topic Re: Adding a Card = +70 points to FIC0 -- CC Recommendations? in Understanding FICO® Scoring

Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sat, 02 Jun 2018 14:32:00 GMT

I have a 648 Score. Adding a CC will potentially add 70 points to my FICO, bringing it to 718 (Fico 8). I don't have any regular CC except Kohl's Department Card which I opened in 2015 with one 30 late noticed (I'll call them to remove this).

I have 4 private student loans, 70k owed, Weighted average 7.8% Interest. I need to refinance this but hesitant as it might lower my mortgage score - My priority is to refinance on an investment property soon (getting out of a hard money loan at 12% within a year.

I have 3 120 late notices in 2012 on loan on a loan provider CES, who hence sold to my current one Reliamax. This might be a mixup with deferment. As I was attending, it should have been deferred.

That's my situation in highlight. Based on the above, which credit card should I try to get? Any? I don't want whatever company to damage my score with bad management practices. I've hear Capital One does this.

A CC that could somehow help me get refinance on a previous loan through a local credit union bank would be ideal if such a thing exist. Should I actually get a card from one of the prospective banks I'm considering to get a refinanced loan from?

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sat, 02 Jun 2018 14:36:44 GMT

I'm assuming you're basing this increase on what you saw on a simulator. How many cards do you have? (And which ones?)

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sat, 02 Jun 2018 15:08:33 GMT

Hi. Well, I did cover that in my original post. To be clear, I don't have any credit cards at all.

I have a single Kohl's card with a 300 dollar limit. Balance is 140$. (Will pay this off within a week all at once and never go above 30 dollars in the future - 10% of max)

70 points increase is coming from myFICO estimator.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

pipeguy — Sun, 03 Jun 2018 01:50:04 GMT

@Anonymous wrote:
I have a 648 Score. Adding a CC will potentially add 70 points to my FICO, bringing it to 718 (Fico 8). I don't have any regular CC except Kohl's Department Card which I opened in 2015 with one 30 late noticed (I'll call them to remove this).

I have 4 private student loans, 70k owed, Weighted average 7.8% Interest. I need to refinance this but hesitant as it might lower my mortgage score - My priority is to refinance on an investment property soon (getting out of a hard money loan at 12% within a year.

I have 3 120 late notices in 2012 on loan on a loan provider CES, who hence sold to my current one Reliamax. This might be a mixup with deferment. As I was attending, it should have been deferred.

That's my situation in highlight. Based on the above, which credit card should I try to get? Any? I don't want whatever company to damage my score with bad management practices. I've hear Capital One does this.

A CC that could somehow help me get refinance on a previous loan through a local credit union bank would be ideal if such a thing exist. Should I actually get a card from one of the prospective banks I'm considering to get a refinanced loan from?

Wow that's a lot of subjects for one post, one bank card will not be "financial planning" all rolled into one.

The Kohls store card is a credit card, it's not a "bank card" but its a start. The best or at least the easiest multi-use cards to get, staying away from the sub-prime actors (CreditOne, First Premier, et al) are Capital One and Discover - both offer secured versions if you don't qualify for the unsecured cards. You are starting from scratch so you need to look forward a year or two in establishing credit - note that I doubt you'll see a 70 point bump right away by just opening one or two basic cards.

Your recorded lates (derogs) are not going to help you and they don't just disappear by asking for them to be removed. The late on Kohls is one thing to work on, the 3X student loan lates are a whole different project. Each of these issues needs to be addressed and I doubt you are going to get major investment loans - mortgage or otherwise, with 4 derogs and no real credit history.

You can build a relationship with a lender of years where the bank/credit union may favor your credit business but this is a slow process and you are at the very beginning of establishing credit - while you have not provided that many details, it looks like you have experienced a "default" of sorts on 100% of your credit extensions, that being Kohls and your Student loans - something (late payments) that must be avoided at all costs.

I know you are looking forward but you have a lot of work to do, step by step address your current issues and then go after your future financial investment aspirations.

As far as establishing a bank card or two, Capital One and/or Discover would be my suggestion, and the secured version if that is all you can get at this point. Good luck!

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sat, 02 Jun 2018 16:13:25 GMT

@Pipeguy

one bank card will not be "financial planning" all rolled into one

Okay. So, going to my local credit union bank and asking for a credit card will not help in the least if I want to come back to them and ask for a refinance out of a hard money loan, this right?

