topic Re: Four cards - what’s next? in Rebuilding Your Credit

Four cards - what’s next?

Anonymous — Sat, 09 Apr 2022 19:29:20 GMT

So I started building credit in January 2022 - applied for CapOne QS One and approved for 300 SL. Someone suggested I apply for Apple Card and was approved for that in Feb - 2K SL. This month, I applied for Discover IT and was approved with 500 SL and GM Rewards (Goldman Sachs), which approved me for 7K. I'm assuming GM Rewards was a much larger SL due to heavy Apple Card use since receiving it in Feb. this year.

I do not yet have an Experian FICO8 score because I do not have six months of credit history. I do have a FICO8 for Equifax and Transunion, 745 and 784, respectively.

Again, this is a building - not so much rebuilding - of credit history because I never had credit in my name before. I have a great job - over 200K annually and no collections or bad marks on my report. It was just blank prior to Jan. 2022. Should I add attempt to add anything else at this time? Or just leave things as they are? If the latter, for how long? Also, should I be carrying any kind of balance on these cards - if yes, does carrying a balance mean allowing a balance to report and paying it off before the due date?

Thank you in advance for any advice/suggestions - on the above or otherwise.

Re: Four cards - what’s next?

HowDoesThisAllWork — Sat, 09 Apr 2022 20:13:03 GMT

@Anonymous wrote:
So I started building credit in January 2022 - applied for CapOne QS One and approved for 300 SL. Someone suggested I apply for Apple Card and was approved for that in Feb - 2K SL. This month, I applied for Discover IT and was approved with 500 SL and GM Rewards (Goldman Sachs), which approved me for 7K. I'm assuming GM Rewards was a much larger SL due to heavy Apple Card use since receiving it in Feb. this year.

I do not yet have an Experian FICO8 score because I do not have six months of credit history. I do have a FICO8 for Equifax and Transunion, 745 and 784, respectively.

Again, this is a building - not so much rebuilding - of credit history because I never had credit in my name before. I have a great job - over 200K annually and no collections or bad marks on my report. It was just blank prior to Jan. 2022. Should I add attempt to add anything else at this time? Or just leave things as they are? If the latter, for how long? Also, should I be carrying any kind of balance on these cards - if yes, does carrying a balance mean allowing a balance to report and paying it off before the due date?

Thank you in advance for any advice/suggestions - on the above or otherwise.

@Anonymous

I would bet that you have the Equifax and Transunion scores from CreditKarma. Please do not get this wrong, but those are NOT FICO scores of any type. Those, specifically, are VantageScore 3.0 Scores.

FICO does take about six months and then you will see all three.

Seems like you are on a good start and a good path.

One thing to ask: the Capital One - is that a secured card? The $300 CL is a giveaway for either a Secured Card or a Bucketed Card. If it is NOT a secured card, then be aware that it is highly likely that you will struggle to see any "improvements" on this card (with "improvement" being defined as any CLIs - Credit Line Increases - or any other terms - such as Interest Rate). This is a well-known 'tactic' by Capital One.

The suggestion here is to wait for seven or eigth months and then apply for another Capital One credit card (if - and only if) you are so inclined.

Other than that, welcome to the Forum and it sounds like you are off to a really good start.

Re: Four cards - what’s next?

HowDoesThisAllWork — Sat, 09 Apr 2022 20:32:48 GMT

@Anonymous wrote:
So I started building credit in January 2022 - applied for CapOne QS One and approved for 300 SL. Someone suggested I apply for Apple Card and was approved for that in Feb - 2K SL. This month, I applied for Discover IT and was approved with 500 SL and GM Rewards (Goldman Sachs), which approved me for 7K. I'm assuming GM Rewards was a much larger SL due to heavy Apple Card use since receiving it in Feb. this year.

I do not yet have an Experian FICO8 score because I do not have six months of credit history. I do have a FICO8 for Equifax and Transunion, 745 and 784, respectively.

