topic Re: Building credit in Rebuilding Your Credit

Building credit

Bronze_kneecap — Fri, 09 May 2025 15:23:10 GMT

Hi I want to thank the Members of Myfico Forums, you guys have been a great help to my credit journey. Few years ago I messed up my credit. I had a few charge offs from discover bank, Capital one bank, and Chase bank. After a year of Goodwill letters and email executives I was able to get all 3 charge offs removed. Now I have started to build my credit with a clean slate. Back in march 2025 I was approved for a Us bank secured credit card with $500 limit. I recently got a pre approval from capital one for savor, this morning I took the offer and was instantly approved for $500 limit. I have a few questions. What would be my next course should I wait and let the accounts age or should I try to apply for a new card to raise my overall limits? My current score is Experian 682 TransUnion 736 EQUIFAX 664 these are fico scores. I currently have no late payments no charge offs and no collection or public records. My current utilization is at 64%. Also I can't seem to understand why my EQUIFAX score is so low compared to other credit agency.

Re: Building credit

JoeRockhead — Fri, 09 May 2025 15:38:29 GMT

@Bronze_kneecap wrote:
Hi I want to thank the Members of Myfico Forums, you guys have been a great help to my credit journey. Few years ago I messed up my credit. I had a few charge offs from discover bank, Capital one bank, and Chase bank. After a year of Goodwill letters and email executives I was able to get all 3 charge offs removed. Now I have started to build my credit with a clean slate. Back in march 2025 I was approved for a Us bank secured credit card with $500 limit. I recently got a pre approval from capital one for savor, this morning I took the offer and was instantly approved for $500 limit. I have a few questions. What would be my next course should I wait and let the accounts age or should I try to apply for a new card to raise my overall limits? My current score is Experian 682 TransUnion 736 EQUIFAX 664 these are fico scores. I currently have no late payments no charge offs and no collection or public records. My current utilization is at 64%. Also I can't seem to understand why my EQUIFAX score is so low compared to other credit agency.

Congratulations on getting a clean slate, nicely done. As for what next, I'd recommend against applying for, and/or adding any addition cards or other credit accounts for a minimum of 6 months (preferably 8 to 12 months). In the meantime you're going to want to get your reported aggregate utilization down, preferably under 9% and also only on one card (let the other card report a zero balance). It's what is suppressing your scores now.

Being you have what would be considered a young/thin file your scores are going to be more reactive to reported balances so keeping them down and building positive payment history are going to go a long way towards much bigger and better things coming your way.

Re: Building credit

Patient957 — Fri, 09 May 2025 19:14:45 GMT

@Bronze_kneecap

Congratulations on your success so far. You're in an enviable position with the opportunity to rebuild from a clean slate. You're doing the right thing by seeking advice.

I agree with @JoeRockhead regarding gardening for 8-12 months. If you go the full 12 months from your Savor approval, you will get a nice 20ish point boost for having no new revolvers, which would definitely help your next credit card application.

I would put use every month on both of your cards in the meantime. Don't exceed your limits and always pay at least the statement balance.

Don't worry about your utiliization until it's time to make a new credit app. Your limits are small, so you going to have high utilization with normal use. It costs you points, but that's okay until you need to apply for credit (or request a CLI).

Four to six weeks ahead of your next app, pay one card down to zero and the other to <9%, so around $40. Wait for those balances to report and your scores to jump, which they will, and then make your next credit card application with your best foot forward.

If you don't already understand AZEO and general utilization management, do some searching on this boards until you do. It's important to manage your utilization, but it only really matters at the time of your applications.

Re: Building credit

FicoMike0 — Fri, 09 May 2025 23:26:09 GMT

Congratulations on the clean slate! As far as score variations, id look age metrics. If they differ amount the cras, look for old, closed accounts. I've found differences there.I

Ditto @Patient957 , since utilization has no memory, not important until you need better scores. Make sure you understand that it's reported utilization that counts.

