topic Re: Hit a plateau... questions about authorized users? in Rebuilding Your Credit

Hit a plateau... questions about authorized users?

Anonymous — Tue, 25 May 2021 17:25:00 GMT

Long story short, I found myself in my early 30s with basically no credit. With seemingly no options, I took on pre-approved Credit One and First Premier cards for $300 and $425 CLs, respectively, and a Citi secured card with a $500 CL.

About 6 months later, I got the Chime Credit Builder card and a similar credit-building card, the latter of which actually reports as though it has a $1,500 CL.

I've been keeping my utilization around 20% for over 90 days and at this point, and my oldest card is the Citi one at 13 months. As of today, my credit score is around 710-TU/692-EX. Since 2/3 of my actual cards are awful, I'm really trying to get into a better credit card with a slightly higher limit so I can cancel the Credit One and First Premier cards without taking a hit on my total available CL. My ultimate goal is to get to somewhere in the 750-775 range so that I can start shopping auto loan rates. (No specific timeline for buying a vehicle, but it will definitely be the first thing I do with my credit once it reaches a certain level.)

Today, I applied for the following cards:

Discover It Cash Back (hard inquiry)
Citi Premier (hard inquiry)
Apple Card (soft inquiry)

Denied for all three.

I've been in the Path to Apple Card Program for about two weeks so I expected to get declined there because I hadn't yet reached the recommended 4 months of additional payment history that the program told me I needed. I really just applied because they always give clear reasons for denials and I figured that whatever Apple told me would apply to the Discover and Citi cards too.

From what I can tell, the biggest thing holding me back is that I only have 13 months of credit history with my AAoA being 9 months. Basically, it sounds like I'm going to have to stay in a holding pattern for a while longer before trying again. But I'm wondering if there's something I can do in the meantime...

My boyfriend has two cards with multiple years of positive payment history. One is with Credit One (he's had it for a long time so even though it's not a great card, he's reluctant to cancel and lose the payment history) for 4-5 years and the other is an Ashley Furniture card through Synchrony that he's had for roughly the same amount of time.

I've done some Googling and my understanding is that Credit One doesn't report authorized users. From what I read, only married partners who get added as authorized users will have the card reported, and obviously, my boyfriend and I aren't married. However, it sounds like the Ashley Homestore/Synchrony card will report for any authorized user, even if we're not married.

So my question is... does anyone have experience with the Ashley card or with Synchrony cards? Would it benefit me to be an authorized user on my boyfriend's card? If he did add me, would I get credit for the amount of time he had the card before I was added? Or would I only get credit starting from the point I was added?

Any insights are much appreciated.

Re: Hit a plateau... questions about authorized users?

mycreditscoreisfair — Thu, 20 May 2021 17:39:19 GMT

I can't speak for Ashley/Synchrony but I was added as an authorized user on my now wife's (then girlfriends) Discover card and the entire history of the card was added to my credit report. It took around 60 days before it showed up on any of the bureaus though and I assume that's because of the anti-abuse metrics they use to make sure it's legitimate.

Most major credit cards have preapproval tools that you can use to see if you qualify before they do a hard pull. I would look into those, specifically with Capital One.

Re: Hit a plateau... questions about authorized users?

Anonymous — Thu, 20 May 2021 17:44:58 GMT

I tried to prequalify with every major company to no avail, unfortunately.

The fact that you benefited from the entire lifetime of your wife's Discover card is definitely good to hear. Hopefully, it works that way for Synchrony too.

Re: Hit a plateau... questions about authorized users?

mycreditscoreisfair — Thu, 20 May 2021 18:05:07 GMT

@Anonymous wrote:
I tried to prequalify with every major company to no avail, unfortunately.

The fact that you benefited from the entire lifetime of your wife's Discover card is definitely good to hear. Hopefully, it works that way for Synchrony too.

Did Discover or Capital One offer you a secured card? It may be easiest to go that route and wait for it to graduate. I believe Discover can graduate around 7 months and Capital One after 5.

Re: Hit a plateau... questions about authorized users?

Anonymous — Tue, 25 May 2021 17:27:02 GMT

Capital One isn't really an option right now as I am fairly certain I was blacklisted. Every now and then, I try to prequal to see if they'll give me another shot but it's not happened yet.

