topic Re: How do I move up the credit card ladder? in Credit Cards

How do I move up the credit card ladder?

jimmy2000 — Fri, 24 May 2019 04:25:31 GMT

Hi everyone, I have been browsing around as a non-member for awhile but I am very frustrated.

My credit score seems to be stuck around 660 (reported on CK and CreditWise) on both TU and Experian. How do I move up the credit card ladder and start seeing my score raise?

I'm 18, so my credit history is extremely limited, but I do have 2 cards that I use a lot.

I have a Barclay's Apple Rewards, $700 limit, and a Capital One Journey with a $500 limit (started at 300). I really have been eyeing the Costco Anywhere Visa, but I now I need a much higher score. My credit has not improved much at all from when I first started out with these 2 cards, so I'm not sure what I'm doing wrong. Any advice (besides waiting)?

Re: How do I move up the credit card ladder?

Anonymous — Fri, 24 May 2019 04:29:35 GMT

Do not use CreditKarma. You are better off get real scores like through this website but go to the home page or get one from credit bureaus and get your real score and see the credit report to see why and then fix it from there then wait about 2-3 months then go apply like Captial One Secured or Discover Secured and play for 6-8 months, then you will be able to get more cards.

Re: How do I move up the credit card ladder?

851 — Fri, 24 May 2019 05:06:15 GMT

You'll need to show them you have income - the more stable and verifiable the better.

Then you need to demonstrate you can manage what they give you access to.

When I was your age I took out a small personal loan and literally deposited it into an account only to repay it. I looked at the interest as the cost of establishing credit. Max the cards so that your CR shows how much you spent and that you paid it off. I'd advise always having cash to pay the balance before you do this.

Re: How do I move up the credit card ladder?

aircobra — Fri, 24 May 2019 04:58:35 GMT

I'd look into getting another card (maybe Disco or AMEX). Building credit is a marathon, not a sprint. Don't expect jumps in your score so quickly. Definitely get your FICO scores though, Vantage is pretty much useless. You're not doing anything wrong, you're only 18 with a thin profile. Patience is key.

Re: How do I move up the credit card ladder?

sarge12 — Fri, 24 May 2019 05:10:12 GMT

@jimmy2000 wrote:
Hi everyone, I have been browsing around as a non-member for awhile but I am very frustrated.

My credit score seems to be stuck around 660 (reported on CK and CreditWise) on both TU and Experian. How do I move up the credit card ladder and start seeing my score raise?

I'm 18, so my credit history is extremely limited, but I do have 2 cards that I use a lot.
I have a Barclay's Apple Rewards, $700 limit, and a Capital One Journey with a $500 limit (started at 300). I really have been eyeing the Costco Anywhere Visa, but I now I need a much higher score. My credit has not improved much at all from when I first started out with these 2 cards, so I'm not sure what I'm doing wrong. Any advice (besides waiting)?

The highlighted part is likely the reason, but your Vantage 3.0 score is fairly useless anyway. Also with only 1200 dollars total credit limits, if you allow any balances to speak of to report, it will drag your score down a good bit, but you will get every point back once your utilization is low again. For highest score Utilization should be <9%, and <29% on any single card. With only 1200 in credit limits even 120 dollars reporting will put you over the 9% threshold. You also don't mention any installment loans, and an installment loan on the report will help a lot with your credit mix, but I am not suggesting you get one for just a credit score. There are some ways to get an installment loan and pay all of it off immediately except a small amount. That is done by some who are re-building to show both an installment account and low utilization on the installment loan which compares the original loan amount to the current balance. Check the re-builders portion of this site to get the details. Whatever you do, do not make any payment even 30 days late, because with such a thin file any late payments will be a score killer. In any case it will for sure take time to get a high score. Use the Credit education tab at the top of this page to learn what is, and is not, figured into a credit score. Right now AAoA, AoOA, Credit mix, are all likely affecting your score. Also inqueries and new accounts are as well, but only for about a year. Credit utilization only lowers your score while it is too high, and the history of utilization is not considered.

Re: How do I move up the credit card ladder?

CreditMagic7 — Fri, 24 May 2019 05:54:56 GMT

For some it's a slow climb. Was for me as well.

Adding a small installment loan a few times over at a local bank and paying it off contributed to that bank issuing a credit card offer from an affiliate of theirs.

It's a real grind and slow lowish progression BUT eventually you land that ONE really nice PRIME CARD that pulls you out of the dullness and into better forward results.

Works different for different people but i almost wonder if a chance at NFCU wouldn't help if even with a secured card. That CU is known to rapid path to better higher approvals once established.

Re: How do I move up the credit card ladder?

Anonymous — Fri, 24 May 2019 06:04:06 GMT

You’re 18, you’re going to have very limited success until you turn 21. The good news is that you are setting yourself up very well when you get to 21 and should have the mailbox chock full of offers after that.

Also get the Experian app and get a free Experian account and you’ll get your real Experian FICO as well as credit monitoring of your Experian report for free. It will blow your mind how inaccurate those other sites are.

