topic Re: How many accounts enough to build credit? in Rebuilding Your Credit

How many accounts enough to build credit?

MarkyB — Sat, 26 Mar 2022 22:48:38 GMT

What's up guys. I'm new to this forum. I have just begun rebuilding my credit. So long story short, I opened a bunch of cards when I turned 18 and eventually they all got charged off within a year. Now 13 years later, after having no credit action whatsoever, I want to start building it for a auto loan I plan on applying for sometime next year.

My credit report has no history. I don't even have any scores on my experian and equifax reports. My transunion has a score of 524. I do have 1 collection on my report on my transunion and experian that is 6 years old and will drop off on 4/2023. That was from a family member I allowed to use my name for a capital one bank account which he screwed up. Last time I do that for anyone.

So I just applied to 3 secured cards; discover it, capital one platinum and Bank of America (which I have a checking account with). I got approved for the discover card instantly, capital one told me they are reviewing my info and will give me a decision within 7-10 days, and Bank of America flat out denied me.

I'm waiting on the denial letter from BoA to see their reasoning and I plan on calling to reconsider. I find it a bit ridiculous they deny a secured card application, especially with one of their banking customers. Hopefully capital one will approve me and the delay is simply ID verification.

I also got approved on a self credit builder account. So I will have a installment loan file on my credit report which will give me the credit mix many say is good to have.

So with all this said, will it be enough to build my credit with just the discover card and self installment builder if capital one denies me worst case and BoA doesn't budge off their decision? Or should I try getting a 2nd card elsewhere? And if Capital one does indeed approve me but BoA still doesn't. Should I just stick with the 2 cards and installment account? I already have 3 hard inquiries on my experian and only 1 on each of my transunion and equifax.

I appreciate the time anyone takes to read and respond to me. Any feedback would be great!

Re: How many accounts enough to build credit?

moto4man — Sun, 27 Mar 2022 00:15:12 GMT

Wait for the recon results. Don't open anymore cards until then. If you are denied on the recon, I would consider adding another card or revovler. Have you tried any local CU's? You'll have to make up a lot of ground to get a fair rate on that auto loan. But establishing a relationship with a local CU's may be in your best interest moving forward.

Re: How many accounts enough to build credit?

MarkyB — Sun, 27 Mar 2022 02:12:18 GMT

@moto4man wrote:
Wait for the recon results. Don't open anymore cards until then. If you are denied on the recon, I would consider adding another card or revovler. Have you tried any local CU's? You'll have to make up a lot of ground to get a fair rate on that auto loan. But establishing a relationship with a local CU's may be in your best interest moving forward.

thank you for your response.

I live in NYC I never dealt with credit unions. Don't even know of any honestly. Only regular banks which are on every other block in the city.

So what number of accounts should I aim for at the least? Is 2 cards and the self credit builder enough or should I aim for 3 cards and builder account?

I won't be applying for an auto loan for at least another 12 months, until my collection account drops off. I should (hope) have enough time to build a good score. I'm more concerned with getting approved for a loan rather than getting the best rate. I plan on paying the car off early regardless in 1-2 years tops. I'm looking for a $30,000 loan.

Re: How many accounts enough to build credit?

FireMedic1 — Sun, 27 Mar 2022 09:38:19 GMT

Its best to have 3 cards and have 1 report. Theres plenty of secured cards out there. Dont go with the vulture cards. Merrick bank will double your CL after so many months. TD Bank is another. Check this thread out. Good Luck.

https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Best-secured-credit-card/m-p/6351955#M647335

Re: How many accounts enough to build credit?

NaimeseOGK — Sun, 27 Mar 2022 11:43:13 GMT

@MarkyB I understand man. Im from New Jersey the north side that is close to NYC. Theres all banks there like Citi, Chase, TD, BOA. I couldn't find a credit union near me they are more in rural areas of NY state in your case. I just joined Penfed by becoming a member online. Ideally you would want 3 cards and a small personal loan which would give you a solid foundation for now to build.

Re: How many accounts enough to build credit?

