topic Re: How to Climb the Credit Card Ladder in General Credit Topics

How to Climb the Credit Card Ladder

Soundersfan1 — Wed, 09 Oct 2024 10:27:10 GMT

I applied for the Chase United Explorer card the day I turned 18 and got denied with a 781 credit score. There reasoning was lack of credit history and no cards with similar credit limits. I had been an authorized user on the Capital One Quicksilver for around 12 years. I was wondering how I'd get to the Chase United Explorer and Chase Sapphire Preferred.

Current Cards:

Chase Freedom Rise - $900 CL (Feb 2024)

BECU Cash Back Visa - $1,000 CL (Mar 2024)

Discover Student Chrome - $1,000 CL (July 2024)

Chase United Gateway - $1,000 CL (Aug 2024)

Experian - 686

Late Payments - 0

Experian Credit Checks - 8

Credit Usage - 60%

Re: How to Climb the Credit Card Ladder

JoeRockhead — Wed, 09 Oct 2024 11:32:34 GMT

I believe the minimum SL for that card is $5k. In addition to your lack of experience with larger limits... the 686, 8 inquiries and in particular, the 60% reported usage aren't helping you. Nothing you can do about the inquiries other than stop applying for credit, but you can get your utilization down which will boost up your scores. Getting below 50% will make a difference. Below 30% will make more of a difference but getting, and staying below 9% will be optimum for your scores, and show lenders you're managing your finances well.

Once you get your usage down, seek out CLIs on your existing accounts

Re: How to Climb the Credit Card Ladder

coldfusion — Wed, 09 Oct 2024 12:13:34 GMT

The reasons Chase gave for denying your application are consistent with their overall approach with issuing unsecured credit. Without writing a novel here, basically you're trying to do too much too fast for Chase' liking. As an aside, if you aren't aware of the Chase 5/24 rule I suggest you read this article: https://thepointsguy.com/credit-cards/ultimate-guide-chase-5-24-rule/

(I may ramble a bit here, I'm not yet fully caffeinated this morning)

One constraint with regard to the CSP (from memory I believe also true for the UA Explorer but that needs to be fact-checked) is that it has a minimum starting limit of $5K, and Chase typically prefers to not extent a credit limit on a new card that is higher than any other card the applicant currently holds. As it is you've done well with already getting 2 Chase cards out of your first 4, at this point you mostly need to practice patience and put together a roadmap to follow regarding the what and when to apply for more credit, being mindful that many issuers have their own rules and guidelines when it comes to cadence of applications and/or acquiring new cards (Chase 5/24, BoA 3/12 and 7/12, Citi 6/6, and so on). Right now time is your ally if you use it wisely. Also be mindful that Discover and now Chase uses soft pulls to evaluate credit limit increases on existing cards, although I don't know Discover's policies regarding their student cards.

The fact that you've been an authorized user on a card for a while is useful but its impact on credit-making decisions is limited as you are not the party responsiuble for the debt. That's a generally held viewpoint amongst issuers, not just Chase.

Re: How to Climb the Credit Card Ladder

SouthJamaica — Wed, 09 Oct 2024 16:07:54 GMT

@Soundersfan1 wrote:
I applied for the Chase United Explorer card the day I turned 18 and got denied with a 781 credit score. There reasoning was lack of credit history and no cards with similar credit limits. I had been an authorized user on the Capital One Quicksilver for around 12 years. I was wondering how I'd get to the Chase United Explorer and Chase Sapphire Preferred.

Current Cards:
Chase Freedom Rise - $900 CL (Feb 2024)
BECU Cash Back Visa - $1,000 CL (Mar 2024)
Discover Student Chrome - $1,000 CL (July 2024)
Chase United Gateway - $1,000 CL (Aug 2024)

Experian - 686
Late Payments - 0
Experian Credit Checks - 8
Credit Usage - 60%

Welcome to the forum.

My advice would be to slow down.

If you

- wait 13 months before applying for another credit card

- keep your aggregate utilization to 9% or less

- let 3 cards report zero balance while the other reports a balance of 28 % or less and

- maintain your accounts in good order..........

You'll be able to apply for anything you want.