I differ a little on an additional account. Since having three accounts seems to improve scores, id go for another, prefer preapprovals. The sooner you get the third, the sooner the 12 months passes.

If you have no installment loan, you would benefit from a ssl. Penfed will go as long as 142 months. The score boost kicks in right away and the account starts aging.

Re: Building credit

indiolatino61 — Sat, 10 May 2025 00:17:50 GMT

@Bronze_kneecap wrote:
Hi I want to thank the Members of Myfico Forums, you guys have been a great help to my credit journey. Few years ago I messed up my credit. I had a few charge offs from discover bank, Capital one bank, and Chase bank. After a year of Goodwill letters and email executives I was able to get all 3 charge offs removed. Now I have started to build my credit with a clean slate. Back in march 2025 I was approved for a Us bank secured credit card with $500 limit. I recently got a pre approval from capital one for savor, this morning I took the offer and was instantly approved for $500 limit. I have a few questions. What would be my next course should I wait and let the accounts age or should I try to apply for a new card to raise my overall limits? My current score is Experian 682 TransUnion 736 EQUIFAX 664 these are fico scores. I currently have no late payments no charge offs and no collection or public records. My current utilization is at 64%. Also I can't seem to understand why my EQUIFAX score is so low compared to other credit agency.

Good luck on your credit rebuilding journey. You've received good advice so far from Joe Rockhead, et al. Credit strategies are cumulative, so the more of them you use, the better. Being a member here and asking questions is an excellent first step. A key element is patience. Many who are new to credit, upon their first approval, go ballistic and yearn for multiple approvals in a short time. The proverbial, "It's a marathon, not a race," couldn't be more applicable.

Re: Building credit

JoeRockhead — Sat, 10 May 2025 12:33:15 GMT

I'm going to respectfully disagree with some of the other suggestions here. Particularly the notion of not worrying about reported utilization, and adding another card, and/or an SSL in the immediate future.

The reality is the OP barely got an approval from Cap One, and the other being a secured line. Although the OP has a clean slate, they had several charged off accounts. The cause of them ending in a charged off status aside, would obviously indicate the inability to pay, and/or poor management of their credit.

The suggestion I made for them to get their utilization down, and keep it down is twofold.

With the use of trending data, and predictive scores like VS 4 and Fico 10T becoming more popular and widely used, it would be a great idea to start setting a good "trend" of keeping one's reported utilization in check so as to realize the maximum benefit (higher scores down the road) of a longer trend/history of low reported utilization.
Because of the self admitted mistakes of allowing several accounts to go into CO status, it would also be fair to suggest that the OP needs to learn how to better manage their credit. This can be done by treating credit cards how they should be treated, which is like debit cards.
Bonus for the OP... Lenders know what is spent on their accounts whether it posts, or not. Continuing to allow a higher utilization to report on one account doesn't look good when the other lender is doing follow up SPs to see how you're managing your credit. If the monthly spend is around the same amount, regardless of the statement balance being PIF, it can still look as though you're carrying a sustained balance. Not good for a young/thin file.

Granted, $1,000 in TCL is low, but it's also an amount that should be easy to keep under control. If someone can't manage $1,000, what are they going to do when those limits and new accounts become much, much more? The point being is there's no better time to start improved habits now on the very fortunate clean slate that's been granted.

While I'll agree that having 3 accounts is better for things like practicing AZEO, and with no other open loan adding an SSL will add to credit mix as well as help garner some temporary inflated points, as @indiolatino61 pointed out, this is a marathon, not a sprint. I'll also point out another saying... Finances over Fico. Don't try to add accounts for the sake of adding accounts in an attempt to speed up the process of inflating your scores.

For many people, it seems the more they demonstrate they don't need the credit, the more that's thrown at them by way of pre-approved offers, instant approvals, elevated SUBs, lower APRs, higher limits, etc.

Re: Building credit

Navaster — Sun, 11 May 2025 23:48:01 GMT

Very well done! Keep it up. Remember, patience is the name of the game. Sometimes I have issues with that as well. You should definitely not apply for any additional cards for at least 6 months. Preferably, you should wait for a year before you apply for anything else. You should also consider paying your card off multiple times a month, while your limit is that low, to ensure your utilization is at least under 29%, preferably under 9% when they cut your statement.