MarkyB — Mon, 28 Mar 2022 07:32:13 GMT

@FireMedic1 wrote:
Its best to have 3 cards and have 1 report. Theres plenty of secured cards out there. Dont go with the vulture cards. Merrick bank will double your CL after so many months. TD Bank is another. Check this thread out. Good Luck.
https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Best-secured-credit-card/m-p/6351955#M647335

Thank you! When you say have 1 report, are you referring to the cards? Only letting 1 card hold a balance thru the statement cycle while paying off the others before they get reported?

Re: How many accounts enough to build credit?

MarkyB — Mon, 28 Mar 2022 07:45:42 GMT

@NaimeseOGK wrote:
@MarkyB I understand man. Im from New Jersey the north side that is close to NYC. Theres all banks there like Citi, Chase, TD, BOA. I couldn't find a credit union near me they are more in rural areas of NY state in your case. I just joined Penfed by becoming a member online. Ideally you would want 3 cards and a small personal loan which would give you a solid foundation for now to build.

Yeah I don't recall ever seeing or hearing about a CU around here. I'm not going to bother with it. I may end up applying for a Open Sky secured card if Bank of America doesn't approve my recon. I really don't want to open a card I don't see myself keeping but I may not have a choice. Open Sky is better than not having enough cards to build my score fast enough. And I don't want to risk more inquiries on my report applying for the TD and/or Citi secured cards when they may deny me like BoA did.

Hopefully capital one just needs me to send in documents as proof and will approve me. Just curious how the proof of income works? Do they simply need to see any proof of income or must you show them the whole annual amount on the application? Cuz less than half my annual income reported is in cash payments from private jobs so there's no paperwork on those funds obviously. I do have weekly pay stubs from my primary employment though.

Thank you!

Re: How many accounts enough to build credit?

FireMedic1 — Mon, 28 Mar 2022 08:36:56 GMT

@MarkyB wrote:
@FireMedic1 wrote:
Its best to have 3 cards and have 1 report. Theres plenty of secured cards out there. Dont go with the vulture cards. Merrick bank will double your CL after so many months. TD Bank is another. Check this thread out. Good Luck.
https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Best-secured-credit-card/m-p/6351955#M647335
Thank you! When you say have 1 report, are you referring to the cards? Only letting 1 card hold a balance thru the statement cycle while paying off the others before they get reported?

Yepper

Re: How many accounts enough to build credit?

MarkyB — Wed, 30 Mar 2022 18:14:03 GMT

Some good news, I got a letter from capital one today to call a specific number to verify my identity. I simply had to send them a photo of my drivers license and then I got approved right away for the secured platinum (I didn't bother applying for the secured quicksilver worrying I would get denied). $99 deposit with a $200 limit.

So that makes 2 cards open so far. I'm still waiting on Bank of America to let me know why I got denied.

Re: How many accounts enough to build credit?

FireMedic1 — Wed, 30 Mar 2022 20:54:10 GMT

Congrats! Baby steps for now. You'll get there.

Re: How many accounts enough to build credit?

MarkyB — Thu, 31 Mar 2022 02:08:16 GMT

@FireMedic1 wrote:
Congrats! Baby steps for now. You'll get there.

Thank you! I appreciate you!

I definitely want to open a 3rd card right away. I actually had an idea but not sure how viable it is. I'm thinking of calling capital one and asking if I can apply for the secured quicksilver card without pulling my credit again since they just did last week. I would love to get approved for that card as well since I would keep both capital one cards long term well after they graduate. The only other option it seems would be to go with Open Sky but I would definitely close that card once I've built enough credit to open something else hence why I'm trying to avoid it altogether if possible.

Re: How many accounts enough to build credit?

lns1976 — Thu, 31 Mar 2022 14:53:45 GMT

I would wait before doing anything. I opened my now closed Capital One Platinum Secured in July of 2017, by March 2018 I was approved for an unsecured Quicksilver One.

I would have patience and give it 6 months with Capital One.

Right now you have 2 cards, if you have patience and wait 120 to 180 days keeping utilization low and good payment history that third card shouldn't be hard to get and should be unsecured.

Re: How many accounts enough to build credit?

donkort — Thu, 31 Mar 2022 15:25:39 GMT

You have to start from somewhere.

Secured cards are an excellent start.

I wonder how Experian "boost" actually works when you add your utility bills to your credit report. Establishing a few years of excellent payment history on utilities would probably work to your favor.