The Kohls store card is a credit card, it's not a "bank card" but its a start.

Yes, are all credit cards bank cards then? Do local banks have credit cards?

The best or at least easiest multi-use cards to get, staying away from the sub-prime actors (CreditOne, First Premier, et al) are Capital One and Discover - both offer secured versions if you don't qualify for the unsecured cards.

Should I try to get the highest line of credit I can?

You are starting from scratch so you need to look forward a year or two in establishing credit - note that I doubt you'll see a 70 point bump right away by just opening one or two basic cards.

I have about 11 years of credit history, student loans going back 11 years, so I assume you mean I need to build up credit history for the credit cards, this right?

If that is true, I can do a partnership in the LLC and have someone with solid credit with my on title to get approved for refinancing, but I need to avoid this if necessary. I will already have the assett acquired with a hard money loan with a tenant renting it out, accruing cash flow rent payments. I'm hoping refinancing out of a property I already own title too might be easier than getting the major mortgage loan to begin with (in fact, I probably won't even try but go directly with an easier to get but higher interest hard money loan or unrecursive loan).

The Student Loan Derogs, I'm hoping are actually a mix up when I was deferring payments for a few semesters when I went to school. If so, and they remove them, I assume my credit will improve, correct? It occured in 2012, worst case, would it clear up sometime next year in 2019?

I'd be happy to share any other details. Please, let me know which ones might help paint a clearer picture I will do the best as I can to improve credit and bank relations, one step at a time.

May I ask you to explain wat you mean by default of sorts on 100% my credit extensions? I did max at the kohls card recently, 314 dollars, but not sure how this is related to the student loans.

I know you are looking forward but you have a lot of work to do, step by step address your current issues and then go after your future financial investment aspirations. As far as establishing a bank card or two, Capital One and/or Discover would be my suggestion, and the secured version if that is all you can get at this point. Good luck!

Thanks so much, I appreciate your help and support. I will look into discover, might stay away from capital one because I heard its easy to get 30 day late notices due to how they report the credits amounts.

Cheers.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

pipeguy — Sun, 03 Jun 2018 03:17:02 GMT

@Anonymous wrote:
@pipeguy

one bank card will not be "financial planning" all rolled into one

Okay. So, going to my local credit union bank and asking for a credit card will not help in the least if I want to come back to them and ask for a refinance out of a hard money loan, this right?
Establishing a relationship with a credit union, be that a deposit account or a credit card if they approve you helps create a track record so yes it will help, and if they issue you a credit card that will help your over all credit profile - if you honor the terms of the agreement meaning never miss a payment always pay on time, and pay more than the minimum required without using too much of your credit limit. Having a credit card with any lender is not in as of itsself going to get you a mortgage.

The Kohls store card is a credit card, it's not a "bank card" but its a start.

Yes, are all credit cards bank cards then? Do local banks have credit cards?

A "bank card" is a MasterCard, a Visa, an American Express and/or a Discover which can be used in just about any purchase situation. A store card is limited to that store, such as Kohl's can ONLY be used at Kohl's. A co-branded bank card is say Amazon Visa by Chase or a Costco Visa by Citibank or an "Old Navy Visa" which can be used outside of just Old Navy.

The best or at least easiest multi-use cards to get, staying away from the sub-prime actors (CreditOne, First Premier, et al) are Capital One and Discover - both offer secured versions if you don't qualify for the unsecured cards.

Should I try to get the highest line of credit I can?

You can "try" but if someone issues you your first bank card expect a low limit typically $300 to $500. Secured card limits are generally dependant on the amount of your secutity deposit - you'll get a higher limit if you put $1000+ as the security deposit than if you put $200.

You are starting from scratch so you need to look forward a year or two in establishing credit - note that I doubt you'll see a 70 point bump right away by just opening one or two basic cards.

I have about 11 years of credit history, student loans going back 11 years, so I assume you mean I need to build up credit history for the credit cards, this right?

A "whole" credit report includes 3+ credit cards with more weight going to bank cards, plus at least one installment loan (auto loan, furniture loan, etc) and if possible a mortgage. Student loan kind of fall in the installment area, but with 4 late payments on those that's not going to help. If the lates are in error, you need to address that.

Your recorded lates (derogs) are not going to help you and they don't just disappear by asking for them to be removed. The late on Kohls is one thing to work on, the 3X student loan lates are a whole different project. Each of these issues needs to be addressed and I doubt you are going to get major investment loans - mortgage or otherwise, with 4 derogs and no real credit history.

