topic Re: Where should I go from here? in General Credit Topics

Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:02:47 GMT

Hi Everyone!

I'm a total newbie to the forums and over the last 6 months have had a rude awakening in regards to my credit history and score and would love some direction.

I had a credit score of about 590 and have raised it over the last year to a 686 (and rising). The only credit card that I had was a Capital One platinum (CL of 5300) and after signing up for credit karma and other sites I saw that to be considered in good standing I needed 6+ accounts?? I applied for a few cards and had a student loan (im current on it). So far I have the following:

Cap One Platinum - CL: 5300 / 3 years / $2900 balance (was almost maxed out 6 months ago)(I don't use this card anymore, only pay down, recently about $400+ a month-- looking to hopefully upgrade it to a SAVOR or VENTURE card that has no fee once its paid off)

Cap One Quick Silver ($39 Annual) - CL: 1000 / 3 months / (Pay in full every month -this is my everday card cause of the 1.5% CB - in less than 3 months I already have $21.87 in cashback - I treat this like a debit card and pretty much pay things as I go - Looking to upgrade to the no fee version in about a year)

Discover it: CL: 2500 / 3 months / (Usually at a 10% utilization-- I usually pay the last months balances in full but use it to pad my savings -- but make sure not to incur interest - use for rotating categories and purchases over $50)

Amex Everyday Cash Back (No Annual): L: 500 / 2 months/ (I pay bi weekly in full - only use for supermarket and Deli)

AA Advantage Citi -(No Annual) CL: 2800/ Brand New .

Student Loan - $18,000 (242 min + 40 extra monthly )

Extra details:

Payments: 64/64 (this is so low cause I only had 1 credit card and thought that was better than having a lot, how wrong I was)

Missed payments: 0

Payment history: 100%

Avg age of credit: 2 years

Collections: 0

WHAT I WANT (I want one more card before I go on a 1-2 year hiatus before applying for anyting new):

- Balance Transfer Card

- Dining Points Card

EX: 685 TU: 686 FICO: 640

HI: only shows (2)

Can anyone recommend a card that I have a good chance to be approved? All of the above were from "PRE APPROVED" offers-- i just don't want to be denied.

Also -- what shoul dbe my course of action going forward?

I want my credit score to get to 750+ within 1-2 years.

Any advice would be appreciated! And I know that "pay your balance off" is what a lot of people will say -- trust me -- I'm working on it and am in a better financial situation than I was a year ago and am throwing as much as I can into the debt every paycheck.

Thanks in advance!

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:03:39 GMT

Where are you getting your credit scores from?

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:07:23 GMT

Your score may be rising(congrats) but you won't be approved on scores alone. You can be denied for too many recent accounts and recent inquiries so giving you a recommendation for a sure thing approval isn't going to happen.

Do not listen to Credit Karma's recommendations. They get paid when you apply so naturally they will recommend a ridiculous number of accounts. You currently have more than enough accounts right now to achieve a perfect score in the future but what you need is time. Since you are in with Amex then their score is your true Experian FICO 8. Don't even bother looking at the Vantage scores in Credit Karma as those scores won't be used in any lending decisions so therefore they are irrelevant.

Currently the balance on your Capital One is hurting your scores. You will certainly pick up some points as you pay it down. You'll see your best score results once it gets to $471.70 or below and as long as your total utilization across all cards do not exceed 8.9% of your available credit lines.

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:08:45 GMT

Mainly the apps from the CC providers and Credit karma.

They're all pretty consisent.

Creditwise - 686

Discover Fico- 640

American Express App - 685

Is there a better way that doesn't involve me paying?

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:16:47 GMT

This is extremely helpful!

I though it was weird that in order for me to score in the top percentile I had to have 10+ accounts .

I'll work on just paying down my debt -- but a balance transfer card would help :-/ I currently pay about $60 in interest from the cap one per month (down from almost $110).

It's helpful to know that the Amex Score is accurate which is good news!

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:22:07 GMT

@Anonymous wrote:
Mainly the apps from the CC providers and Credit karma.

They're all pretty consisent.

Creditwise - 686
Discover Fico- 640
American Express App - 685

Is there a better way that doesn't involve me paying?

Discover provides TransUnion FICO Score 8 and American Express provides Experian FICO Score 8; so you are missing your Equifax FICO score.

The scores shown on Credit Karma and some Capital One credit cards are calculated using the Vantage Score 3.0 model; that is definitely not the same as FICO scores and they should be ignored since I'm am not aware of any lender who uses Vantage Scores to make lending decisions.

You do not need 6 or more accounts to improve you credit score; increases come primarily from paying your existing accounts on time and keeping you balances low or at zero. Adding new accounts hurts your credit score in the short-term because of the inquiries, and because each new account decreases your Average Age of Accounts and resets your Age of Oldest Account to zero; both factors also cause scoring penalties.

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:33:10 GMT

Thanks for the explanation

@Anonymous wrote:
@Anonymous wrote:
Mainly the apps from the CC providers and Credit karma.

They're all pretty consisent.

Creditwise - 686
Discover Fico- 640
American Express App - 685

Is there a better way that doesn't involve me paying?
Discover provides TransUnion FICO Score 8 and American Express provides Experian FICO Score 8; so you are missing your Equifax FICO score.