I do second the credit union suggestion. If you have military affiliation in your family, sign up for NFCU ASAP. Otherwise you should check for some local CUs and compare them until you find one that seems to meet your needs. Credit unions can be a huge helping hand and a bit of a shortcut, especially ones that offer credit builder loans and share secured loans.

Re: How do I move up the credit card ladder?

sarge12 — Fri, 24 May 2019 06:12:13 GMT

@Anonymous wrote:
You’re 18, you’re going to have very limited success until you turn 21. The good news is that you are setting yourself up very well when you get to 21 and should have the mailbox chock full of offers after that.

Also get the Experian app and get a free Experian account and you’ll get your real Experian FICO as well as credit monitoring of your Experian report for free. It will blow your mind how inaccurate those other sites are.

I do second the credit union suggestion. If you have military affiliation in your family, sign up for NFCU ASAP. Otherwise you should check for some local CUs and compare them until you find one that seems to meet your needs. Credit unions can be a huge helping hand and a bit of a shortcut, especially ones that offer credit builder loans and share secured loans.

I am not sure at 18 years old, how new the OP is to credit, but a Fico score takes 6 months of data to even generate a fico score. If he has less than 6 months history experian will not be able to return a fico 08 score.

Re: How do I move up the credit card ladder?

Anonymous — Fri, 24 May 2019 06:21:41 GMT

@sarge12 wrote:
@Anonymous wrote:
You’re 18, you’re going to have very limited success until you turn 21. The good news is that you are setting yourself up very well when you get to 21 and should have the mailbox chock full of offers after that.

Also get the Experian app and get a free Experian account and you’ll get your real Experian FICO as well as credit monitoring of your Experian report for free. It will blow your mind how inaccurate those other sites are.

I do second the credit union suggestion. If you have military affiliation in your family, sign up for NFCU ASAP. Otherwise you should check for some local CUs and compare them until you find one that seems to meet your needs. Credit unions can be a huge helping hand and a bit of a shortcut, especially ones that offer credit builder loans and share secured loans.
I am not sure at 18 years old, how new the OP is to credit, but a Fico score takes 6 months of data to even generate a fico score. If he has less than 6 months history experian will not be able to return a fico 08 score.

True but since OP is tracking score changes with those other tools, if there isn’t a score now, there will be soon enough.

Re: How do I move up the credit card ladder?

AverageJoesCredit — Fri, 24 May 2019 12:07:37 GMT

One rung at a time

Re: How do I move up the credit card ladder?

Shaw83 — Fri, 24 May 2019 12:58:19 GMT

I agree get a small loan or better yet a self lender account. "Self lender" if never heard of it is an account that opens up X amount CD and you make payments towards it for a year and after the CD mature they'll send you the money.

Re: How do I move up the credit card ladder?

Anonymous — Fri, 24 May 2019 13:10:44 GMT

@jimmy2000 wrote:
Hi everyone, I have been browsing around as a non-member for awhile but I am very frustrated.

My credit score seems to be stuck around 660 (reported on CK and CreditWise) on both TU and Experian. How do I move up the credit card ladder and start seeing my score raise?

I'm 18, so my credit history is extremely limited, but I do have 2 cards that I use a lot.
I have a Barclay's Apple Rewards, $700 limit, and a Capital One Journey with a $500 limit (started at 300). I really have been eyeing the Costco Anywhere Visa, but I now I need a much higher score. My credit has not improved much at all from when I first started out with these 2 cards, so I'm not sure what I'm doing wrong. Any advice (besides waiting)?

Not really. Being patient and using your current cards is all that you're missing at the moment. You're not "stuck" at 660, as an 18 year old you literally just got credit. That's where you start. You're well ahead of the game by having two accounts.

After a year or so, you should be 700+. Setting good habits (paid on time, low utilization, avoiding impulse applications) now is much more important than rushing a 3rd account.

Re: How do I move up the credit card ladder?

sarge12 — Fri, 24 May 2019 15:52:43 GMT

@AverageJoesCredit wrote:
One rung at a time

True....there are not any shortcuts, but it is fairly easy to fall off the ladder trying to create one. Of course you do need to have all the rungs in the ladder...3 credit cards and an installment loan...to make the climb easier. Other than that it is just time and the "do not's"...do not make payments late, do not do something that might lead to CLD...etc.

Re: How do I move up the credit card ladder?

KJinNC — Fri, 24 May 2019 16:06:44 GMT

OP, I think you are doing the right stuff. I wish I had been as wise when I was 18. That said, think about the most successful middle-aged or older person you know and ask yourself, if you were a lender, who is the safer bet to repay money. That person or a very responsible 18-year-old. The credit scoring system deliberately does not change that rapidly in most cases. The exception would be if you remove negative stuff, but in terms of growth, it is set up to be gradual, because somebody being responsible for six months does tell you something, but somebody being responsible for years and decades tells you more. Long story short - you'll get there, I wouldn't worry about it too much as long as you make sure to pay your bills on time. It will come naturally, and, you're not in a bad situation now anyway. I am more than twice your age and am in a similar situation in some ways. JMO, and, good luck!