Re: Building credit

Realist — Tue, 13 May 2025 10:59:10 GMT

@Bronze_kneecap wrote:
Hi I want to thank the Members of Myfico Forums, you guys have been a great help to my credit journey. Few years ago I messed up my credit. I had a few charge offs from discover bank, Capital one bank, and Chase bank. After a year of Goodwill letters and email executives I was able to get all 3 charge offs removed. Now I have started to build my credit with a clean slate. Back in march 2025 I was approved for a Us bank secured credit card with $500 limit. I recently got a pre approval from capital one for savor, this morning I took the offer and was instantly approved for $500 limit. I have a few questions. What would be my next course should I wait and let the accounts age or should I try to apply for a new card to raise my overall limits? My current score is Experian 682 TransUnion 736 EQUIFAX 664 these are fico scores. I currently have no late payments no charge offs and no collection or public records. My current utilization is at 64%. Also I can't seem to understand why my EQUIFAX score is so low compared to other credit agency.

Assuming all three charges were removed from your report, and no longer impact, it appears you have $1000 in total credit - with nothing holding you back. Ideally you would want to report out credit balances at $300 or less at the higher end, but ideally under $100. This amount will impact your credit utilization score. Whatever it takes to keep your two cards low in utlization, and overall total utilization in check. Pay on time. Don't be afraid to leave pennies on the table so banks can earn their interst.

Watch your hard inquiries, keep them reasonable. If these are two of six, grab a third card in time. Not right away, but in reasonable time. Then let time do it's thing. We did this exact play for some of our out of the gate young candidates. One $25 annual. One freebie, another freebie. Total credit went 40k plus in a short two or three years or so. It took me much longer to accumulate those totals in my youth.

Since life happens, installment loans may be required. Cars, homes, use them responsibly as needed. The goal is to build out a wide credit profile over time - when it makes sense. Don't be afraid to use valid and strategic installment loans, in addition to revolving lines of credit.

Congrats on the clean slate. If you have no negatives left to be seen, you can raise your FICO score rather quickly. But, as said before, a FICO score can be manipulated in either direction quickly. Do the right things to build out your credit profile, and the FICO score will come along for the ride.

Re: Building credit

Bronze_kneecap — Wed, 28 May 2025 22:33:47 GMT

Thank you everyone for the helpful advice, just last week I had got a preapproval from chase bank unlimited freedom credit card I accepted it and instantly was approved with a $500 credit limit. Currently I have 3 credit cards us bank secured $500, capital one savor $500, chase unlimited freedom $500. I'm currently going to let these age, what would you guys recommend my next step in 6 month-12months be go with another credit card(any recommendations on next credit card) or should I go with a personal loan(what bank would you recommend). I recently checked my fico scores and Experian is 739 TransUnion is 744 EQUIFAX is currently at 701. I currently have a 0 balance on all my cards besides us bank I have a $30 balance which I'm going to pay in full next cycle.

Re: Building credit

Patient957 — Wed, 28 May 2025 23:19:52 GMT

Congrats!

If you don't have an open installment loan, I would consider a Penfed SSL. It will help your scores more than a personal loan, because you can pay it down to < 9%, while still keeping the loan open for its entire term. Lots of posts here on the SSL technique by using the search function.

Re: Building credit

JoeRockhead — Wed, 28 May 2025 23:53:35 GMT

Congratulations on your approval. Here's a suggestion you rarely see around here, but to follow the mantra of finances before fico... Instead of borrowing your own money with a SSL for a temporary score boost... put that savings in a HYSA.

See where you're at score wise in 6 months. You should be in great shape score wise without the SSL.

Re: Building credit

Patient957 — Thu, 29 May 2025 00:19:12 GMT

@JoeRockhead wrote:
Congratulations on your approval. Here's a suggestion you rarely see around here, but to follow the mantra of finances before fico... Instead of borrowing your own money with a SSL for a temporary score boost... put that savings in a HYSA.

