topic Re: Absolutely zero credit in Rebuilding Your Credit

Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 15:01:48 GMT

Hello board, I have absolutely nothing on my credit report but I want to get rolling on the right track to get my credit score as high as possible as fast as possible. As of now, Capital One wouldn't even accept me for a secured card based on no credit history. What path should I take to create a positive history and what items or processes should I avoid?

Thank

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 16:48:47 GMT

Welcome to the forums.

Secured cards are the usual route that one takes to building credit. Open Sky has a secured credit card, so that could potentially be an option. Not sure what the current protocol for SDFCU is, but in the past, they would run a check to see if you were in Chexsystems, but I believe I've read that they might now do a HP with EQ, but you could contact them and find out more details. Credit One and all of the other subprime lenders could be consiered an option, but exercise care with them because of the fees and potential penalties that could arise with them from carrying a balance. Also exercise some care with using the SCT because Comenity has been shutting down accounts. I've used SCT before, but at the time, accounts weren't being closed like they are now. If you can get two secured cards opened, then use those 2 accounts to get you a score, then in 6 months check out the Cap1 prequal or maybe Chase Freedom. Barclays likes to see a year's payment history. If you know of someone with good credit and payment history, maybe becoming an AU on their account might help to artificially boost your score temporarily.

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 19:44:15 GMT

THANK YOU! I truly appreciate the supply buuuuuut where can I find what the acronyms mean? haha... I'm lost on the terms "HP, EQ, SCT, and AU"... Sorry for being a novice.

@Anonymous wrote:
Welcome to the forums.

Secured cards are the usual route that one takes to building credit. Open Sky has a secured credit card, so that could potentially be an option. Not sure what the current protocol for SDFCU is, but in the past, they would run a check to see if you were in Chexsystems, but I believe I've read that they might now do a HP with EQ, but you could contact them and find out more details. Credit One and all of the other subprime lenders could be consiered an option, but exercise care with them because of the fees and potential penalties that could arise with them from carrying a balance. Also exercise some care with using the SCT because Comenity has been shutting down accounts. I've used SCT before, but at the time, accounts weren't being closed like they are now. If you can get two secured cards opened, then use those 2 accounts to get you a score, then in 6 months check out the Cap1 prequal or maybe Chase Freedom. Barclays likes to see a year's payment history. If you know of someone with good credit and payment history, maybe becoming an AU on their account might help to artificially boost your score temporarily.

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 19:57:46 GMT

@Anonymous wrote:
THANK YOU! I truly appreciate the supply buuuuuut where can I find what the acronyms mean? haha... I'm lost on the terms "HP, EQ, SCT, and AU"... Sorry for being a novice.
@Anonymous wrote:
Welcome to the forums.

Secured cards are the usual route that one takes to building credit. Open Sky has a secured credit card, so that could potentially be an option. Not sure what the current protocol for SDFCU is, but in the past, they would run a check to see if you were in Chexsystems, but I believe I've read that they might now do a HP with EQ, but you could contact them and find out more details. Credit One and all of the other subprime lenders could be consiered an option, but exercise care with them because of the fees and potential penalties that could arise with them from carrying a balance. Also exercise some care with using the SCT because Comenity has been shutting down accounts. I've used SCT before, but at the time, accounts weren't being closed like they are now. If you can get two secured cards opened, then use those 2 accounts to get you a score, then in 6 months check out the Cap1 prequal or maybe Chase Freedom. Barclays likes to see a year's payment history. If you know of someone with good credit and payment history, maybe becoming an AU on their account might help to artificially boost your score temporarily.
That's understandable. I had to learn them too.

