA branch, with zero credit and asked my representative if he could qualify me for anything. I left with a Cash Rewards card approval. Just make sure whatever route you go to pick up cards that have no annual fee, and that you don't carry a balance on any interest-bearing card.

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 19:20:03 GMT

@Anonymous wrote:
Agree, try to get 2 or more more cards IF AND ONLY IF you can get them without crazy fees or AFs that are not warranted. Try the cap 1 prequal page to see what you can get from them. By all means, stay away from credit 1.

Yes, use them but make sure the balances are paid before statement cut date to let one balance report as you asked in the previous post.

I would also suggest getting a share secured loan (use the forum search feature for all you need to know about them) to add credit mix. In about 4 more months you will be able to pull credit scores. Come back and let us know where you stand then.

I will definitely will be giving an update

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 19:31:54 GMT

@happypill wrote:
I would recommend getting at least 2 more secured cards. If you literally have zero credit history, you might as well get several cards to grow at the same time. You'don't have any AAoA (average age of accounts) to worry about so there's no downside to getting more secured cards right away. That way, they can age together and when you do apply for addiitonal accounts in the future, you'll have more accounts to buffer your account age.

The caveat of course is that you shouldn't run up and carry balances, a mistake that a lot of new credit users make. You should look for no-fee or very low-fee options and pay in full each month.

The info I needed!

Re: 24 no credit smh

Anonymous — Sun, 08 Oct 2017 20:25:18 GMT

@Gregory1776

If 1 account is closed and he keeps the other 4, basically nothing happens. His oldest age and avg age remain exactly the same, his # of accounts remains the same, his # of OPEN accounts gets reduced 20%, that'll affect pretty much nothing.

He shoudn't close any account though, keeping them active with a $1 (or less) payment a month or every other month is enough. More than 6-12 months in a row with zero activity can get it cancelled by issuer, not good.

The idea behind the many-accounts-in-the-beggining strategy is:

-If you open 1 CC only, garden 5 years, and then want to open 2 more acc, after those 5 years your average age of accounts will be (5+0+0)/3= 1.7y --AAoA from 5y to 1.7y, big fico drop, plus many credit card issuers rejecting your apps based on "Not enough experience with this limit/type of credit", and you need after that 3 1/2 years gardening to fully recover from that hit to your score and get AAoA back to 5y again.

-If you open 5 CC now, garden for the same 5 years, and then open 2 more acc, after 5 years your AAoA will be ((5x5)+0+0)/7= 3.6y --from 5y to 3.6y, little fico drop, plus CCCs can't argue your experience. You need little more than 12mo gardening to fully recover from a very small hit.

Also, if all the age of your record is basically on 1 card, you have zero negotiating power with that issuer, simply bc you can't close it. If you have 5 old accounts instead, and 1 of them is giving you problems, you're free to choose, you can actually threaten with cancellation and do it, with a 1-3 points drop that you recover in 1-2 months, instead of a 20-50 drop that you recover in 2-3 years.

Nobody starts off with 5+ secured CCs unless told to, bc all this is counterintuitive. There, that's a hack you can take advantage of and will enjoy its benefits forever

······

edited for typos

Re: 24 no credit smh

elim — Sun, 08 Oct 2017 19:38:41 GMT

@Anonymous wrote:
Agree, try to get 2 or more more cards IF AND ONLY IF you can get them without crazy fees or AFs that are not warranted. Try the cap 1 prequal page to see what you can get from them. By all means, stay away from credit 1.

Yes, use them but make sure the balances are paid before statement cut date to let one balance report as you asked in the previous post.

I would also suggest getting a share secured loan (use the forum search feature for all you need to know about them) to add credit mix. In about 4 more months you will be able to pull credit scores. Come back and let us know where you stand then.

+1 on the Share Secured Loan.

You can usually go to a local CU, hand them 1k, and they will hand you a 1k check back (for the SS loan), which you can hand back to them on the deposit of a Secured CC. You can knock two out at once, adding 2x green marks on your reports while waiting for your Fico's. This will also add an installment loan to your credit mix. I used this method and now have a great relationship with my main CU.