The OP can do both. You get all your money from an SSL back in 30 days. You can then put it into an HYSA.

You should be in great shape score wise without the SSL.

Yes, but with the SSL, you'd be in great shape +30 points

Re: Building credit

JoeRockhead — Thu, 29 May 2025 00:41:29 GMT

Great point @Patient957 but... Nope... I've decided that I'm just going to be the anti SSL guy 😆

Trying to pump up score for what reason? Outside of potentially getting better mortgage rates, save that loan slot for something else you probably don't need like a boat instead of having to keep on this score hack path... forever.

It's like some people liking naturally aspirated engines over turbo charged engines... I'm more of a turbo chargers kind of guy. I realize that aligns more with the whole SSL concept, but I'm camped out on this hill for today. 😁

Re: Building credit

FicoMike0 — Thu, 29 May 2025 01:18:50 GMT

@JoeRockhead

I find you offer a lot of wisdom. Do you know something about a ssl I dont? You refer to it as a temporary score boost. I've been getting the boost for going on a year now and since I don't even have a scheduled payment until 2030, im expecting it may last longer than I will. Cost is under $4 a year.

Edit. The reason I did the ssl is that my oldest account, 15+ years, is closed and will likely age off this year. This will leave my aooa at about 3 years. I'm also in the garden now, hoping to further offset the impact with both youngest account and hps passing 12 months. Why do I care? No good reason, at least I don't pay to get my scores, lol. It is just a game.

Re: Building credit

JoeRockhead — Thu, 29 May 2025 01:34:46 GMT

@FicoMike0 the SSL thing is a great trick to gain points. As you already know, it only works when it's your only open loan. Outside of forums like this one, no one has a clue about this whole SSL score boost thing.

What happens when people's only open loan closes... they lose those points, then they make a sad face, and/or an all caps ranting post about how Fico scoring is BS, unfair, so on and so forth... I've seen it 😁

This is followed by another post about their new SSL... rinse and repeat.

Plenty of people out there that aren't in this world who have built 800++ scores with no open loan on their reports...

All in good natured fun.

Re: Building credit

FicoMike0 — Thu, 29 May 2025 02:06:00 GMT

I agree, it is a trick, but a fun trick! Better than the no fun all zero trick which costs you points. Azeo is sort of a trick too. Actually, all zero is a trick, ssl and azeo are treats.

That turd score that usb uses is a dirty trick! B@$tards!

Re: Building credit

Bronze_kneecap — Thu, 29 May 2025 15:55:21 GMT

I'm sorry I'm new here I don't have a clue what ssl and hysa is can you elaborate a little more, I've heard this term before?

Re: Building credit

pizzadude — Thu, 29 May 2025 16:36:50 GMT

@Bronze_kneecap wrote:
I'm sorry I'm new here I don't have a clue what ssl and hysa is can you elaborate a little more, I've heard this term before?

SSL - secured savings loan, it's essentially a secured installment loan that is used to build installment loan history.

hysa - High Yield Savings Account

Also this thread has a listing of some commonly used acryonyms.

Re: Building credit

FicoMike0 — Thu, 29 May 2025 16:50:54 GMT

If you search the term ssl, you can read all about it. In short, its a fake loan, in that you borrow your own money, then prepay it to less than 9%, without changing the term. Only navy and penfed work. It only works if it's your only installment loan. I did one for 84 months, put up $2100 for a month, then borrowed it all back, prepared all but $189. Got 30+ point boost. I'm paying 2.05% on the $188.

Re: Building credit

Patient957 — Fri, 30 May 2025 15:33:00 GMT

@FicoMike0 wrote:
In short, its a fake loan, in that you borrow your own money, then prepay it to less than 9%, without changing the term.

Yes, you can call it a "fake loan," but if you don't make the payment, the hit to your credit report and scores will be real as f. So I don't consider it to be fake at all.