Didn't get offered the Discover secured today, but I'm thinking about giving them a call to see if maybe I might get a different answer from a real person.

Re: Hit a plateau... questions about authorized users?

USMC_Winger — Thu, 20 May 2021 23:02:50 GMT

@Anonymous wrote:

I've been keeping my utilization around 20% for over 90 days and at this point, and my oldest card is the Citi one at 13 months. As of today, my credit score is around 710-TU/692-EX. Since 2/3 of my actual cards are awful, I'm really trying to get into a better credit card with a slightly higher limit so I can cancel the Credit One and First Premier cards without taking a hit on my total available CL. My ultimate goal is to get to somewhere in the 750-775 range so I can start looking at competitive auto loan rates.

Bump your FICO scores up ~10 to 20 FICO points with the "All Zero Except One" (AZEO) method by choosing one national bankcard (VISA, M/C, AMEX, and Discover) with a credit limit below $31,000 (and isn't a charge card or Chase CC) to report a balance of $100 or less AND have all the other credit cards (revolving/open-ended accounts) report $0 balances. Also ensure that the balance reported on your chosen bankcard is less than 29% of that card's CL and less than 9% of the aggregate CL of all your revolving/open-ended credit accounts. Pay off the one reported balance after it reports but before the due date, and you won't pay any CC interest.

If you DON'T already have at least one open installment loan, bump your scores up 15 to 35 FICO points with the SSL Technique. Alternatively, if you already have installment loans (open or closed), then you already have your points for installment loan credit mix. The gain will be much less, but you can boost your scores the most by paying down the loan balances to below 9% utilization (in aggregate) of the aggregate original loan amounts for your open loans.

I highly recommend these methods. I started from scratch and did AZEO with 2 CCs (1 secured) and the SSL Technique. With AoOA at 9 months and AAoA at 5 months, my average FICO 8 score was 760 and my TU FICO 8 was 744. I checked online and was pre-approved for an unsecured Discover IT Cash Back card with 20.99% APR. (Discover evaluates the TU CR for unsecured CCs.) I didn't apply for the card, because I have such a short credit history. I want my current accounts to age some more. The 20.99% APR tells me that they consider me to be high risk. (The card's APR ranges from 11.99% ot 22.99%.)

I've been in the Path to Apple Card Program for about two weeks so I expected to get declined there since I hadn't yet reached the recommended 4 months of additional payment history that the program told me I needed. I really just applied because they always give clear reasons for denials and I figured that whatever Apple told me would apply to the Discover and Citi cards too.

Excellent strategy. You'll find that excellent credit requires both strategy and a lot of patience. If you'd applied for the Apple card first and found out the reasons for the denial, you could have saved yourself 2 HPs. But both Discover and Citi will soon notify you with their reasons for denials, so you'll learn if they have additional reasons for denial.

At least 12 months of perfect payment history is recommended before applying for second-tier CCs, so you waited the minimum before applying for the Discover card. I don't know what Citi's minimum credit history is for the Citi Premier.

My boyfriend has two cards with multiple years of positive payment history. One is with Credit One (he's had it for a long time and doesn't want to cancel and lose the payment history) for 4-5 years and the other is an Ashley Furniture card through Synchrony that he's had for roughly the same amount of time.

When your boyfriend closes his Credit One card, it will stay on his CRs for up to 10 years. It will continue to factor into FICO scoring for payment history, AoOA, and AAoA all that time. He should replace it with a better card, of course, before he closes his Credit One card.

I've done some Googling and my understanding is that for the most part, the Credit One card doesn't report for authorized users. I saw something about how only married partners who are added as authorized users will have the card reported, which would be a downer because my boyfriend and I aren't married. However, from everything I've read, it sounds like the Ashley/Synchrony card would report for an authorized user even if we're not married.

Even if the AU account reports on your CR, FICO 8 and 9 have anti-abuse algorithms to ignore some AU accounts in scoring. The best chance of an AU account not being ignored is when the primary account holder and the AU have the same last name (family member) and/or live at the same address (household member).

Any insights are much appreciated.

From my research, Citi's secured card is a little more difficult to graduate to unsecured than other major lenders. Citi evaluates the account for graduation once every 6 months, starting at 12 months. One of the recommendations is to avoid any new accounts or inquiries for the last 6 to 12 months prior to graduation. Citi checks the EX CR for CC applications, but I don't know if they also check other CRs like Chase and AMEX do for other new accounts.