Congrats on the decision to build... You have definitely found a great place (myFico) to make it a success. Stay involved and read all you possibly can. I like this link to keep up on all credit topics here.

Re: 24 no credit smh

BurgeoningHope — Sun, 08 Oct 2017 20:56:47 GMT

Agree with everyone suggesting front-loading your credit with cards now rather than stringing them out. The math speaks for itself. I want to emphasize no-AF cards because no one knows what the future holds - no-AF cards can sit in the sock drawer when times are tough without costing you a thing. Just run a charge through them every once in a while to keep them alive and immediately PIF. (Don't get depressed and hide from it all, like I did.....)

For that reason, concentrate on no-AF at this phase of your journey. Interest rates do not matter because you will not be carrying balances, and because the primary purpose for these cards will be for account ageing, not debt management. Down the line you'll qualify for better cards and low interest rates all over the place. So 24.99%? Sure!

Another reason to open a few now - some people posit that "toy" credit limits on cards lead other lenders to give you really low credit limits themselves, so all your credit lines may suffer because of that $300 card that refuses to grow with you. You may need to trim one or more of those early cards, which as others have pointed out is easier when it's not your only old card.

Finally, some lenders are sensitive to inquiries and new credit lines. Chase's 5/24 rule leaps to mind. So yeah, you'll be hurting in that area for a little while too. But inqs stop hurting your score at 12 months, and fall off entirely at 24. By then you'll have no "new" credit lines, no inqs, a great credit score, and will be in the driver's seat for your next life goals!

Re: 24 no credit smh

Anonymous — Mon, 09 Oct 2017 19:21:04 GMT

@Anonymous wrote:
@Anonymous wrote:
@happypill wrote:
I would recommend getting at least 2 more secured cards. If you literally have zero credit history, you might as well get several cards to grow at the same time. You'don't have any AAoA (average age of accounts) to worry about so there's no downside to getting more secured cards right away. That way, they can age together and when you do apply for addiitonal accounts in the future, you'll have more accounts to buffer your account age.

The caveat of course is that you shouldn't run up and carry balances, a mistake that a lot of new credit users make. You should look for no-fee or very low-fee options and pay in full each month.

Ok that's what I was thinking but didn't know if applying for additional cards would hurt me in long run. So with me gardening 3 cards do I keep one card at 9% or less and the other 2 at 0? What do you think my score will be after gardening for 6 months with the 3 cards? And should I add an installment loan after 6 months?
No, applying for additional cards will help you in the long run, a lot, as happypill said with the average age of accounts, and also with the overall number of accounts. Happyhill said 2 more, but I'd say get 4 or 5 total, it may feel overwhealming but you're going to bulletproof your credit record for the rest of your life. Most of us had only 1 credit card for 10 years, and then we apply for 4 credit cards and a car loan and our avg age goes from 10 to 1.5 years. And there's no way to fix that later. Wish I had gotten this advice when I started. This is a shortcut to reach 800+ quick.

Keep balances only on 1 of them. If you keep it on 2 it's ok too for some flavours of FICO, not for others. If you keep no balances it'll drop your score for that month only. If you keep 2+ accounts with balance it'll damage your score and report. 9% is fine, but just $10-$15 is even better.
Keeping all cards active is as easy as charging something every month or every other month, and PIF right after that.

AFter gardening 6 months with 3 cards (I recommend 4-5 though) you'll be 700+ for sure, if no mistakes. After 2-3 years you'll be 800+ if you combine that with 1 installment loan (car, student, mortgage).

Discover is the best secured car IMO, check also cap1 and credit unions. Don't take annual fees whatsoever at this point.
24yo is perfect, I started to have credit at 37... I had a Dave Ramsey sort of philosophy after my degree in economics

Ok I can add a second card but probably have to wait till next month to add the 3rd would that mess up my aaoa

Re: 24 no credit smh

Anonymous — Mon, 09 Oct 2017 23:16:09 GMT

OP is looking for a mortgage loan I would think, so I would be more cautious about opening several cards. The appplication will be much more scrutinized than an automated cc app, and getting "too many" recent lines of credit could well be viewed negatively for this.