It's sort of a "catch-22"----in that a wide variety of credit types (credit cards, mortgages, car loans, etc) helps your FICO score----but you have to get approved for those credit types, and that's pretty difficult when you have little credit history.

As I said above, the secured cards are an excellent start.

After that collection gets deleted, you will be in a far better place.

And, of course, consider the advice of the people above me.

Re: How many accounts enough to build credit?

MarkyB — Thu, 31 Mar 2022 20:05:36 GMT

@lns1976 wrote:
I would wait before doing anything. I opened my now closed Capital One Platinum Secured in July of 2017, by March 2018 I was approved for an unsecured Quicksilver One.

I would have patience and give it 6 months with Capital One.

Right now you have 2 cards, if you have patience and wait 120 to 180 days keeping utilization low and good payment history that third card shouldn't be hard to get and should be unsecured.

That's some solid advice. Thank you. I guess my thing is, I'm trying to build my credit as fast as possible in a 12 month period so I can apply for a auto loan once my collection drops off. I'd like to have multiple cards right away so I can start building that length of history. If I wait 6 months to apply for a 3rd card that's 6 months my credit isn't rising as much as it could be and 6 months of history length I'm losing as well.

Re: How many accounts enough to build credit?

MarkyB — Thu, 31 Mar 2022 20:08:49 GMT

@donkort wrote:
You have to start from somewhere.

Secured cards are an excellent start.

I wonder how Experian "boost" actually works when you add your utility bills to your credit report. Establishing a few years of excellent payment history on utilities would probably work to your favor.

It's sort of a "catch-22"----in that a wide variety of credit types (credit cards, mortgages, car loans, etc) helps your FICO score----but you have to get approved for those credit types, and that's pretty difficult when you have little credit history.

As I said above, the secured cards are an excellent start.

After that collection gets deleted, you will be in a far better place.

And, of course, consider the advice of the people above me.

I honestly have no beef with secured cards. Putting a deposit doesn't bother me. I'm more than willing to prove myself. I'm taking everyone's advice to heart. It means a lot that there's people with experience willing to help others with no self benefit. Thank you!

Re: How many accounts enough to build credit?

MarkyB — Thu, 31 Mar 2022 20:23:37 GMT

Ok so I got the denial letter from Bank of America today after applying for their secured card last week. Their reasoning is as quoted...

“You do not have a sufficient number of established credit references”

“Limited or no deposit and/or investment balances with us and/or our affiliates”

So for some context, I only have a checking account with them that I use strictly for direct deposit from my primary employment. Once I get paid I withdraw my funds and repeat every week. I assume they want me to keep my money in there and possibly even open a savings account and start piling up funds in it as well. I have no issues with that if that's what that means. The one head scratcher though is the lack of credit history. Isn't that the point of secured cards? Lol.

Re: How many accounts enough to build credit?

RobynJ — Fri, 01 Apr 2022 01:13:56 GMT

@MarkyB wrote:
Ok so I got the denial letter from Bank of America today after applying for their secured card last week. Their reasoning is as quoted...

“You do not have a sufficient number of established credit references”

“Limited or no deposit and/or investment balances with us and/or our affiliates”

So for some context, I only have a checking account with them that I use strictly for direct deposit from my primary employment. Once I get paid I withdraw my funds and repeat every week. I assume they want me to keep my money in there and possibly even open a savings account and start piling up funds in it as well. I have no issues with that if that's what that means. The one head scratcher though is the lack of credit history. Isn't that the point of secured cards? Lol.

Hello, I thought I would chime in and share my two cents. I am in a similar situation as you with not having a score. I haven't used credit in many years and had a completely blank file. I wanted to add accounts just like you and this is what I did. I started with both Disco and Cap 1 secured, after that I got the OpenSky (no hard pull). So I was sitting with 3 cards and took some solid advise from here and opened over the phone a NavyFCU account and also got the NRewards secured card. 3 weeks later I opened a SSL for 3k with them. I was also added as an AU on an Amex with a 30k CL. So you see we are a good deal on the same track. The best move I truly believe is from NavyFCU as you can truly build a real relationship with them. I am depositing half of my check every week into a savings account and not spending any of it. The 3k is still sitting there along with payments. I also use the card heavy and pay prior to statement close date. They have the best rates and are more likely to approve you for an auto loan faster then any other type of bank especially with limited credit. I used to work as a F and I manager in a large dealership and know all about underwriting and ready credit but had no idea of what I didn't know prior to coming to these forums. There are many intelligent posters here with a wide array of knowledge. I will say that what I know about auto loans is that with limited credit (even with a year of good pay) 30k is a big ask for starting off. I would not set my sights that high at first if I were you. I wouldn't want to be disappointed. Either way the credit union would be your best choice.
Best of luck to you!

