topic Re: Will I be starting over? in Credit Cards

Will I be starting over?

Anonymous — Thu, 29 Aug 2019 01:39:45 GMT

First-time poster but long-time reader. Thanks for the wealth of info on this site.

In a nutshell: Mid-30s, 148k salary, longest credit card is 12yo, no derogatory info, 2-3 hard-pulls currently on my report (due to brokerage-account or mortgage-related pulls).

All this being said, I am going-through a divorce and ALL my credit cards are AMEX and as Authorized User with my ex. (My spouse was the breadwinner during grad school). My credit report showed some "starter-cards" solely in my name. As you can imagine, I will have to cancel the cards I am Authorized User on once the divorce is signed and finalized. This leaves me with literally no credit cards :/

I have studied in-depth what cards to get, and would love to hear your thoughts.
Here is my "wishlist":

a) Preferably with an online bank so I can both get credit cards and grow to do business with said-bank.

b) Rewards to encourage travel.

What I have found:

Capital One Venture (got the impression this is for "average credit", no?)
Citibank Prestige (not sure here given impending benefits getting canned).

Schwab Investor Card (is AMEX, so not sure it'd look good I cancelling so many cards and getting this one)

... am I missing something?

Any advice is always welcome.
Again, thank you for the wealth of info.

Re: Will I be starting over?

AllZero — Thu, 29 Aug 2019 02:08:43 GMT

What open credit cards do you currently have that you are the primary user?

There's a lot of options out there.

Since you are an authorized user with AmEx, I'm sure it would be easier to apply as a primary user. Have you tried the prequal site?

Re: Will I be starting over?

Medic981 — Thu, 29 Aug 2019 02:13:43 GMT

Welcome to the myFICO forums!

I may be way off in left field and I am sure someone more knowledgeable will come along to clarify.

Have you been paying on your AU account as if it was a separate account or did you pay the combined AmEx bill each month?

AmEx likes thin files. Perhaps you should try to open your own AmEx accounts now or call AmEx and see if you can convert your current AU account to be in your name. I have no idea if this is possible, but I would like to know if it is.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 02:15:08 GMT

Thanks @AllZero,

I have a sock-draw Capital One Platnium card and I believe an AMEX Blue Cash Everyday (the one with the large blue square).

If it is easier to apply as primary with AMEX, that's comforting. My concern was them seeing more closed account than open accounts, that's all.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 02:19:15 GMT

Thanks @Medic981,

Yes, the AU account is always $0. We have some lingering debts because of attorney fees, but we've agreed to make those $0 ASAP.

It's encouraging to think AMEX is open to convering Authorized User -> Primary. Hopefully that's the case.

Re: Will I be starting over?

Medic981 — Thu, 29 Aug 2019 02:21:47 GMT

Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.

Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from incurring a FICO scoring penalty.

An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into Self Lender or a Share Secured Loan at a Credit Union.

Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit.

Re: Will I be starting over?

AllZero — Thu, 29 Aug 2019 03:36:20 GMT

Being an authorized user will not impact you with the lender. You're only being removed from the account. Only the primary user can close it.

Do you know your FICO scores? If not, use creditchecktotal.com to see where you stand. It's $1. Cancel in 7 days or less to avoid the reoccurring charge.

You have a lot of choices: BofA, Chase, Wells Fargo, AmEx, Credit Unions, etc. Be selective and research what you want. Whichever suits your spend.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 02:26:31 GMT

no you aren't starting over, if you have a mortgage on your report it's going to stay there, also you do have a credit score. you won't become unscorable.

the AU cards are going to fall off instantly though, so it's better if you sign up for a new card or two before those get closed. your scores will drop somewhat when they are closed.

things you can do:

check your fico8 credit scores

see how many pulls you have at each CRA and how old they are

check for prequals at all the major card sites

if the bank you got your mortgage from offers a card, thats a good place to try

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 02:33:36 GMT

@AllZero,

Before all this mess, it was FICO=804. Now it took a hit because slowly we are closing credit cards, thus ~~lowering~~ increasing my utilization and decreasing age of credit. Now, it is FICO=740.

My eyes on Citibank, but am hearing about them canning much of their travel benefits.

Honestly, the choice of credit card is overwhelming... not sure if that's good or bad.

Re: Will I be starting over?

AllZero — Thu, 29 Aug 2019 02:42:15 GMT

@Anonymous wrote:
@AllZero,
Before all this mess, it was FICO=804. Now it took a hit because slowly we are closing credit cards, thus ~~lowering~~ increasing my utilization and decreasing age of credit. Now, it is FICO=740.
My eyes on Citibank, but am hearing about them canning much of their travel benefits.
Honestly, the choice of credit card is overwhelming... not sure if that's good or bad.

What is your reported % utilization? Before applying for credit, if possible, get to AZEO as Medic981 stated.

Chase has good travel card. They might do a double hard pull.

Capital One. You have an account with them. So it should be easy to apply. It'll be triple hard pull so think about it before you app. They have prequal site.