If that is true, I can do a partnership in the LLC and have someone with solid credit with my on title to get approved for refinancing, but I need to avoid this if necessary. I will already have the assett acquired with a hard money loan with a tenant renting it out, accruing cash flow rent payments. I'm hoping refinancing out of a property I already own title too might be easier than getting the major mortgage loan to begin with (in fact, I probably won't even try but go directly with an easier to get but higher interest hard money loan or unrecursive loan).

Business credit issue which many mix up with their personal credit. If you have a good amount of equity in a business asset, especially real estate that gives you options because the lender is protected, but this can be complex and I'm not going to advise you on business credit.

The Student Loan Derogs, I'm hoping are actually a mix up when I was deferring payments for a few semesters when I went to school. If so, and they remove them, I assume my credit will improve, correct? It occured in 2012, worst case, would it clear up sometime next year in 2019?

Perhaps they will fall off 7+ years from their occurance, unless they are being reported as continued late, then its not going to drop off until you either correct the "error" of pay them off.

You can build a relationship with a lender of years where the bank/credit union may favor your credit business but this is a slow process and you are at the very beginning of establishing credit - while you have not provided that many details, it looks like you have experienced a "default" of sorts on 100% of your credit extensions, that being Kohls and your Student loans - something (late payments) that must be avoided at all costs.

I'd be happy to share any other details. Please, let me know which ones might help paint a clearer picture I will do the best as I can to improve credit and bank relations, one step at a time.

May I ask you to explain wat you mean by default of sorts on 100% my credit extensions? I did max at the kohls card recently, 314 dollars, but not sure how this is related to the student loans.

You said you have a Kohl's card with a recorded late payment (default aka derogatory mark, I didn't mean it went into collection), you also said you have student loans with 4 "derogs" and NO other credit which means you have derogatory marks (aka agreement default occurance) on both of your accounts.

I know you are looking forward but you have a lot of work to do, step by step address your current issues and then go after your future financial investment aspirations. As far as establishing a bank card or two, Capital One and/or Discover would be my suggestion, and the secured version if that is all you can get at this point. Good luck!

Thanks so much, I appreciate your help and support. I will look into discover, might stay away from capital one because I heard its easy to get 30 day late notices due to how they report the credits amounts.

No lender can report to the credit reporting agencies a "late" unless a payment is late, meaning 30 days past due, I don't have any allegence to Capital One but they are no different than any other lender for credit history reporting. If your statement payment date is June 5th and you miss that payment, you'll have until you next statement to pay it (before the july payment date) with a missed payment $$ penalty and possible a "default" APR increase, but it won't be reported to the CRA's until it's 30 days late.

Cheers.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sun, 03 Jun 2018 04:08:30 GMT

" You will never gain 70 plus points on your score just by opening a new CC , it just doesn't work that way ... "

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sun, 03 Jun 2018 10:55:14 GMT

https://www.imageupload.co.uk/image/EGu7

Tell that to myfico Can you tell me why this is true and how many points would be normal?

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

UncleB — Sun, 03 Jun 2018 11:00:41 GMT

@Anonymous wrote:
https://www.imageupload.co.uk/image/EGu7

Tell that to myfico Can you tell me why this is true and how many points would be normal?

Moving thread to 'Understanding FICO Scoring' to get you more feedback on your FICO question...

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

SouthJamaica — Sun, 03 Jun 2018 11:12:22 GMT

@Anonymous wrote:
I have a 648 Score. Adding a CC will potentially add 70 points to my FICO, bringing it to 718 (Fico 8). I don't have any regular CC except Kohl's Department Card which I opened in 2015 with one 30 late noticed (I'll call them to remove this).

I have 4 private student loans, 70k owed, Weighted average 7.8% Interest. I need to refinance this but hesitant as it might lower my mortgage score - My priority is to refinance on an investment property soon (getting out of a hard money loan at 12% within a year.

I have 3 120 late notices in 2012 on loan on a loan provider CES, who hence sold to my current one Reliamax. This might be a mixup with deferment. As I was attending, it should have been deferred.

That's my situation in highlight. Based on the above, which credit card should I try to get? Any? I don't want whatever company to damage my score with bad management practices. I've hear Capital One does this.

A CC that could somehow help me get refinance on a previous loan through a local credit union bank would be ideal if such a thing exist. Should I actually get a card from one of the prospective banks I'm considering to get a refinanced loan from?