HP means Hard Pull when applying for credit
AU when Authorized User when someone with good credit adds you to their account

EQ stands for credit bureau EquifaxSCT stands for shopping cart trick which is a way to get credit without a HP to your reports, but sometimes results in getting toy limits which couild affect your profile later

http://ficoforums.myfico.com/t5/Credit-Cards/Updated-Abbreviation-List/m-p/4534572#M1309056

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 20:31:17 GMT

What worked for me was opening a checking acc at a credit union, then after around 4-6 months with no overdrafts I applied for a secured card with them, this was the only way I could get a secured card at the time.

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 20:24:42 GMT

1) Please chill out on the FAST as possible mantra because time is time, period....You can't rush it and those that try to run to fast wind up getting burnt.

2) The secured CC route is safe and reliable, my only twist is to START with a secured loan (share secured) via a Credit Union
Then use the same funds to secure 2 CCs and you're off to the races.

Example:

$500 loan + $200 Discover card +$300 Visa
Add 6-8 months of payment history with low debt ratio and BAM!

Your score can't help but be solid and you're only 4 months away from the HPs aging past 12 months
AND all 3 TLs would be nearing a 1 year watershed moment

= Cooking with grease
Simple as that

Good luck

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 20:27:42 GMT

Go to a local credit union with copies of your pay stubs, you will be approved for an unsecured card with a low limit. That will be a good place to start.

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 20:49:49 GMT

Someone sent me a private message to go to self lender and I will see a score of at least 600 after one year so I've started that process. Monday I will go to a local CU and try to get an account and then go from there. Thanks for the advice guys... I will keep you all updated, step by step.

Re: Absolutely zero credit

Anonymous — Sat, 21 Jan 2017 20:58:27 GMT

@Anonymous wrote:
Someone sent me a private message to go to self lender and I will see a score of at least 600 after one year so I've started that process. Monday I will go to a local CU and try to get an account and then go from there. Thanks for the advice guys... I will keep you all updated, step by step.

Hey now don't do that! I just went and looked at them looks like they are a complete rip off! You can get the same thing at a credit union for free by establishing a share secured loan and paying it down down right after there are threads on here about the process. Stop if you can

Edit here is the link: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756/highlight/true#M106741?q=share+secured

Re: Absolutely zero credit

Anonymous — Sun, 22 Jan 2017 10:37:50 GMT

I just can't fathom how anyone would even CONSIDER some nonsensical crap like:

Go to #@#@ for a YEAR to garner a 600 credit score
Really?

600 huh? After a year?

I have a easy run down, that would build a solid long-term foundation at little to no cost using legit sources in 6-9 months, which will lead to a solid score and overall credit profile and you'd even consider a B.S. notion that promises a weak 600 score after a YEAR

No offense but this type of thought pattern is exactly what the scammers prey on, I mentioned that the whole 'as fast as possible' screams something didn't I?

There are legitimate CUs and Discover that will approve a secured CC with a deposit as little as $200, a few even less than that

The scoring model only cares about
On time payments (35%) and
Debt to Limit ratio (30%)
For 2/3rds of the score...It doesn't matter if it's the % of a $200 account vs a $2000 account

The % is the % and an on time payment calculates just the same the build HISTORY over a 6-9 month period.

This thing is just a video game that needs DATA...Feed it data and watch it grow period, simple, easy

6 months is generally needs to form a score anyway, I say 6-9 because of different reporting times just to be safe

I also like the secure loan for another reason than just using the money more than once as mentioned earlier but also because it allows for more manipulation of the scoring model because it allows the
10% credit mix section of the scoring model to be addressed and added to the 65% for on time and low debt ratio ...

Now we're stroking 75% the only things left are 15% for AGE of credit and 10% for New Credit/Inquires

If one doesn't have $500-600 bucks at once start with a $200 account and save $50/month and in 4 months open another TL...Either way in 6-9 months a zero credit person can build a file with little to no money...

If one can't pay/save $50/month... Credit accounts probably aren't for them yet anyway

I will add the WORSE thing that can happen is a person has some money in a savings account to be paid back to them 12 months or so....It's called using savings to build credit in my book
What's the problem?