Re: How to Climb the Credit Card Ladder

Soundersfan1 — Thu, 10 Oct 2024 00:03:56 GMT

What about upgrading? My BECU Visa currently gets me 1.5x back so instead of upgrading my Freedom Rise to Unlimited, I'm going to upgrade to Flex for the 5x rotating category and then potentially to the Sapphire Preferred but I'm leaning on just applying for one as for the United Explorer I'm thinking of upgrading that. In terms of new credit limits at the 1 Year mark what should I be expecting for my Chase cards?

Re: How to Climb the Credit Card Ladder

SouthJamaica — Thu, 10 Oct 2024 03:56:37 GMT

@Soundersfan1 wrote:
What about upgrading?

If you do a product change with the same lender it usually does not show up as a new account and does not usually involve a hard pull. But you should check with your lender to be sure before trying it.

My BECU Visa currently gets me 1.5x back so instead of upgrading my Freedom Rise to Unlimited, I'm going to upgrade to Flex for the 5x rotating category

That would be a product change. I wouldn't call it an "upgrade".

and then potentially to the Sapphire Preferred

That has to be down the road. You're not going to qualify for a CSP at this time.

but I'm leaning on just applying for one as for the United Explorer I'm thinking of upgrading that.

OK but my advice is to wait.

In terms of new credit limits at the 1 Year mark

I don't think we can say anything about that now. We have to see what your profile is when the time comes. Meanwhile, you may be able to increase your present limits with soft pull credit limit increase requests. Just make sure they're soft pull before you apply.

what should I be expecting for my Chase cards?

Same answer.

Re: How to Climb the Credit Card Ladder

Horseshoez — Thu, 10 Oct 2024 10:48:20 GMT

@Soundersfan1 wrote:
I applied for the Chase United Explorer card the day I turned 18 and got denied with a 781 credit score. There reasoning was lack of credit history and no cards with similar credit limits. I had been an authorized user on the Capital One Quicksilver for around 12 years. I was wondering how I'd get to the Chase United Explorer and Chase Sapphire Preferred.

Current Cards:
Chase Freedom Rise - $900 CL (Feb 2024)
BECU Cash Back Visa - $1,000 CL (Mar 2024)
Discover Student Chrome - $1,000 CL (July 2024)
Chase United Gateway - $1,000 CL (Aug 2024)

Experian - 686
Late Payments - 0
Experian Credit Checks - 8
Credit Usage - 60%

In addition to what others wrote, you state you have a 781 credit score but you also state youre Experian FICO 8 score is 686. My bet is that 781 is a Vantage 3.0 score, and if I'm correct, is irrelevant for underwriting purposes.

Re: How to Climb the Credit Card Ladder

Soundersfan1 — Thu, 10 Oct 2024 11:38:25 GMT

It was a 781 when I applied the day I've turned 18 now with open new lines of credit and credit checks it's now a 686

Re: How to Climb the Credit Card Ladder

Aim_High — Fri, 11 Oct 2024 02:25:10 GMT

@Soundersfan1 wrote:
It was a 781 when I applied the day I've turned 18 now with open new lines of credit and credit checks it's now a 686

Welcome to My FICO forums, @Soundersfan1. You've gotten some great advice above from @JoeRockhead, @coldfusion, and @SouthJamaica. We often say that "Credit is a marathon, not a sprint." Your pace is like you're running a sprint. If you turned 18 in the past year or so, it sounds like, you have decades of credit-building ahead of you. Relax. None of us got to the levels where we are overnight.

Your 781 FICO was great, apparently thanks to the AU account someone wisely gave you to help build a credit file. Unfortunately, one 800 FICO is not another 800 FICO. In other words, FICO is just one piece of the credit profile, but it can be deceiving since there are many other important factors. In your case, that credit-seeking gave you four lower-limit cards and tanked your score by 95 points. The impact on a thicker file would have been far less. You're missing the thickness of file: number of accounts, age of accounts, long-term satisfactory payment history on those accounts, the higher limits that lead to more higher limits, and I'm guessing the income that also will help to open the doors. All of this takes time for most of us, and a lot of it.

At this point, you need to enter "the garden," meaning not applying for any new credit cards or authorizing any hard pulls for credit limit increases. (Soft pulls or auto-CLIs are allowed.) Use all of your cards at least a little every month; pay-in-full; rinse and repeat. Give it at least 12 months, maybe longer. You've got a good basis of cards and lenders to begin.