Re: Hit a plateau... questions about authorized users?

Anonymous — Thu, 20 May 2021 23:27:51 GMT

Thanks for your amazing response! VERY enlightening and helpful.

Never heard of the AZEO technique, but it makes perfect sense. I currently have a very low balance on all three of my cards so it won't take but maybe $300 to pay them down to zero. Which do you recommend I hold the balance on? I assume the Citi is probably the best option since I could put $100 on that card and it would be at 20% utilization. Currently, I'm showing a maximum CL of $2,725 between all my cards, so having $100 on the Citi card would put my overall utilization at under 4%.

Never heard of share secured loans... do you have a recommendation as to which bank I should use for that? I know the interest is going to be small since it's a secured loan, but I'd like to use a reputable bank on the off chance that I'd potentially want to use their other services. Also, I don't have any installment loans on my report at all... do you think I'd still stand to gain 15-35 points?

My boyfriend and I have different last names, but we do have the same physical address. Do you think I'd benefit from him adding me to his Synchrony card as an authorized user?

Re: Hit a plateau... questions about authorized users?

USMC_Winger — Fri, 21 May 2021 04:18:42 GMT

@Anonymous wrote:
Which do you recommend I hold the balance on? I assume the Citi is probably the best option since I could put $100 on that card and it would be at 20% utilization. Currently, I'm showing a maximum CL of $2,725 between all my cards, so having $100 on the Citi card would put my overall utilization at under 4%.

Your Citi card is perfect.

Never heard of share secured loans... do you have a recommendation as to which bank I should use for that?

Very few financial institutions meet the criteria. Navy Federal Credit Union is my top pick, then Pentagon Federal Credit Union, and Alliant Credit Union. (Alliant now uses an unsecured loan.) You can see others listed in messages # 2 and # 4 of the "Quest for an SSL alternative to Alliant" thread.

Also, I don't have any installment loans on my report at all... do you think I'd still stand to gain 15-35 points?

With zero installment loans now, I expect you'd see close to the top end, 35 points. I did.

Keep in mind that as soon as your auto loan is added to your CR, it's going to report at 100% utilization, thereby increasing your aggregate installment loan utilization way above your ideal "under 9%" threshold, resulting in lower FICO scores.

My boyfriend and I have different last names, but we do have the same physical address. Do you think I'd benefit from him adding me to his Synchrony card as an authorized user?

Yes, it might, but I don't think you need the potential hassle. Let's say the anti-abuse algorithm doesn't ignore the AU account. If he pays that CC down so it reports $0, you will see the AU "All Zero" (AZ) penalty (~10 to 20 FICO point loss). It's a store card, not a bankcard, so even if it reports a small balance, the scoring algorithm may not count it as a revolving account, which gives you an AU AZ loss. (Likewise, if all of your own revolving accounts report $0 for the month, you would also see an additional AZ penalty.) If that AU account carries a large balance, your FICO scores will suffer until he pays the balance down.

Now, if he had a CC that was 20 years old, a high CL, and a perfect payment history, it might be worth it until your own FICO scores pass 780 (threshold for "excellent credit" for the best interest rates). Otherwise, not worth it. You can get there on your own. If you want an idea of how quickly you can do that, my EQ FICO 8 hit 782 in 9 months by using AZEO and the SSL Technique and zero inquiries. My lowest FICO 8 score was TU, 744, with 3 inquiries. I think it will take at least a year for that one to pass 780.

Re: Hit a plateau... questions about authorized users?

rmduhon — Fri, 21 May 2021 04:16:07 GMT

First question is where are you getting your scores from? The reason I'm asking is they might not be actual FICO scores depending on where you are getting them from.

Re: Hit a plateau... questions about authorized users?

Anonymous — Fri, 21 May 2021 04:29:47 GMT

Do I need to be a member or veteran of the armed forces to get an account at Navy Federal? Also, do I need to be an accountholder to get a share secured loan there?

Re: Hit a plateau... questions about authorized users?

Anonymous — Fri, 21 May 2021 04:30:54 GMT

@rmduhon wrote:
First question is where are you getting your scores from? The reason I'm asking is they might not be actual FICO scores depending on where you are getting them from.