Re: Absolutely zero credit

Anonymous — Sun, 22 Jan 2017 14:53:52 GMT

@Tydawg & @Gemini101- OK! I will stop the Self Lender process now... It sounded like the same process of a shared secured loan but I guess I misunderstood something. Would it be best to get a long term loan or a shorter term? As far as secured CC, I tried a couple online to no avail, so I will take the advice given to me in one of the replies and take a wad of cash and my earnings statements to a CU and try to get one from there.

Re: Absolutely zero credit

wa3more — Sun, 22 Jan 2017 15:15:40 GMT

my college daughter was in same spot , open credit union account and got a master card unsec.

To the OP :

- you have a job and make a decent salary ?

-where do you bank ? you have a checking or savings account anywhere ?

Re: Absolutely zero credit

Anonymous — Sun, 22 Jan 2017 15:58:54 GMT

I currently make right about $30k with my cell phone car insurance and rent as my only bills. My company offers a debit card to load my paychecks on and I've been using that as my only source of banking. I am going to open a CU account monday,

Re: Absolutely zero credit

wa3more — Sun, 22 Jan 2017 17:29:00 GMT

yes, open up a checking and savings account at local CU. If your company does direct deposit, do that into checking.

You should not have a problems with a CC at a credit union. They will most like start you out with low credit limit. They started my daughter at 500.

Re: Absolutely zero credit

Anonymous — Sun, 22 Jan 2017 18:45:26 GMT

The credit union I used to work at had a policy where we would automatically approve a $500 unsecured limit if you had a -0- score and could provide proof of income, they are out there and you should be much happier there than loading your pay onto a prepaid card, if you have any additional questions feel free to drop into the forums again! Glad to hear you were able to stop the process there are much better ways to build your credit an luckily you came to a good starting place and Gemini, I, and others can steer you where to go. Best of luck

-tydawg

Re: Absolutely zero credit

Anonymous — Sun, 22 Jan 2017 22:39:06 GMT

Good job, @LessThan
We're missing something, friend

At this point it seems like you've now taken a few HPs, so I'm not as sure as some others about the whole put cash in and just get awarded an unsecured account.

We want to be very careful of your HPs at this point, because you've now mentioned Cap-1 and a FEW online lenders.

Now, all isn't lost...We just need very deliberate steps.
Are there any baddies on your profile, a collection or bad check or something?
Seems one of these places would have given a $300-$500 starter card but of as denials pile up, that can change.

Have you seen, what's listed on your reports with your own eyes?

Do you have any security deposit cash, that you can COMFORTABLY live w/o access to for at least a year?

Normally, something like Open Sky would not be on my top shelf of choices but from what I understand, they do report and you don't burn a HP

Again, I'm a SSL fan because generally it's a automatic approval w/o a HP
It builds a relationship with a lender that could lead to other banking and credit offers from that specific CU

There are too many CUs that will basically GIVE you either a secured CC or loan....

Look around this forum and you'll see more than one CU that will work with you....I don't like just saying your local CU because it sends the wrong message.

Simply because w/o prior knowledge and a referral IMO the 'local' CU can be so wildly left or right of center...We just can't send folks into their local place without context cause these ppl seem very nice but many can be very over conservative and NOT have the friendliest products.

Many times the Apr looks, great and the lady is smiling...Then they use some crazy metrics or charge some stupid fees...

One would do themselves, looking around this forum and or others to know EXACTLY who runs what and how products work.

Example, if a person has zero money for deposit there is a loan called credit builder...Where they lend the money, immediately put it in an account and you get access AFTER to term is up (kinda like a forced savings, negating the need to bring security funds to the table) however the term credit builder doesn't mean exactly the same thing at every institution.

*As for your question about the term of the loan, if you took a look at the SSL you'll see how to manipulate a more favorable score by leaving the loan open longer strategically but without real debt.