Four cards in a year is a lot for a young profile. In general, even for more developed profiles, I suggest striving for just one new account, on average, every six months. As you get farther along the journey, you may be able to be a little more aggressive but keeping in mind that the result can be denials, lower starting limits, or the need to garden even longer to repair the damage before applying for new cards.

To answer your question, to climb the credit card ladder, use your cards responsibly and regularly, pay in full, apply for new cards sparingly and when you need a new card, be patient and enjoy the journey. Welcome to our forums.

Re: How to Climb the Credit Card Ladder

Soundersfan1 — Fri, 11 Oct 2024 10:39:18 GMT

Assuming I keep making on time payments, lower my credit utilization to under 50%, and no more hard checks (I'm moving soon and there might be another hard check), where would I stand with getting the Sapphire Preferred with a full year of credit history? (I have 1 slot left in the 5/24)

And would I be able to upgrade the United Gateway to the Explorer about then as well?

Re: How to Climb the Credit Card Ladder

JoeRockhead — Fri, 11 Oct 2024 12:05:03 GMT

@Soundersfan1 wrote:
Assuming I keep making on time payments, lower my credit utilization to under 50%, and no more hard checks (I'm moving soon and there might be another hard check), where would I stand with getting the Sapphire Preferred with a full year of credit history? (I have 1 slot left in the 5/24)

And would I be able to upgrade the United Gateway to the Explorer about then as well?

Making on time payments for a year will be great, but what will serve you better is to get your aggregate utilization down, and keep it down to under 9%. Ideally you'd only have one of your cards reporting a balance, with the others reporting zero. Continually carrying 30% to 49% revolving debt doesn't look bad per se, but it doesn't look, and isn't scored like optimum credit management to issuers.

Concentrate on keeping your reported usage down, and growing the limits you have over the next 12 months. Your scores will go up, up, up... as will your demonstration of managing your finances and the ability to handle larger limits.

Re: How to Climb the Credit Card Ladder

SouthJamaica — Fri, 11 Oct 2024 14:19:00 GMT

@Soundersfan1 wrote:
Assuming I keep making on time payments, lower my credit utilization to under 50%, and no more hard checks (I'm moving soon and there might be another hard check), where would I stand with getting the Sapphire Preferred with a full year of credit history? (I have 1 slot left in the 5/24)

And would I be able to upgrade the United Gateway to the Explorer about then as well?

No one can answer your question. Maybe yes, maybe no.

What would help if those are your goals is to get your aggregate utilization to 9%, not 50%, and to try for some soft pull credit limit increases along the way.

Re: How to Climb the Credit Card Ladder

Aim_High — Wed, 16 Oct 2024 18:41:29 GMT

@Soundersfan1 wrote:
Current Cards:
Chase Freedom Rise - $900 CL (Feb 2024)
BECU Cash Back Visa - $1,000 CL (Mar 2024)
Discover Student Chrome - $1,000 CL (July 2024)
Chase United Gateway - $1,000 CL (Aug 2024)

Experian - 686
Late Payments - 0
Experian Credit Checks - 8
Credit Usage - 60%
======================
@Soundersfan1 wrote:
Assuming I keep making on time payments, lower my credit utilization to under 50%, and no more hard checks (I'm moving soon and there might be another hard check), where would I stand with getting the Sapphire Preferred with a full year of credit history? (I have 1 slot left in the 5/24)

And would I be able to upgrade the United Gateway to the Explorer about then as well?

Short answer, the odds are probably very low for both questions barring some exceptional changes to your profile. Your starting limits are based upon many factors, two of which are your existing credit limits which you've demonstrated that you can manage responsibly over extended periods of time and income. With an overall thin credit file and four young accounts within the past 12 months, you don't enough history to expect those limits to grow substantially from lender relationship or spending. You would have to put heavy spend on one or more of those cards and be able to get a large CLI on at least one card. Also, reported income would probably need to be significantly higher.

