topic Re: What should be my next steps? in Credit Cards

What should be my next steps?

Anonymous — Sat, 17 Aug 2013 21:13:18 GMT

Hi everyone,

I've been reading this forum for more than a year and it's full of useful informations. I now need your help to continue building a good credit score.

My Background:

- Arrived in the US in February 2012, I opened a bank account with Chase.

(Then I learned the hard way that credit score and credit history are something really really important for EVERYTHING.)

- Applied for a Chase Freedom in July 2012, was declined because of No Credit history but I called the backdoor number and was approved for $600 CL.

- I was still using my debit card a lot so in January 2013 I applied for an Amex Charge (Gold) and was instantly approved.

- "Pissed" because I miss a huge deal because of my low CL, I called Chase in July 2013 for a CLI, Asked $5000 and was instantly approved.

My Goal:

Be in the 750+ range in 2 years with no Hard Inquiries on file (Mortgage!!!!!)

My Current Score:

I can't give you my real FICO Score, I tried to purchase it, received an email that my identity couldnt be verified, called the number and they told me that my Social Security has to be for at least 2 years on the credit bureau files in order to buy a Fico Score. (I tried to buy Equifax).

My score on Credit Karma (for what it is worth) is 722

And my "Vantage Score" is 769

Hard Inquiries:

All bureaus have 3 inquiries (Amex, Chase, Appartment, Verizon).

Verizon was september 2012

Amex January 2013

Apartment April 2013

Chase July 2013

Payment habits

Usually I PIF my Chase Card before it reports, so usually it reports 0, or a very low ammount (this month it reported $21)

For my Amex Gold, when I receive the statement notification that my payment is due in 2 weeks I go to the website and pay it in full. But I noticed that it always reported my "statement balance" even if I paid WAY before the limit date.

Do I need to change the way I manage my payments in order to improve my score?

Also I wanted to apply for at least one other credit card (maybe 2?), to have another account on file and hopefully a CL of 10K or more. It will hurt my score right now (Average Age + HP) but from what I understand it'll pay off in the future.

Which Credit Card should I apply for?

The one I found interesting right now is the Sapphire Preffered, but I don't know if I can qualify for it with a short credit history. (And also is it safe to put "all my eggs in the same basket" with Chase?). My salary is 130K+.

Or should I just wait to receive interesting offers by mail (but due to my very short credit history, I'm not sure I will receive good offers via mail)?

Thanks for reading my post and thanks for all your advices.

A foreigner totally lost in the credit system

Re: What should be my next steps?

Anonymous — Sat, 17 Aug 2013 21:27:03 GMT

I am not so sure it is your SSN that needs to be on file for 2 years, though I have heard that from others.

In order to receive a FICO score there are minimum requirements:

At least one account that has been open for six months or more
At least one undisputed account that has been reported to the credit bureau with in the past six months
No indication of deceased on the credit report (Please note: if you share an account with another person this may affect you if the other account holder is reported deceased).

Re: What should be my next steps?

Anonymous — Sat, 17 Aug 2013 21:32:15 GMT

Thanks Guiness56,

I had to dispute with all of the bureaus because they had a wrong date of birth on file.

I'm from France and on my passport my DOB is with the following format DD/MM/YYYY

When Chase opened my account, they put DD as Month and MM as Day.

So when my Chase card first reported, the wrong DOB was sent.

Maybe that's why I'm unable to pull my FICO. (I fixed Equifax a month ago, it was the last one)

Re: What should be my next steps?

Anonymous — Sat, 17 Aug 2013 21:44:34 GMT

I think you're all set for the CSP.

Btw are you Jerome from Vine?

Re: What should be my next steps?

09Lexie — Sat, 17 Aug 2013 21:47:34 GMT

Welcome to the forum! I'd say your dispute is causing the cr score issue. Once that's resolved you should be fine. As far as which cards to apply for what are you looking for? Travel, dining, cashback?

Re: What should be my next steps?

Anonymous — Sat, 17 Aug 2013 21:57:22 GMT

@Laugh, No. even I'd love working there

@Lexie I don't have an usage to a specific kind of rewards.

I was thinking about the CSP because of the Sign-In Bonus + No-Foreign fees when I go back in France.

I was also thinking about the Amex Blue (to still earn Membership Rewards, and backdating) and upgrade my Gold to Gold PR while negociating a MR bonus. (specially since the Chase Freedom is giving more advantage starting November 1st).

For those who don't know: Chase Freedom Visa (non signature) will have starting Nov 1st,

Auto Rental Collision Damage Waiver

Purchase Protection

Extended Warranty

Clearly declaring a war to Amex

Re: What should be my next steps?

RandomCreditDude — Sat, 17 Aug 2013 22:10:24 GMT

Hey Jerome,

You and I have very similar stories. I came to the US three years ago, didn't know anything about how the system works, and I'm up to a 723 (EX) score right now. I know my real score because I got a car loan, and they reported my real score, not a FAKO. And it wasn't an auto score; this is from a letter from BoFA. And that's with me only getting a credit card a year after I came. So it's definitely possible.

I had the exact same SSN issue. My two years is up this month, so I'm going to try and buy a score in Sep. I'll update if I can get it.

My current cards are Amex BCP, Discover IT, Amex Gold, BoFA Visa Signature & Chase Freedom. Limits range from 3000 (BCP) to 9500 (Discover). I also get many offers in the mail for prime cards.