Credit Karma and a couple of the apps I use to manage my card accounts provide credit scores.

Re: Hit a plateau... questions about authorized users?

rmduhon — Fri, 21 May 2021 05:17:39 GMT

You can ignore the scores from Credit Karma. Those are Vantage scores not FICO scores and can be way off from FICO scores.

Re: Hit a plateau... questions about authorized users?

USMC_Winger — Fri, 21 May 2021 07:15:14 GMT

@Anonymous wrote:
Do I need to be a member or veteran of the armed forces to get an account at Navy Federal?

That's the easiest way, because you'd have your military ID card or DD-214 handy (or know where to get a copy).

You are also eligible to join if you are in the enlisted military Delayed Entry Program or a military officer candidate program. Or if you are either a U.S. government employee working for the Dept. of Defense (DoD) or a civilian working for a DoD contractor and assigned to a DoD facility. Or if you are a DoD civilian retiree. Or if a close family member (spouse, parent, grandparent, sibling, child, or grandchild) served in the armed forces or is already a member of Navy Fed. Or if a member of your household served in the armed forces or is already a member of Navy Fed.

Also, do I need to be an accountholder to get a share secured loan there?

Yes.

Re: Hit a plateau... questions about authorized users?

Anonymous — Fri, 21 May 2021 17:29:28 GMT

I have a grandparent who used to be a member of the armed forces although I'm not sure which branch (and he passed away so I can't ask). Would I just need to provide his name?

I put in an application at NASA Federal Credit Union since it seems like they have SSLs and am waiting on a response currently.

Re: Hit a plateau... questions about authorized users?

USMC_Winger — Fri, 21 May 2021 22:08:26 GMT

@Anonymous wrote:
I have a grandparent who used to be a member of the armed forces although I'm not sure which branch (and he passed away so I can't ask). Would I just need to provide his name?

Normally, you would need to provide his name and copies of his DD-214, your birth certificate, and your parent's birth certificate as proof of his military service and your family relation. However, most people don't own copies of other people's DD-214s, so they request a copy from the U.S. Government's military service records at the National Archives. Unfortunately, due to the COVID-19 pandemic, the National Personnel Records Center (NPRC) is closed, except for emergencies. Navy Fed has been processing memberships without DD-214s with the expectation that a DD-214 will be provided in the future when the NPRC re-opens for business. I expect the backlog to be at least 1.5 years, but it's a government bureaucracy so that time period could easily double -- or triple. If the DD-214 (or other proof of military service if his military records were lost in the 1973 NPRC fire) is not provided by the Navy Fed member at some undetermined future date, the member's account will be closed.

If you don't have a copy of your grandfather's DD-214 (understandable), you may be able to get a copy of it from the County Clerk in the county of his "Home of Record" (usually his home address listed on his DD-214). If he was a California veteran, he could have opted to have one of his DD-214 Member Copies sent to CalVet upon his discharge from active service. If so, you or his spouse may be able to request a copy from CalVet.

I put in an application at NASA Federal Credit Union since it seems like they have SSLs and am waiting on a response currently.

Good luck with that. I applied for membership at NASA Federal Credit Union, and all I got was a denial, a hard inquiry on my EQ CR, and an invitation to apply in person at a branch in Washington, D.C. Everyone else has reported only a soft inquiry on their EX CR. I'll see how much damage that did to my 782 FICO 8 score in 2 weeks.

Re: Hit a plateau... questions about authorized users?

Anonymous — Fri, 21 May 2021 23:57:39 GMT

So I called Navy Federal today and the lady on the phone (who was EXTREMELY nice) didn't even ask for my grandfather's name. She said something in the beginning about how there was a "possibility" that I'd need to provide some sort of DoD214 document (or whatever it was called), "especially if I get denied for the account." But that never came up. She gave me the number I can give out to family members for referrals and was explaining all the great services they offer that I can take advantage of right away. I was kind of surprised how easy it was. Is it possible they have some way of looking up my relatives to determine if anyone is a member of the armed forces? I legitimately have a relative who was in the Air National Guard so I have no doubts about my legitimacy as someone who can have a Navy Federal account, but I find it odd that she never explained or even mentioned that they could come back months and months later requiring proof of my grandfather's tenure in the armed forces or they'd close my accounts. That just sounds like something they'd need to be very upfront about.