Again, this is a building - not so much rebuilding - of credit history because I never had credit in my name before. I have a great job - over 200K annually and no collections or bad marks on my report. It was just blank prior to Jan. 2022. Should I add attempt to add anything else at this time? Or just leave things as they are? If the latter, for how long? Also, should I be carrying any kind of balance on these cards - if yes, does carrying a balance mean allowing a balance to report and paying it off before the due date?

Thank you in advance for any advice/suggestions - on the above or otherwise.

@Anonymous

The general concept is to keep the reported balances below 30% of your credit line.

As you likely know, your FICO Scores consist of several categories. Credit Utilization and Payment History represent 65% of your FICO Score (30% and 35%, respectively). So, credit utilization (the thing that we are discussing here) is really key.

So, with the Discover IT card with the $500 Credit Line, you would want Discover to report no more than $150.

Better yet, is to keep the reported balances below 10% of your credit line.

So, again, with the Discover IT card and its $500 Credit Line, you would want Discover to report no more than $50.

So, I specifically stated "reported balances below....". What does that mean, exactly?

This is a question that causes a fair | good amount of confustion.

The balance on each of your revolvers is reported to the three CRAs (Credit Reporting Agencies) on the "Billing Statement Closing Date". Or, whatever each of the creditors calls it. For example, Discover calls it "Statement Closing Date" while American Express calls it "Closing Date" and Capital One calls it "Billing Cycle".

Whatever that day is for each of your revolvers is THE DAY you want to know (well, along with the Due Date - which is something totally different from the "Billing Statement Closing Date").

This is something that changes each month, too. EDIT: to be clear, not the Statement Closing Billing Date......talking specifically about the amount reported to the three CRAs. Meaning, whatever is reported this month is "updated/replaced" by what is reported next month. I hope that is a good way to explain things. One thing on this point to keep in mind, however, is that with the much newer FICO models (specifically, 10 and 10T) it looks like "trending" is taken into account so be aware of that.

I tend to stop using a credit card three or four days prior to the Statement Closing Billing Date and to make a payment to "massage" what said revolver reports to the three CRAs. It is not something that you need to do, but it is something that a fair number of people do. I do not have but a few credit cards so it is something that - for me - is really easy to manage. It feels like it COULD be something useful for you (but, ultimately, YOU decide that).

In order to avoid Interest Charges you would then need to pay of the "reported balance" by the Due Date.

Does this help? Or did I raise more questions for you?

Re: Four cards - what’s next?

Anonymous — Sat, 09 Apr 2022 20:31:19 GMT

Thank you very much, @HowDoesThisAllWork

I signed up for Experian IdentityWorks Premium and the scores I referenced in my original post are what I see for EQ and TU and they say FICO8. They are different from my Vantage scores on CK.

In researching, I found Experian requires six months of active credit history but the other two bureaus do not. This is all so confusing - I a would not be surprised if I'm mistaken. I tried to add screenshots but can't figure out how to add photos.

My Capital One card is not secured- so after 7-8 months, apply for another card and close this bucketed card?

Re: Four cards - what’s next?

Anonymous — Sat, 09 Apr 2022 20:37:50 GMT

@HowDoesThisAllWork wrote:
@Anonymous wrote:
So I started building credit in January 2022 - applied for CapOne QS One and approved for 300 SL. Someone suggested I apply for Apple Card and was approved for that in Feb - 2K SL. This month, I applied for Discover IT and was approved with 500 SL and GM Rewards (Goldman Sachs), which approved me for 7K. I'm assuming GM Rewards was a much larger SL due to heavy Apple Card use since receiving it in Feb. this year.

I do not yet have an Experian FICO8 score because I do not have six months of credit history. I do have a FICO8 for Equifax and Transunion, 745 and 784, respectively.

Again, this is a building - not so much rebuilding - of credit history because I never had credit in my name before. I have a great job - over 200K annually and no collections or bad marks on my report. It was just blank prior to Jan. 2022. Should I add attempt to add anything else at this time? Or just leave things as they are? If the latter, for how long? Also, should I be carrying any kind of balance on these cards - if yes, does carrying a balance mean allowing a balance to report and paying it off before the due date?