Re: How many accounts enough to build credit?

MarkyB — Fri, 01 Apr 2022 05:02:18 GMT

@RobynJ wrote:
@MarkyB wrote:
Ok so I got the denial letter from Bank of America today after applying for their secured card last week. Their reasoning is as quoted...

“You do not have a sufficient number of established credit references”

“Limited or no deposit and/or investment balances with us and/or our affiliates”

So for some context, I only have a checking account with them that I use strictly for direct deposit from my primary employment. Once I get paid I withdraw my funds and repeat every week. I assume they want me to keep my money in there and possibly even open a savings account and start piling up funds in it as well. I have no issues with that if that's what that means. The one head scratcher though is the lack of credit history. Isn't that the point of secured cards? Lol.
Hello, I thought I would chime in and share my two cents. I am in a similar situation as you with not having a score. I haven't used credit in many years and had a completely blank file. I wanted to add accounts just like you and this is what I did. I started with both Disco and Cap 1 secured, after that I got the OpenSky (no hard pull). So I was sitting with 3 cards and took some solid advise from here and opened over the phone a NavyFCU account and also got the NRewards secured card. 3 weeks later I opened a SSL for 3k with them. I was also added as an AU on an Amex with a 30k CL. So you see we are a good deal on the same track. The best move I truly believe is from NavyFCU as you can truly build a real relationship with them. I am depositing half of my check every week into a savings account and not spending any of it. The 3k is still sitting there along with payments. I also use the card heavy and pay prior to statement close date. They have the best rates and are more likely to approve you for an auto loan faster then any other type of bank especially with limited credit. I used to work as a F and I manager in a large dealership and know all about underwriting and ready credit but had no idea of what I didn't know prior to coming to these forums. There are many intelligent posters here with a wide array of knowledge. I will say that what I know about auto loans is that with limited credit (even with a year of good pay) 30k is a big ask for starting off. I would not set my sights that high at first if I were you. I wouldn't want to be disappointed. Either way the credit union would be your best choice.
Best of luck to you!

Thank you for that insight. I am preparing for the possibility of not being able to take out such a high auto loan. I'm not naive to think 1 year is enough to gauge someone's creditworthiness. I'm sure many lenders will be hesitant although personally I'd easily be able to pay it off. I will do my best getting approved and whatever happens I will make the most of it.

We really are on the same track. Glad to see things are going well for you. I'm opening a Open Sky as my 3rd card as well. I found out capital one won't approve me for a 2nd card until 6 months after my first approval. In fact, I will be applying for the Open Sky now right after I submit this reply. Thanks again for your time and good luck to you as well on your journey!

Re: How many accounts enough to build credit?

RobynJ — Fri, 01 Apr 2022 11:49:59 GMT

One thing about disco I want to warn you about. When they do reviews they mandatory make you sign the IRS form to check your income. You stated earlier that some was in cash and if I were you I would go to the disco app and update your income to whatever is provable because they will close the card if you can't prove it. If you update it now before hand you should be fine.

Re: How many accounts enough to build credit?

MarkyB — Fri, 01 Apr 2022 17:55:19 GMT

@RobynJ wrote:
One thing about disco I want to warn you about. When they do reviews they mandatory make you sign the IRS form to check your income. You stated earlier that some was in cash and if I were you I would go to the disco app and update your income to whatever is provable because they will close the card if you can't prove it. If you update it now before hand you should be fine.

I just received my discover card in the mail today. They approved me instantly when I applied 2 weeks ago. I got their secured card. I didn't have the verify anything. Only capital one required me to verify my identity.