Both of those cards that you're targeting, the United Explorer and Sapphire Preferred, are Chase cards. Disregarding your 5/24 eligibility, Chase generally wants to see moderate-to-thick credit files before they get comfortable. Your $1K and $900 approvals are both bare-bones approvals from them that almost didn't qualify. Meanwhile, the two cards you are targeting both require a minimum $5K SL for approval. (Go to the links above, click on the "Pricing and Terms" link, and you'll see both of these cards in the fine print state: "If approved for an account, your credit access line will be at least $5000.") In other words, if your profile doesn't justify a $5K limit, you would be declined if applying. Likewise, a product-change wouldn't be permitted without a $5K minimum on the donor card. You've had three different lenders tell you that your profile qualifies for about $1,000 limits. Believe them. And to get from your average credit limits of $1,000 to a limit of $5,000, you're looking at 500% growth. That's unlikely to happen in one or two years.

You're gotten good advice from @JoeRockhead and @SouthJamaica. Again, as I said in my earlier reply, you seriously need to remember you're in a marathon and enter the garden. The 12 months I suggested [as a minimum] was based on today, not from a full year of personal credit history in addition to the AU account. Honestly, if you don't have a large change in your income or heavy spending or both, I would suggest planning to nurse those existing cards for a few years before expecting large growth. Patience. If you use those cards regularly, pay-in-full, and keep utilizations low (preferrably under 9%), they will probably grow well for you and the rewards will come in time. Eventually, you'll be able to do those product changes or new cards with high odds of approval.

Re: How to Climb the Credit Card Ladder

CreditCuriosity — Wed, 16 Oct 2024 20:15:50 GMT

As other people said patience is the name of the game people give answers then you come back with when can I get at least twice I believe. likely it will be two years if you just turned 18 as the last slot will not likely be a chase card as they want to see a 5k limit by another issuer which means that last 5/24 will be utilized by say a CU that might be a bit more liberal on giving out a bit more of a limit. You have dropped your score from a 780 to a 680 approx and the 780 obviously was just an AU account or accounts. Thin profiles will be impacted by the HP and the new acount a 100 point hit is considerable where-as if a thick profile opened 4 new accounts and took 4 hp's they might drop 15 points approx for an example give or take a few. Your utilization is high as well why is this? This gives lenders more pause on also issuing more credit. Treat credit like case if you can't afford something don't charge it everything you charge in theory you have cash to be able to pay it off when due. If you take that lesson you will never be in a situation of trying to make payments or having a CO or BK. Patience is your key and responsible use. More young people ruin their credit than any other demographic speaking from one such as myself that lived beyond their means then payed for it more than just 7 years as never got the best terms on loans then rebuilding no accounts went to CO's and paying them back, etc.

Re: How to Climb the Credit Card Ladder

Soundersfan1 — Fri, 25 Oct 2024 04:55:53 GMT

The thing is I always pay off my credit cards in full and on time. I recently saw a trick where I'd pay off like 99% of my credit card before the statement closing date and when the statement closes and is reported, it'll show as like a 1-2% credit utilization. And Capital One did just pre approve me for the Quicksilver and Savor for good credit

Re: How to Climb the Credit Card Ladder

SouthJamaica — Fri, 25 Oct 2024 11:33:00 GMT

@Soundersfan1 wrote:
The thing is I always pay off my credit cards in full and on time. I recently saw a trick where I'd pay off like 99% of my credit card before the statement closing date and when the statement closes and is reported, it'll show as like a 1-2% credit utilization. And Capital One did just pre approve me for the Quicksilver and Savor for good credit

It's not a "trick", it's the way FICO calculates utilization... the balance as of the reporting date, which is usually the statement balance.

It helps your scores to (a) have most of your accounts reporting zero balance and (b) one account reporting a small balance.

Chase is an exception to the general rule. It does report the statement balance, but it also reports a zero balance if the account is paid down to zero mid cycle.

Re: How to Climb the Credit Card Ladder

NoMoreE46 — Sat, 26 Oct 2024 12:12:23 GMT

@Soundersfan1 ,

Chill for at least Six months from your last app(roval). Better if you can do 12 months.

Stay away from any advice or "Hacks" from Influencers on YouTube, TikTok or ding dong. Many of those posers come here and regurgitate info gleaned from this forum.

@Soundersfan1 wrote:
The thing is I always pay off my credit cards in full and on time. I recently saw a trick where I'd pay off like 99% of my credit card before the statement closing date and when the statement closes and is reported, it'll show as like a 1-2% credit utilization. And Capital One did just pre approve me for the Quicksilver and Savor for good credit