topic Re: Building Credit in OverDrive!!!! in Credit Cards

Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 00:48:43 GMT

This post is for family friend of mine.

He is 25 with absolutley nothing on his credit report.

After I educated him about the importance on credit he has gone

into overdrive to build his credit. also he will be purchasing a house in a year or two.

Since last month he has now:

US bank Secured - 500cl

Cap 1 Secured - 200cl

USAA Secured - 500cl

Wells Fargo Sec - 300cl

BOA secured - 300cl

With only 1 inq on his report.

Basicallly all of his account are only 1 month old.

I told him at the 7 month mark. He should apply for a unsecured card.

Also said that maybe a secured installment loan would help him also.

What advice can i give him on his next move?
Will all these accounts hurt or help him since there all the same age?

Some of his cards are joint accnts with his wife is that the same as individual or does joint accounts not help as much?(they are not AU)

Also if he waits 1 year with these accounts, is it possible to move on to prime cards automatically?

Re: Building Credit in OverDrive!!!!

SnackTrader — Mon, 26 Nov 2012 00:52:39 GMT

The biggest piece of advice is NO APPS within 1 year of mortgage, longer if possible.

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 00:59:12 GMT

I'm sure it would be atleast 2 years before he applies for a mortagage.

He just wants to be prepared when time comes even if it 3 years from now i suppose.

I told him it makes a big diffrence payment wise if you get a lower APR

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 01:00:13 GMT

@Anonymous wrote:

With only 1 inq on his report.

Actually the accounts he opened cost him 7 inquiries total. You would have to look at each report to see which lender pulled which bureau.

garden for a year

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 01:03:19 GMT

@Anonymous wrote:
@Anonymous wrote:

With only 1 inq on his report.

Actually the accounts he opened cost him 7 inquiries total. You would have to look at each report to see which lender pulled which bureau.

garden for a year

Agree with the part about looking at each report to find out how many inqs are actually on his report.

But OP did state that some of his cards are joint account. Not sure how that plays into inqs.

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 01:07:42 GMT

He might of just pulled one report and saw one inq.

okay so basically garden for one year and then he can explore other

cards.

Inqs. dont affect your score after one year right? But aren't lenders able to see them for 2 years.

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 01:08:00 GMT

I'm not a fan of getting secured loans at all. IMO, I see no benefit for helping establish credit by getting a secured loan.

Now if your friend needs a loan for an actual reason like car repairs, medical bills, etc. Then a loan can be beneficial in not only helping out with finances but also building credit.

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 01:10:58 GMT

@Anonymous wrote:
This post is for family friend of mine.

He is 25 with absolutley nothing on his credit report.
After I educated him about the importance on credit he has gone
into overdrive to build his credit. also he will be purchasing a house in a year or two.

Since last month he has now:

US bank Secured - 500cl
Cap 1 Secured     - 200cl
USAA Secured     - 500cl
Wells Fargo Sec -   300cl
BOA secured      -   300cl

With only 1 inq on his report.

Basicallly all of his account are only 1 month old.

I told him at the 7 month mark. He should apply for a unsecured card.
Also said that maybe a secured installment loan would help him also.

What advice can i give him on his next move?
Will all these accounts hurt or help him since there all the same age?
Some of his cards are joint accnts with his wife is that the same as individual or does joint accounts not help as much?(they are not AU)
Also if he waits 1 year with these accounts, is it possible to move on to prime cards automatically?

Amazing number of secured cards. I would have suggested fewer with higher limits. I suggest that he might want to increase the deposits to better limits if he has the cash. If he is thinking of mortgage in a few years, I would wait until the mortgage deal is done before applying for anything else. Presumably some of these will convert to unsecured in the mean time.

Re: Building Credit in OverDrive!!!!

Anonymous — Mon, 26 Nov 2012 01:28:56 GMT

@Anonymous wrote:
This post is for family friend of mine.

US bank Secured - 500cl More then likely pulled EX if not its on EQ
Cap 1 Secured     - 200cl Pulled All 3
USAA Secured     - 500cl Pulled EQ
Wells Fargo Sec -   300cl Pulled EX
BOA secured      -   300cl Pulled EX

With only 1 inq on his report.

Re: Building Credit in OverDrive!!!!

nicholasyud — Mon, 26 Nov 2012 02:11:28 GMT

He should plan on card he want. what credit approved at, what database they pull, What reward he get in return.

Plan on 1 years then cut it down about 2 3 credit cards. It's should be good enough but garden for 1 year at least.

Re: Building Credit in OverDrive!!!!

navigatethis12 — Mon, 26 Nov 2012 02:17:19 GMT

I have never had a loan and have very nice cards (in my opinion), so do not get the secured loan. It's too late now, but I don't think he should have gotten so many secured cards. They tie up money and are useless in my opinion. If he shops at any stores, he could have/can apply for one and may get approved. I got approved with no history and now the limit is much higher than it was, only after two years.