I think the real trick to getting higher scores for people like us is getting lots of credit (and not using any of it, or only using 2-4%). The hard enquires matter, but not so much as getting more credit. My score was in the 650-680 range with one card, but when I got the others and moved to a total credit line of 20k+ (from 3k), suddenly everything shot up. It also helps that I have had a car loan that I paid off, and just got another at a great interest rate.

So yeah, always always always pay on time, PIF before the reporting date, and get more cards. Wait a year with your first card though, since that makes a difference. The Discover IT is a good card to get too, and they will probably give you a high limit.

I'm going to get the CSP in Feb '14 as well. So yeah, we're on similar tracks there.

Re: What should be my next steps?

09Lexie — Sat, 17 Aug 2013 22:56:31 GMT

I would definitely PC your Gold to PRG. The CSP is a good choice based on your travel and Freedom combo.

Re: What should be my next steps?

Anonymous — Sat, 17 Aug 2013 23:58:43 GMT

Thanks for your advices!

I have made up a few options possible

1) I wait until January to apply for a Credit Card with Amex (to maximise backdating) probably the BCP and charge all my groceries on it (so it really pays itself and even the Gold/PRG card). At the same time, get my Gold updgrade to PR if I can get a MR bonus. 3 months later, I request the infamous x3 CLI. Then in July I apply for the CSP, 2 year history with Chase, the BCP should have a CL around 10k after CLI. This shouldn't be a problem to get approved and with comfortable credit limit, even with a short history.

2) I apply for the CSP in october (so there is 3 months between the CLI of my Freedom and this application) and in january same scenario as above with Amex.

3) I forgot about the CSP and only get Amex in January.

Pros / Cons

Option 1:

+ Best chance of approvals and get higher credit limit (to my understanding based on my readings)

- AAoA will be greatly reduced when I get the CSP

- HP will still appears in late 2015 (Mortgage target rate)

Option 2:

+ Reduce the "cons" of Option 1 (AAoA will be less impacted, and HP will be gone by late 2015)

- Less chance of Approval (or with a really lower limit) for the CSP.

Option 3:

+ Reduce "cons" of 1 & 2

- Less Credit available, probably the worst option actually.

What do you guys think?

Re: What should be my next steps?

RandomCreditDude — Sun, 18 Aug 2013 00:51:47 GMT

I would do option one, and also apply for the CSP at that time. After one year of solid history and a high income, you ought to have no problem getting both the Amex and the CSP with a high limit.

regarding the hard limits for your mortgage: Don't hold me to this, but I believe that having 3-4 HP that are over a year old on your record will not affect it TOO much. The algorithm applies aging, based on what I've read, so old HPs are given less weightage as they age. If you have great income, a solid payment history, and tons of credit (50K+), one extra HP is unlikely to affect you too much.

Re: What should be my next steps?

Anonymous — Sun, 18 Aug 2013 06:01:04 GMT

Thanks a lot!

I thought it would have been better for Chase to see another card with a "high" CL in order to get a "high" CL on the CSP. But with your suggestion this will the impact on my AAoA, as only the CSP will report as a new acount (for AAoA purpose).

You're probably right for the Hard Inquiry, I have the impression that the past 6 months have a "huge influence", then the past year, and when it's between one and two year it still counts but almost for nothing.

Re: What should be my next steps?

Anonymous — Sun, 18 Aug 2013 06:11:59 GMT

@Anonymous wrote:
Thanks a lot!

I thought it would have been better for Chase to see another card with a "high" CL in order to get a "high" CL on the CSP. But with your suggestion this will the impact on my AAoA, as only the CSP will report as a new acount (for AAoA purpose).

You're probably right for the Hard Inquiry, I have the impression that the past 6 months have a "huge influence", then the past year, and when it's between one and two year it still counts but almost for nothing.

On HP: what is "public" is that the FICO *score* isn't impacted by HPs older than a year, and that the impact is reduced during that year (though exactly how and when it declines isn't public). But 6 months seems to match many people's experience.

Then the HP stays on the record for two years, so it is available for a lender to see. Many apparently don't really bother with older ones, and many ignore those older than 6 months. But you could of course run into a lender who does care!

When I recently refinanced, I had a new inquiry from about 6 weeks earlier for a new card. I just had to write a statement, stating whether I had received a new line of credit from the Inquiry, and if so how much and what conditions. and why I applied. I think the new potential minimum payment was then added in to the DTI ratio, but there were no problems. But others have reported more lender pushback.

Re: What should be my next steps?

Anonymous — Sun, 19 Jan 2014 20:08:21 GMT

I wanted to bump this thread and thanks all the person that helped me.

I went with my "option 1" and I'm actually not sure I'll go for the CSP (yet).

My Amex Gold card just turned one year, I called the cancelation departement, and manage to get a 25000 MR points to upgrade to the PRG (Exactly what I wanted!)

A few months ago I thought about the BCP but as I travel delta more and more I finally went for the Delta Gold (the baggage fees waived will pay for the AF in only 2 trips). I was instantly approved with $7000 credit line. (my Freedom has a 5000 credit line). So in two months I can apply for a 20K+ credit limit!!

In the approval notice of Amex, my FICO Score was included : 725 on Experian.

(For information my Credit Karma FAKO was 729 that day, Vantage Score 777)

The letter also stated what was bad on my report:

- Length of time accounts have been established. (my oldest credit line is 1.5 years old)
- Lack of recent installment loan information.

- Too few accounts currently paid as agreed.

- No recent revolving balances.

- Too many inquiries in the last 12 months. (Weird cause the last Inquiry on Experian was on January 14, 2013. I have a free credit report on EXP I'll look at it to see if everything's ok)

Thanks again everybody.