Plus considering that the paid off but positive account stays on your profile for 10 years, it means a loan paid off in a year lingers positively for 11 years while a 4 year loan lingers 14...

Plus the little nuisance payment is smaller...In today's world this is pretty easy because the computers allow us to just set this stuff up like a video game spreadsheet and let it PLAY...

Btw, do you have family that would allow you on an established account as an AU (of course prefect payment history and low debt ratio, or it's no good)
The family member would not even need to give you a card just adding for reporting purposes only...it could give you a leg up, if not no biggie, just a thought if you had access.

Re: Absolutely zero credit

Anonymous — Tue, 24 Jan 2017 04:42:00 GMT

So much good information and things to think about,,,! Thanks guys!

@Gemini- I did the prequalify thing for like 5 banks and as I understand it, that process is only a soft pull. The card I actually did a full application on is CapOne Secured, thinking they would absolutely approve me if I have a deposit in hand... I was wrong. I've tried to pull my report with Credit Karma as well as Discover's credit program and they both said I had too thin of a file and the only thing they could report on is my name, address, and employer. As far as the credit union thing, I already started looking at reviews on CUs and I have it narrowed down to Delta Community CU, Georgia's Own CU, or State Department CU.

Re: Absolutely zero credit

Anonymous — Tue, 24 Jan 2017 05:11:57 GMT

@Anonymous wrote:
So much good information and things to think about,,,! Thanks guys!

@Anonymous- I did the prequalify thing for like 5 banks and as I understand it, that process is only a soft pull. The card I actually did a full application on is CapOne Secured, thinking they would absolutely approve me if I have a deposit in hand... I was wrong. I've tried to pull my report with Credit Karma as well as Discover's credit program and they both said I had too thin of a file and the only thing they could report on is my name, address, and employer. As far as the credit union thing, I already started looking at reviews on CUs and I have it narrowed down to Delta Community CU, Georgia's Own CU, or State Department CU.

That is the unfortunate thing about having a -0- score I went took a quick peek at the offerings of the CUs you mentioned I would immediately narrow it down to Delta or Georgia's own based on the availability of student or young adult credit card, I may have missed if you said if you were a student or not but it does look like the nice thing about the Delta Community CU credit card is that you qualify regardless of whether or not you are a student, they also have some decent checking options and received an A+ health rating from a deposit to loan account ratio. So personally I would establish a relationship with Delta but I do not believe you would be wrong in choosing one over the other, only you can decide what is best, but getting a credit card seemed very high on the list of priorities and rightly so!

Re: Absolutely zero credit

Anonymous — Tue, 24 Jan 2017 09:00:17 GMT

Agreed the prequals
Can be tricky because
1) They are marketing devices to simulate apps
And some NOTHING more than slick commercials, period. While others set the criteria way way wide to again simulate apps just to pimp stats..

Like military recruiters that have these kids bust their butts to make 'weight' only to find out once they get to boot camp that they are MILES away from a 'real' acceptable number and they get thrown right into 'pork chop' squad running all-day on half meals but I digress

2) It's a darn shame because the de facto message is 'try this one' when they don't have a card for you only to rack up denials... Horrible

This is how Standford and others report a 5% acceptance rate... Enticing folks with zero chance to app vs directing them to SAVE themselves the trouble.

I will say it again, nobody turns you down for a SSL and worse case scenario you will have a score and profile within 6 months, period.

Hell it's easier to get a car loan sometimes because there is security for the loan but again remember this isn't that big a deal you'll have Credit shortly I'm sure of it

Re: Absolutely zero credit

EAJuggalo — Tue, 24 Jan 2017 14:40:47 GMT

I would go with Gemini's plan but wait two months after the SSL before getting the cards. With the SSL and six months of having two secured cards, you should be able to get your choice of a wide variety of cards.

The credit union is the biggest thing. I don't know how your employer's card works but one that was available at my previous employer took a hefty chunk in fees. It was something like $2 every time you swiped the card to make a purchase.