Thank you in advance for any advice/suggestions - on the above or otherwise.
@Anonymous

The general concept is to keep the reported balances below 30% of your credit line.

As you likely know, your FICO Scores consist of several categories. Credit Utilization and Payment History represent 65% of your FICO Score (30% and 35%, respectively). So, credit utilization (the thing that we are discussing here) is really key.

So, with the Discover IT card with the $500 Credit Line, you would want Discover to report no more than $150.

Better yet, is to keep the reported balances below 10% of your credit line.

So, again, with the Discover IT card and its $500 Credit Line, you would want Discover to report no more than $50.

So, I specifically stated "reported balances below....". What does that mean, exactly?

This is a question that causes a fair | good amount of confustion.

The balance on each of your revolvers is reported to the three CRAs (Credit Reporting Agencies) on the "Billing Statement Closing Date". Or, whatever each of the creditors calls it. For example, Discover calls it "Statement Closing Date" while American Express calls it "Closing Date" and Capital One calls it "Billing Cycle".

Whatever that day is for each of your revolvers is THE DAY you want to know (well, along with the Due Date - which is something totally different from the "Billing Statement Closing Date").

This is something that changes each month, too. EDIT: to be clear, not the Statement Closing Billing Date......talking specifically about the amount reported to the three CRAs. Meaning, whatever is reported this month is "updated/replaced" by what is reported next month. I hope that is a good way to explain things. One thing on this point to keep in mind, however, is that with the much newer FICO models (specifically, 10 and 10T) it looks like "trending" is taken into account so be aware of that.

I tend to stop using a credit card three or four days prior to the Statement Closing Billing Date and to make a payment to "massage" what said revolver reports to the three CRAs. It is not something that you need to do, but it is something that a fair number of people do. I do not have but a few credit cards so it is something that - for me - is really easy to manage. It feels like it COULD be something useful for you (but, ultimately, YOU decide that).

In order to avoid Interest Charges you would then need to pay of the "reported balance" by the Due Date.

Does this help? Or did I raise more questions for you?

Thanks again, @HowDoesThisAllWork. This is so helpful. So I have yet to carry a balance on either Cap One or the Apple Card - I've used them both a lot but have paid them off in full every month.

So if I understand correctly, the "balance" I have on my card when the billing period closes - whether that is zero or 50 dollars - is what is reported to the credit bureaus and what is used in calculating my credit utilization rate? Thank you again for taking the time to respond - this is all really helpful.

Re: Four cards - what’s next?

HowDoesThisAllWork — Sat, 09 Apr 2022 20:44:09 GMT

@Anonymous wrote:
Thank you very much, @HowDoesThisAllWork

I signed up for Experian IdentityWorks Premium and the scores I referenced in my original post are what I see for EQ and TU and they say FICO8. They are different from my Vantage scores on CK.

In researching, I found Experian requires six months of active credit history but the other two bureaus do not. This is all so confusing - I a would not be surprised if I'm mistaken. I tried to add screenshots but can't figure out how to add photos.

My Capital One card is not secured- so after 7-8 months, apply for another card and close this bucketed card?

Good afternoon!

This whole thing regarding Credit is totally confusing. What makes it even more confusing is that there is so much "bad" information out there. And, misleading information.

Experian has - in my opinion - a really good service. For full disclosure, I subscribe to their service. I like it.

Regarding the screen shots - you will NOT be able to do that until you make some more posts. Specifically, until your "status/rank" changes. Once that happens, you will see an "Insert/Edit Link" and an "Insert Photos" link (in the toolbar where you see the "B" and the "I" and the "U"...just look a few over to the right and you will see those two (you will NOT at this point...but you eventually will if you continue to make posts and to reply).