1. Adding a card will not add 70 points to your score. It may not add any points to your score. Simulators are not reliable.

2. In my opinion you should join a credit union and try to get a platinum Visa or Mastercard from the credit union.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Sun, 03 Jun 2018 11:41:41 GMT

@SouthJamaica

Considering I don't have any bank credit cards, only a kohls department store one, would you still recommend I open up a credit card soon anyway to vary my credit? 70 points actually does sound to good to be true, even from someone just starting to research credit, but is getting a CC more likely or less likely to improve my situation now or in the future.

I'm sure "it depends". I might just have to take a chance - risk 5 points hard inquiry to gain, hopefully, 20 points (this will bring my FICO score to "good").

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

NRB525 — Sun, 03 Jun 2018 14:14:50 GMT

Welcome to the forums. You are getting good advice here, but there is a lot of terminology that we use, it seems that is part of your learning curve.

The 120-day and 30-day lates, are baddies. Getting these removed ( as noted a project by itself ) is the way to improve your scores.

Capital One is an excellent place to start. They might want to get you a secured card, but for many members here, it was the first rung on their credit rebuild. You will see a lot of disappointment from some members when Capital One “fails to grow with me” but it is a good start.

Do not confuse Capital One ( good ) with Credit One ( high fees ). Credit One has a place, and many other members got their start with Credit One, fees and all. Sometimes you have to pay for access to credit, and Credit One is not a bad option for a time. Pay to play, get credit history.

If you have not made your investment property purchase yet, it might be good to go sit down with a lender, tell them the outline ( including lates ) of your credit situation and ask if it seems likely you can refi later. Advice on MyFICO is well meaning, but we will never be able to approve your credit card app, nor refinance your property.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

SouthJamaica — Sun, 03 Jun 2018 14:50:34 GMT

@Anonymous wrote:
@SouthJamaica

Considering I don't have any bank credit cards, only a kohls department store one, would you still recommend I open up a credit card soon anyway to vary my credit? 70 points actually does sound to good to be true, even from someone just starting to research credit, but is getting a CC more likely or less likely to improve my situation now or in the future.

I'm sure "it depends". I might just have to take a chance - risk 5 points hard inquiry to gain, hopefully, 20 points (this will bring my FICO score to "good").

I don't think getting a credit card will help your credit scores significantly in the short run but in the long run having a bank or credit card probably will.

I suggest a credit union because:

(a) it's the best place to get good terms on all of your other credit needs and

(b) by getting a credit union platinum card you can get a credit card with no annual fee, no balance transfer fees, no cash advance fees, and modest interest rates on everything (examples: Unify FCU, PenFed, NFCU, Langley, Vantage West).... that will be much more useful and versatile for you than a card which is good for nothing except buying stuff

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Mon, 04 Jun 2018 02:43:27 GMT

@NRB525

Thanks for the welcome.

On Monday, first thing I'm going to do is called the loan provider. I looked closer and its showing 3 (90 days) and 7 (120 days) lates! This is good, while clearly a major problem! I'm confident there is actually a mistake. I will call my university on Monday, have them print out a proove enrollment for each semester and then cross reference with the lates. I'd hedge my bets that the lates will coincide with the deferments. Hopefully, this can be cleared up easily.

Unless, all deferred payments show up as lates? If this is normal there may be no other course than to wait until they expire.

I haven't yet. I'm still in the early stages of setting up my business. I have my website done and I'm building my team now, while I work on getting my financing in 'order', as best it can be now, and certainly for the future. Which financing method I use is contigent upon my investment exit strategy. Luckily, there are many creative ways to finance and structure deals without banks. Some strategies I'd like to use soon though would require refinancing within 12-18 months. If I can do this myself. That would be ideal. If I can't refinance, it will cost me 20-25% partnership in an LLC (the minimum a bank requires to approve partnership). Of course, I could sell this share at a discount rate of 15%, but should be avoided if necessary, of course.

The more I read on the subject however, the more I'm thinking it might not be too big an obstacle. If there is a lot of equity going into the deal one day 1, atleast 30%, and it is producing cash flow with a tenant buyer who themselves are in the process of qualifying for a mortgage, atleast some banks will refinance on strength of the deal itself, possibly overlooking any credit or income disparities. -- Possibly is the operating word. If anyone is confident this is not true, please correct me.