If I understand correctly, joint is the same as individual. With a joint account, you are responsible for the charges, unlike an authorised user account.

You should probably just wait a whole year to get another card. Six months is the standard, but his file will look nicer if it is one year old, rather than six months.

Re: Building Credit in OverDrive!!!!

distantarray — Mon, 26 Nov 2012 09:04:59 GMT

I agree on too many secured cards, I would've gone for 2-3 max with higher limits. and would've put DCU digital credit union in there since you get a 100% free monthly fico 04 scores each month and the bank is amazing to grow with. They offer great mortgage loans and car loans which can save you 1 month of payments each year (by taking payments weekly, since interest is based off daily it saves you a lot) you can also opt for the monthly program as well.

Re: Building Credit in OverDrive!!!!

Jutz — Mon, 26 Nov 2012 14:13:47 GMT

@distantarray wrote:
I agree on too many secured cards, I would've gone for 2-3 max with higher limits. and would've put DCU digital credit union in there since you get a 100% free monthly fico 04 scores each month and the bank is amazing to grow with. They offer great mortgage loans and car loans which can save you 1 month of payments each year (by taking payments weekly, since interest is based off daily it saves you a lot) you can also opt for the monthly program as well.

sidebar: Distant you have DCU? Do you think you can share a bit more about your experience with them? I made a thread for it a bit ago and didn't get a response. I don't want to muck up this thread with it.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/DCU-for-Banking-etc/m-p/1710874#M218968

Re: Building Credit in OverDrive!!!!

jamesdwi — Mon, 26 Nov 2012 15:05:36 GMT

within 3 months he will start recieving pre-approvals for cards. At 6 months he should be getting prime pre-approvals, don't try for any AMEX revolvers, probably won't accept you with less than 9-12 months of history. But should be able to get Citi or Chase cards at 6 months. My son started getting pre-approvals after I made him AU on a couple cards of mine that have 1 and 3 year clean historys, Recv'd pre-selected for CapOne unsecured got a $500 CL card, 2 months later got pre-selected for Discover, App'd for and got Discover card with a 750 CL, shredded the pre-selected offer for citibank he had nothing on his report except the two AU cards.

Your friend should be doing fine in a few months with all those tradelines. He will start out with small CL's for a while. As he gets unsecured cards and has passed the 6 months of credit experience he can reduced the number of secured cards and combine the funds to make 2 or 3 higher CL secured cards that may help build CL's long term. With good income he may even get some decent CL's on unsecured once he has 6 months of history.

Re: Building Credit in OverDrive!!!!

StartingOver10 — Mon, 26 Nov 2012 17:41:48 GMT

@SnackTrader wrote:
The biggest piece of advice is NO APPS within 1 year of mortgage, longer if possible.

^^^No, this is not accurate. It is advisable, but not required, to not have apps within 6 months to allow your score to recover from the small ding of the inquiry. But really, the underwriter won't think a thing about it unless it is a new tradeline just before applying for your mortgage (month or two). If your underwriter gave you a tough time because you applied for cc's a year prior to applying for the mortgage, they may have seen something else in your file. I have never seen an underwriter turn down a file for new tradelines UNLESS those tradelines impacted DTI.

Re: Building Credit in OverDrive!!!!

distantarray — Mon, 26 Nov 2012 17:52:12 GMT

@StartingOver10 wrote:
@SnackTrader wrote:
The biggest piece of advice is NO APPS within 1 year of mortgage, longer if possible.
^^^No, this is not accurate. It is advisable, but not required, to not have apps within 6 months to allow your score to recover from the small ding of the inquiry. But really, the underwriter won't think a thing about it unless it is a new tradeline just before applying for your mortgage (month or two). If your underwriter gave you a tough time because you applied for cc's a year prior to applying for the mortgage, they may have seen something else in your file. I have never seen an underwriter turn down a file for new tradelines UNLESS those tradelines impacted DTI.

agreed as long as it's not 1-2 months before a mortgage but it shouldn't matter since all they look at is your scores primarily and i've been in the market for a house over a year, if they give you a hardtime just take your business elsewhere imo. with my credit unions they all said i qualify for A+tier on loans with 720+ so that's not really n issue. only time you should refrain is if your in the borderline of a tier like if your at 722 and 1 app could take you to 719 where you would no longer qualify for the best loans or if your at a 642 etc cause FHA requires a 640 in most cases

Re: Building Credit in OverDrive!!!!

nuggets321 — Mon, 26 Nov 2012 19:01:18 GMT

looks like he is off to a really good start... my 2 cents is taht he stop applying, hes got anough working, now its time to let the account "age" with solid payment histories. Racking up a bunch of new accounts makes lenders EXTREMELY nervous and can be the basis for countless future rejections... its a marathon not a sprint