Regarding the Capital One card.....waiting and then applying for another one would be the thing to do IF you had a reason to do so. But I fear that the $300 Credit Line card - as mentioned - is "bucketed". So, if you had a legit need for a "more useful" Capital One credit card - then, yes. Maybe even wait a year. Totally depends on how you operate and what your needs are.

Keep in mind that Capital One makes a Hard Pull against all three CRAs (Experian, Equifax, Transunion). So, that is something to consider if you should be thinking about another credit card down the line. If you were to be approved for that second CapOne credit card, then keep in mind that it is one more credit card that you have in a very short period of time. Chase, which is a VERY popular creditor, has a so-called 5/24 Rule. That is their "rule" that if you have five newly opened accounts in the last 24 months then they will not approve you.

So, you might be better suited to investigate another credit card from another creditor in that six, seven, eight months time. Again, all depends on you.

Re: Four cards - what’s next?

Anonymous — Sat, 09 Apr 2022 20:47:42 GMT

Figured out how to insert these photos! This is what I'm seeing, @HowDoesThisAllWork - EQ and TU say Fico8 but are these legit?

ExperianEQTU

Re: Four cards - what’s next?

HowDoesThisAllWork — Sat, 09 Apr 2022 20:54:13 GMT

Thanks again, @HowDoesThisAllWork. This is so helpful. So I have yet to carry a balance on either Cap One or the Apple Card - I've used them both a lot but have paid them off in full every month.

@Anonymous

Yes! That is indeed what is used to determine the so-called credit utilization for each revolver (aka, credit card). So, you have a credit utilization for each individual credit card AND you have an overall credit utilization. The formula (and not being condesending here) is the amount reported / credit limit.

So, to continue with the Discover IT card....lets say that you have a $32 balance on the Statement Closing Date. Your credit utilization for that specific credit card is 32/500, or 6.4%. That would be really good.

To complete this thought, in order to avoid any interest charges on this card, you would need to pay off that $32 on or before the Due Date (which is roughly 25 days AFTER the Statement Closing Date).

And you are most welcome. This stuff is all really confusing. There is sooooooo much information.

If I might suggest, spend some time in this forum and then also in some of the others.

If I may, here are a couple of links that really helped me:

Thick Start (Rebuild | Build)

FICO SCORING PRIMER

I can not emphasis enough just how CRUCIAL the Scoring Primer is. It does an amazing job and breaking things down and explaining things so that even I can understand it.

Welcome to the Journey!

Re: Four cards - what’s next?

HowDoesThisAllWork — Sat, 09 Apr 2022 20:55:28 GMT

@Anonymous wrote:
Figured out how to insert these photos! This is what I'm seeing, @HowDoesThisAllWork - EQ and TU say Fico8 but are these legit?

ExperianEQTU

@Anonymous

TOTALLY LEGIT!

Re: Four cards - what’s next?

Anonymous — Sat, 09 Apr 2022 21:01:44 GMT

@HowDoesThisAllWork wrote:

Thanks again, @HowDoesThisAllWork. This is so helpful. So I have yet to carry a balance on either Cap One or the Apple Card - I've used them both a lot but have paid them off in full every month.

So if I understand correctly, the "balance" I have on my card when the billing period closes - whether that is zero or 50 dollars - is what is reported to the credit bureaus and what is used in calculating my credit utilization rate? Thank you again for taking the time to respond - this is all really helpful.

@Anonymous

Yes! That is indeed what is used to determine the so-called credit utilization for each revolver (aka, credit card). So, you have a credit utilization for each individual credit card AND you have an overall credit utilization. The formula (and not being condesending here) is the amount reported / credit limit.

So, to continue with the Discover IT card....lets say that you have a $32 balance on the Statement Closing Date. Your credit utilization for that specific credit card is 32/500, or 6.4%. That would be really good.

To complete this thought, in order to avoid any interest charges on this card, you would need to pay off that $32 on or before the Due Date (which is roughly 25 days AFTER the Statement Closing Date).

And you are most welcome. This stuff is all really confusing. There is sooooooo much information.