Citi has prequal site. Not sure on what the current benefits are.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 03:06:13 GMT

Current utilization is hovering in the high 20% (legal fees only) and we've agreed to zero this ASAP.

Other than that, I expect my utilization to stabilize around 5%-10%.

Went to the Citibank prequalification site; got a hit for the Citibank Rewards+. Not sure how accurate this page is; wouldn't mind the Premier or something with more bang-for-buck.

Had never heard of AZERO... this site never fails to impress.

Thank you @AllZero and @Medic981

Re: Will I be starting over?

AllZero — Thu, 29 Aug 2019 03:34:21 GMT

Going AZEO is "dressing" up your credit report. Optimizing it and squeezing out every last possible FICO point. Hopefully, offering you better rates and terms with the lender. Obviously, there's more to it than scores.

You have decent income. Your utilization is not horrible. Your only problem is to decide what card you want.

I'm not familiar with the Citi cards. Hopefully, more experienced members can advise.

Re: Will I be starting over?

SEAlifer — Thu, 29 Aug 2019 03:53:28 GMT

@Anonymous wrote:
Here is my "wishlist":
a) Preferably with an online bank so I can both get credit cards and grow to do business with said-bank.
b) Rewards to encourage travel.

a) So if you want an online bank, almost everything is online now so you're good on that no matter what you choose.

b) I would say pick whatever travel card you like the most but look out for a foreign transaction fee. Most travel cards don't have them but most non-travel cards do and it's usually around 3%. That could potentially eat up any cash back or points rewards you'd be gaining. Capital One's cards are all no-FTF. Then you just have to choose if you want to pay an annual fee, how much of a sign up bonus you want, etc.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 06:00:05 GMT

Check Chase prequal before you do anything else. Chase and Amex are widely regarded as the best travel card issuers but Chase is finicky with applications. You want them to be your first application.

Next I would look at AMEX. Since you already have Blue Cash EveryDay, log into your account and you can check and see if you’re prequalified to add additional products.

Citi prequal is said to be pretty solid so that may be an option for you too. Rewards+ isn’t a travel card though and it’s not really all that great unless you have a bunch of small charges to rack up points with.

If you do apply with Chase, don’t apply for more than one additional card for about 6 months. Chase doesn’t like excessive credit seeking and will close your accounts if you spook them.

I do like Capital One but I don’t personally see the value in Venture when compared to Chase, AMEX, or even Citi cards.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 09:40:37 GMT

I don’t think the OP has time to get to AZEO. With their SO closing cards and driving up utilization and the added cost of legal fees time is not on their side. Plus with a 740 that’s not necessary. They need to get their own cards ASAP while they are still benefiting from being an AU.

Go to the major bank sites and try all the prequalify links. But don’t accept any offers yet. When you’re done make a list of the cards you qualified for and then decide on 2-3 that you want/need. Then go back to the sites and accp those offers. Good luck.

https://www.chase.com/prequalified

https://www.americanexpress.com/us/credit-cards/check-for-offers/

https://www.citicards.com/cards/credit/application/flow.action?isInvitation=N

https://secure.bankofamerica.com/secure-offers/public/customizedOffers/?BCB

https://www.discovercard.com/application/fmo

*imho AZEO and installment loan tricks are overkill in this situation.

Re: Will I be starting over?

CreditInspired — Thu, 29 Aug 2019 11:46:24 GMT

@AllZero wrote:
Being an authorized user will not impact you with the lender. You're only being removed from the account. Only the primary user can close it.

Do you know your FICO scores? If not, use creditchecktotal.com to see where you stand. It's $1. Cancel in 7 days or less to avoid the reoccurring charge.

You have a lot of choices: BofA, Chase, Wells Fargo, AmEx, Credit Unions, etc. Be selective and research what you want. Whichever suits your spend.

+10

Re: Will I be starting over?

CreditInspired — Thu, 29 Aug 2019 11:49:39 GMT

@Anonymous wrote:
no you aren't starting over, if you have a mortgage on your report it's going to stay there, also you do have a credit score. you won't become unscorable.

the AU cards are going to fall off instantly though, so it's better if you sign up for a new card or two before those get closed. your scores will drop somewhat when they are closed.

things you can do:
check your fico8 credit scores
see how many pulls you have at each CRA and how old they are
check for prequals at all the major card sites
if the bank you got your mortgage from offers a card, thats a good place to try

^^^ this

Re: Will I be starting over?

CreditInspired — Thu, 29 Aug 2019 12:01:44 GMT

Hi OP and welcome to MyFICO

Honestly OP, I think you’re in great shape—way better than you think you are.

The good thing is in the credit world you’re not starting over. You have a card or 2, you have no derogs, you have a credit history. You’ve been given some great advice about first checking prequal sites for preapprovals. I agree that AmX is a good first because you already have one and it will be a SP.

GL2U. You’re on the right track.

Re: Will I be starting over?

Anonymous — Thu, 29 Aug 2019 13:57:14 GMT

Thank you to all - you continue to provide wealth of information.