Thanks for taking the time to respond. I appreciate your kind attention and excellent advice about speaking with my bank about my situation. I think I will do just that!

Cheers

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Mon, 04 Jun 2018 02:58:17 GMT

@SouthJamaica

Very interesting suggestion. I'll probably stop by all of the local credit unions. For real estate investing, their loans are highly valued.

Is this an example of what you mean when you say other forms of credit, aside from buying everyday items?

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

HeavenOhio — Mon, 04 Jun 2018 08:08:32 GMT

@NRB525 wrote:
Do not confuse Capital One ( good ) with Credit One ( high fees ). Credit One has a place, and many other members got their start with Credit One, fees and all. Sometimes you have to pay for access to credit, and Credit One is not a bad option for a time. Pay to play, get credit history.

I think you nailed it. I think @Anonymous is confusing Capital One with Credit One. The situation she's describing is exactly what people run into with Credit One. Capital One falls into the category of "normal" banks that don't set up traps like Credit One does.

OP, if your baddies don't get in the way, I think the three-year history on your Kohl's card should set you up nicely for an unsecured no-fee major card from a non-predatory bank. It may be a starter card with a low limit, but that's OK. Use the card appropriately (pay in full), and other opportunities will come your way as the months go on.

But definitely talk to your lender first. Card applications can come after the situation at hand is settled.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Mon, 04 Jun 2018 14:37:51 GMT

@Anonymous wrote:
https://www.imageupload.co.uk/image/EGu7

Tell that to myfico Can you tell me why this is true and how many points would be normal?

That's not your actual score, it's a scoring simulator which is not accurate ...

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Mon, 04 Jun 2018 22:14:43 GMT

Update:

I called my university to confirm dates of enrollment, cross referenced these dates with the late notices. 9 Overlap with enrollement periods where payments should have been deferred! Payments can be deffered 6 months after the last date of enrollment. This fall within this time zone.

I am surprise that instead of a single 120 day late notice, it holds a 60 and 90 day late notices. I guess they aren't consolidated?

I callled them and they requested I send them an email

June 4, 2018

Conduent (Formerly ACS)

Account Number : *********

Me, my adress

Dear Conduent,

This letter is in regard to my previous account with your former company ACS, before it was transferred to ReliaMax around the start of 2017. The account, regrettably, went overdue numerous times. Some of the dates however coincide with dates I was enrolled in college and I believe they should have been deferred for at least 6 months past the last date of enrollment.

In particular, I received late reports for the months of May, June, and July of the year 2012. I believe these months should have been covered in my deferment period. January 8, 2012 is the final day of the 2011 Fall Semester, in which I attended your University.

University Address and Telephone Number

They will be happy to verify the semesters I was enrolled upon request.

Furthermore, I was hoping I can also get the previous late notices excused, taking into consideration I was not employed on these dates.

I understand you guys must be busy and your time is valuable. I appreciate any assistance you can offer in this regard. Please help me adjust, in goodwill, these negative marks on my credit as much as you possibly can.

I believe an adjustment on my credit report will greatly help facilitate a new start in my life with my new real estate investing business. I will be immeasurably grateful. If ever a client inquires about a good lender, I will remember your good service.

Please feel free to contact me at xxxx if you would like further information.

Sincerely,

If ever someone needs a template to a student loan for good will adjustments on their credit reports, maybe it will help.

I'm hopeful while planning for any eventualities.

Kohls - I called them up, they could not look up any history past a year! I was able to get a late fee reversed and credited to my account however. Instead, I need to call Capital One to discuss the matter. They are the creditors for Kohl's Cards.

This will have to wait until I get replacement in the mail. They need the number on the card, apparently. Giving them a SSN wouldn't even allow me access...

Anywho, one step at a time ..

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

SouthJamaica — Mon, 04 Jun 2018 22:05:29 GMT

@Anonymous wrote:
@SouthJamaica

Very interesting suggestion. I'll probably stop by all of the local credit unions. For real estate investing, their loans are highly valued.

Is this an example of what you mean when you say other forms of credit, aside from buying everyday items?

You indicated you had other credit needs, such as refinancing your student loans and a real estate investment. A good credit union is better for that type of borrowing, too.

Re: Adding a Card = +70 points to FIC0 -- CC Recommendations?

Anonymous — Mon, 04 Jun 2018 22:16:15 GMT

@Anonymous

I edited your post to remove the name of your University and your first name. It's important for privacy reasons to minimize as much personal information as possible.