The scores shown on Credit Karma and some Capital One credit cards are calculated using the Vantage Score 3.0 model; that is definitely not the same as FICO scores and they should be ignored since I'm am not aware of any lender who uses Vantage Scores to make lending decisions.

You do not need 6 or more accounts to improve you credit score; increases come primarily from paying your existing accounts on time and keeping you balances low or at zero. Adding new accounts hurts your credit score in the short-term because of the inquiries, and because each new account decreases your Average Age of Accounts and resets your Age of Oldest Account to zero; both factors also cause scoring penalties.

Thanks so much for the explanation!

It makes total sense as the avg age of my accounts used to show almost 10 years ( i did defer the student loan a few times over the years), and now its down to 2 years.

I think I should have applied for a balance transfer card first -- and gone from there -- I just was so focused on the pre-approved offers and was kind of scared to even apply to something that I wasn't "pre-approved" for (even I know its just a marketing gimmick).

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:43:45 GMT

Just a suggestion OP, Discover IT gives you 2% on general spending and 10% on category spending with 1st year cashback match, you're leaving reward dollars on the table by using QS1 as your daily driver instead of Discover IT. QS1 is also very hard to break even on its annual fee and it's widely considered the worst card in CapOne lineup because it's almost impossible to product change out of. Additionally its 1k SL probably won't grow much out of the CL bucket, I would look for opportunities to PC it to QS without AF, if PC option isn't available, PC Platinum to QS when its balance is lowered and then combine QS1 into the PCed QS to avoid the $39 AF.

For now, I would move most QS1 spending over to Discover and just put a monthly token charge on the QS1, this will help recoup more of the annual fee you're paying on the QS1.

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 19:41:57 GMT

You could take a look at a credit union BT card or one like the Bank of America Americard. Are you eligible to join Navy Federal Credit Union?

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 20:02:04 GMT

@Anonymous wrote:
Just a suggestion OP, Discover IT gives you 2% on general spending and 10% on category spending with 1st year cashback match, you're leaving reward dollars on the table by using QS1 as your daily driver instead of Discover IT. QS1 is also very hard to break even on its annual fee and it's widely considered the worst card in CapOne lineup because it's almost impossible to product change out of. Additionally its 1k SL probably won't grow much out of the CL bucket, I would look for opportunities to PC it to QS without AF, if PC option isn't available, PC Platinum to QS when its balance is lowered and then combine QS1 into the PCed QS to avoid the $39 AF.

For now, I would move most QS1 spending over to Discover and just put a monthly token charge on the QS1, this will help recoup more of the annual fee you're paying on the QS1.

This makes sense!

I only get 1% on everything and 5% on rotating categories (currently 19.87 CB) -- but this is solid advice // but if it doubles at the end of the year I see what you mean. This is definitely the better option.

I'll start using my discover as the everyday and use the quick silver to try and recoup the losses of the AF. I didn't even know that I could combined cards. Maybe that will be the route to take if they don't let me upgrade it to the no fee version. I'm certain that they will let me know change the Platinum to something else though -- so if anything I'll combine.

I appreciate the advice!

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 20:05:47 GMT

@Anonymous wrote:
You could take a look at a credit union BT card or one like the Bank of America Americard. Are you eligible to join Navy Federal Credit Union?

Thanks. I'll take a look at this.

Unfortunately I'm not eligible or the NFCU account :-/ but maybe the bankamericard might work -- after a quick google search it seems to be a low bar of entry.

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 20:08:08 GMT

Don't use QS1 to recoup, it's a losing proposition, every time you use it in place of Discover, you're losing .5%. Just put a small charge monthly (a cup of coffee and a few donuts) to keep it alive until you can get out of it via PC or combination.

Re: Where should I go from here?

Anonymous — Sun, 11 Nov 2018 21:23:50 GMT

I have 1 card and I'm an authorised user on one of hubbys cards and I have a small instalment loan. That's it, that's all. My scores (in siggy) are all above 700 due to low utilization and no baddies.

I only post this cause it's important to know that you don't need 10+ cards and 3+ loans to have great scores. Also worth mentioning that scores are only part of the picture. If someone saw my 790 EX, they might mistakingly think I could get any credit product I wanted. They would be wrong. 😂 my oldest account is only 7 months old and I have no income. Income, scores, negative marks, number of new accounts, etc... paints the picture of what potential creditors are looking at.

You've been given some great advice here already. Shift your spend to Discover, pay down your balances, head to the garden. Your in better shape than you realize. 🙂

Re: Where should I go from here?

beutiful5678 — Thu, 15 Nov 2018 08:09:50 GMT

Are you getting charged interest on the Cap1 Plat? If so, what is the interest rate? And what is the interest rate on your student loan? Assuming your Cap1 Plat interest rate is 20-30% and your student loan rate is meaningfully less than that (they usually are), the extra $40 that you're throwing at your student loan would save you more on interest if you put that money towards your Cap1 Plat.

Re: Where should I go from here?

Anonymous — Fri, 16 Nov 2018 04:46:46 GMT

@beutiful5678 wrote:
Are you getting charged interest on the Cap1 Plat? If so, what is the interest rate? And what is the interest rate on your student loan? Assuming your Cap1 Plat interest rate is 20-30% and your student loan rate is meaningfully less than that (they usually are), the extra $40 that you're throwing at your student loan would save you more on interest if you put that money towards your Cap1 Plat.

Yea, crazy interest as you can imagine. This is a good idea, I think I'll do this then. Thank you.