If I might suggest, spend some time in this forum and then also in some of the others.

If I may, here are a couple of links that really helped me:

Thick Start (Rebuild | Build)

FICO SCORING PRIMER

I can not emphasis enough just how CRUCIAL the Scoring Primer is. It does an amazing job and breaking things down and explaining things so that even I can understand it.

Welcome to the Journey!

Thank you again, @HowDoesThisAllWork! I will definitely spend some time in the forums and checking out the Thick Start and FICO Scoring Primer! I've been a lurker for a bit and there is a wealth of information here!

Re: Four cards - what’s next?

FireMedic1 — Sun, 10 Apr 2022 10:58:30 GMT

For now after 4 cards in 4 months. Time to garden for a year and start building a history with what you have now. More credit doesnt mean higher scores. For best scoring only have 1 card report <8.99% on statement date and then PIF. As time moves on bigger and better cards will come. Takes time but its doable. Congrats on what you got. Let them work in your favor for now.

Re: Four cards - what’s next?

Anonymous — Sun, 10 Apr 2022 16:02:45 GMT

@FireMedic1 wrote:
For now after 4 cards in 4 months. Time to garden for a year and start building a history with what you have now. More credit doesnt mean higher scores. For best scoring only have 1 card report <8.99% on statement date and then PIF. As time moves on bigger and better cards will come. Takes time but its doable. Congrats on what you got. Let them work in your favor for now.

Thanks, @FireMedic1. That is my plan - I carried a balance on my Apple Card, it was like, 50 bucks on the 2K limit and then paid it off after the statement published. I think that is what you mean? Please let me know, if not. I plan on doing the same thing with one card posting a tiny balance on statement and then paying off immediately.

Again, thank you everyone for your nuggets of wisdom and advice. It's truly unreal the wealth of info this site provides and I'm really glad I found it when I did.

Re: Four cards - what’s next?

HowDoesThisAllWork — Sun, 10 Apr 2022 23:39:51 GMT

@FireMedic1 wrote:
For now after 4 cards in 4 months. Time to garden for a year and start building a history with what you have now. More credit doesnt mean higher scores. For best scoring only have 1 card report <8.99% on statement date and then PIF. As time moves on bigger and better cards will come. Takes time but its doable. Congrats on what you got. Let them work in your favor for now.

I was going to mention AZEO (All Zero Except One) but made the choice not to do so. I beleive that it is investigated in the Scoring Primer so OP will see it there. But, yes - very good call!

Re: Four cards - what’s next?

FireMedic1 — Mon, 11 Apr 2022 09:42:17 GMT

@HowDoesThisAllWork wrote:
@FireMedic1 wrote:
For now after 4 cards in 4 months. Time to garden for a year and start building a history with what you have now. More credit doesnt mean higher scores. For best scoring only have 1 card report <8.99% on statement date and then PIF. As time moves on bigger and better cards will come. Takes time but its doable. Congrats on what you got. Let them work in your favor for now.

I was going to mention AZEO (All Zero Except One) but made the choice not to do so. I beleive that it is investigated in the Scoring Primer so OP will see it there. But, yes - very good call!

@HowDoesThisAllWork@Anonymous There are lovers of AZEO as myself. And those who could care less. We say Finances over FICO here. Right? So AZEO is just that. Finances. I have been AZEO since I hit 2 cards out of BK over 6 yrs ago. Never a dime paid in interest since. Theres the Finances. FICO's follow. To go from 560's to 750's at one point stayed a steady pace as time went by and the file grew. Scores go up. In turn thousands of dollars made with CB and other perks were gained. Although some who dont believe in AZEO. Its like oh I got the greatest cashback card now. Yay! But carry a balance and pay interest. Well see ya cashback. It just went to help pay your interest. So what was gained? I am a business named FM1. I want profit for my business. Not losses. I've messed with the sweet spot for AZEO and 5% is my sweet spot. Might be +/- a few points for others. And of course as usual. YMMV. But it has worked well for myself. In a way. I practice what I preach.