Re: Hit a plateau... questions about authorized users?

Anonymous — Sat, 22 May 2021 00:26:14 GMT

Also, I was hoping you could explain SSLs a bit more to me because I was thinking about it today and I’m not entirely sure I’m understanding how it works.

From what I can see, the SSL is secured by a savings account where the balance of the account is the amount of the loan, and you’re basically making payments that “unlock” part of the balance equivalent to the amount of the payment. But wouldn’t you end up losing money? Because if the the secured balance is your money and you’re making payments to unlock it, then it’s basically like all your payments are canceled out in the process of unlocking the secured balance. In short, if it’s a $500 secured loan and you’re making $500 dollars worth of payments to unlock it, then aren’t you basically losing $500?

Re: Hit a plateau... questions about authorized users?

AllZero — Sat, 22 May 2021 00:31:58 GMT

@Anonymous wrote:
Also, I was hoping you could explain SSLs a bit more to me because I was thinking about it today and I’m not entirely sure I’m understanding how it works.

From what I can see, the SSL is secured by a savings account where the balance of the account is the amount of the loan, and you’re basically making payments that “unlock” part of the balance equivalent to the amount of the payment. But wouldn’t you end up losing money? Because if the the secured balance is your money and you’re making payments to unlock it, then it’s basically like all your payments are canceled out in the process of unlocking the secured balance. In short, if it’s a $500 secured loan and you’re making $500 dollars worth of payments to unlock it, then aren’t you basically losing $500?

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant

From SouthJamaica
NFCU SSL

From adrianaesque
Approved NFCU SSL - with detailed steps (May 2020)

Here are two institutions that have SSL which you can pay in advance to 8.9% utilization without shortening loan term:
NFCU - membership restrictions.
SSFCU - geofence.

Re: Hit a plateau... questions about authorized users?

USMC_Winger — Mon, 24 May 2021 19:06:25 GMT

@Anonymous wrote:
So I called Navy Federal today and the lady on the phone (who was EXTREMELY nice) didn't even ask for my grandfather's name. She said something in the beginning about how there was a "possibility" that I'd need to provide some sort of DoD214 document (or whatever it was called), "especially if I get denied for the account." But that never came up.

The "possibility" is when your account is eventually audited, and you'll be required to provide your grandfather's DD-214 and two birth certificates to prove family lineage. Since the NPRC is closed for regular business for the foreseeable future, Navy Fed is taking you at your word that you are eligible. Keep an eye on that link I gave you, and when the NPRC opens for regular business, request your grandfather's DD-214 so you have it when your account is eventually audited. Also, have a copy of your and your parent's birth certificates available for that future audit.

Is it possible they have some way of looking up my relatives to determine if anyone is a member of the armed forces?

Navy Fed would need access to a genealogical database of all U.S. service members for that to happen. I doubt one exists. For now, they're just taking your word for it that you're eligible, because almost everyone who applies actually is eligible.

I legitimately have a relative who was in the Air National Guard so I have no doubts about my legitimacy as someone who can have a Navy Federal account, but I find it odd that she never explained or even mentioned that they could come back months and months later requiring proof of my grandfather's tenure in the armed forces or they'd close my accounts. That just sounds like something they'd need to be very upfront about.

They're probably assuming that new members know how credit unions work. Credit union membership is limited to what's listed in the charter, and when new members' accounts are audited and determined not to be eligible for membership, their accounts are automatically closed. Even if the Navy Fed CSR didn't fully explain this to you, you got the warning here, so you are armed with the requisite knowledge and can prepare for the future audit, whenever it happens.

Re: Hit a plateau... questions about authorized users?

Anonymous — Mon, 24 May 2021 19:13:15 GMT

Gotcha. I guess I'll work on getting my hands on my grandfather's DoD paperwork just so I'm ready for this if it eventually happens.

Side note, I prequalified for the Navy Federal American Express and decided to pull the trigger. I noticed you have a a few Navy Federal cards yourself, so I was curious... how long have you had their AmEx? Have you gotten any CLIs in that time? If so, are the CLIs automatic or did you have to request them? And in your experience, is the AmEx the best of the NF cards? Or is there another that you recommend more?