Re: How do I move up the credit card ladder?

sarge12 — Fri, 24 May 2019 23:15:54 GMT

@KJinNC wrote:
OP, I think you are doing the right stuff. I wish I had been as wise when I was 18. That said, think about the most successful middle-aged or older person you know and ask yourself, if you were a lender, who is the safer bet to repay money. That person or a very responsible 18-year-old. The credit scoring system deliberately does not change that rapidly in most cases. The exception would be if you remove negative stuff, but in terms of growth, it is set up to be gradual, because somebody being responsible for six months does tell you something, but somebody being responsible for years and decades tells you more. Long story short - you'll get there, I wouldn't worry about it too much as long as you make sure to pay your bills on time. It will come naturally, and, you're not in a bad situation now anyway. I am more than twice your age and am in a similar situation in some ways. JMO, and, good luck!

It does not increase rapidly, but decreases can be, and often are very rapidly done if late on payments, collections, BK, etc...If nothing major exists, then I agree the changes will be fairly gradual. In my experience the lowering of scores more than a few points are more often than not very rapid, and caused by a major negative credit event.

Re: How do I move up the credit card ladder?

sarge12 — Fri, 24 May 2019 23:46:05 GMT

I want to add to my previous post. About 10.5 months ago I had 3 inqueries and 3 new accounts. It caused my scores to drop maybe 20 points on some of the CRA's. One even dropped below 800, which had been the case for years that they were always over 800. I have almost gotten back to where I was before the inqueries and new accounts, almost 11 months later. So my point is score drops can and usually do occour rapidly, and depending on why it dropped, it can take months, or even years to recover those points. That is what you need to remember when handeling your credit accounts. If you are handeling credit properly, the increases will be gradual. A notable exception is the changes caused by utilization which can cause rapid declines, and equally rapid increases if you get your utilization back down. It is the one thing that carries no history, so if you lose 50 points because your cards are nearly maxed out, getting the utilization back below 9% will see every single point you lost back. Nearly maxed out cards could however prompt AA by the credit card issuer though. Now this is just my personal way of dealing with credit, so do not take the following as the only way to use cards. I personally always PIF every card every month, except 1 low interest card my sister uses and pays the card payments. I have not personally payed one cent in interest on a card in at least 15 years. Some with high score do carry a balance, so my way is not the only way, but I do believe it is the best way.

Re: How do I move up the credit card ladder?

CreditInspired — Sat, 25 May 2019 01:01:51 GMT

Hi OP and welcome to MyFICO

First, I want to say +100 on everything every posters said so I’m offering you one good point and ask you a question:

Let this phrase be a part of your repertoire — Creating a great credit profile is a marathon, not a sprint.

Can your parent(s) make you an AU on one of their “older” CCs that’s of course in good standing with low UT.

GL2U

Re: How do I move up the credit card ladder?

jimmy2000 — Tue, 11 Jun 2019 02:21:41 GMT

Thanks! I applied and was approved for $500 for a Macy's store card which I assume will just be a good 4th account to add to the mix. I also pulled my true FICO scores and now realize that Credit Karma is way off. For now I am just going to sit for a year or two, and become an authorized user on one of my dad's cards to help boost a little more.

Re: How do I move up the credit card ladder?

Anonymous — Tue, 11 Jun 2019 10:48:30 GMT

Welcome to the forums, OP!

As others have mentioned, it's likely your util that is keeping your score down. Just AZEO and make that one about $4 so it registers around 1%. The first FICO score I generated was around 700, so you're not far off. As AAoA increases and stabilizes with additional accounts, you'll see it grow. In the words of the famous AJC, one rung at a time!

Re: How do I move up the credit card ladder?

Anonymous — Tue, 11 Jun 2019 12:45:26 GMT

I'm going to go against the grain here with the installment loan. At this stage there is really no reason to get one unless you need it. I have no idea why people are suggesting you take on more debt and interest you don't need (yes, it can be small, but debt is debt). If you need a car, sure. If you have a large purchase, sure. Heck, I could even see it if you planned to buy a house in a few years, and you wanted that last little bump, but at 18 with under a year of credit experience, you will grow just fine without it for some time yet.

One thing that you can do, is if you have a family member with good credit, see if they have a card with low utilization that they can add you to as an authorized user. Even if you never have a card or use the account, just being on it can add substantially to your available credit, and help your overall utilization as well as other factors. It should go without saying that this should be a responsible individual that you trust.

You mentioned opening a new card. If you need it, great! If you don't need it, hold off some. Opening new cards will add a hard pull in many cases, and will decrease your average age. This will lower scores. It looks like, in the grand scheme of things, most of your cards are pretty new. As your accounts age and these impacts diminish, you will see some boost. Once you hit the 12 month mark with the oldest card, you will likely see a slight increase. Once your average hits 12 months, you'll probably see another.

Really it just comes down to patience.