Credit Application Advice..

[YellowBanana]

I hope I'm posting this in the right place...last time I nearly got credit board jumped hehe  

So this question is for my daughter. She currently has two cards of her own.

NFCU-CashRewards $23,000  this card is 3 months old   20% utilization

Merrick Bank $1100 this card is 7 months old.  5% utilization

She is an authorized user on Capital One GM Card- $500 1 years old and Capital One Platinum $455 13 years old. 

Any suggestions on what credit applications would be best or what she should do? Any advice will be greatly appreciated!! 

Equifax Score is 644 

-has one medical collection 

TransUnion is 683

-no collections

Experian is 664

-has one medical collection

Salary: $77,000

[Anonymous]

You should pay down the balances first. This will help the credit score. As for which card she should apply for - You didn't specify what type of rewards or what she is looking for? Cash? Travel?

[YellowBanana]

Opps I forgot, thanks for resonding she likes rewards cards. (Cash Rewards) We both love the NavyFederal CashRewards

Is it best to pay down the Navy Federal to under 10%?

[Anonymous]

Im a big cash rewards guy myself. To loop back, yes pay down (if not eliminate all debt) If she is making $77k a year you really have no excuse (except emergency) to carry that  kind of balance. So get rid of that debt. 

For rewards cards:

I carry the Citi Double Cash (2%) - Everywhere, every purchase

I then use my AMEX at super markets (6%)

And thats pretty much it. I do enjoy the Quicksilver at 1.5% simply because redeeming the rewards is far faster and easier than any cash rewards card I have used. Although I have store cards and rotating category cards, I find the simple 2% to be enough to not worry about keeping track of what store I am in or what category is 5%. (Keeping in mind that I dont drive at the moment and 90% of what I buy is from eBay).

[SouthJamaica]

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@YellowBanana wrote:

I hope I'm posting this in the right place...last time I nearly got credit board jumped hehe  

So this question is for my daughter. She currently has two cards of her own.

NFCU-CashRewards $23,000  this card is 3 months old   20% utilization

Merrick Bank $1100 this card is 7 months old.  5% utilization

She is an authorized user on Capital One GM Card- $500 1 years old and Capital One Platinum $455 13 years old. 

Any suggestions on what credit applications would be best or what she should do? Any advice will be greatly appreciated!! 

Equifax Score is 644 

-has one medical collection 

TransUnion is 683

-no collections

Experian is 664

-has one medical collection

Salary: $77,000

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My advice would be to wait until scores strengthen, but my recommendations would be Capital One Quicksilver, American Express Blue Cash Everyday, Chase Freedom Unlimited, or Barclays Cash Forward.

[Anonymous]

1.) She needs to pay down the balances so they are less than 9%, that will help improve the score.

2.) Any improvement in score really depends on how recent the collection items were- the older they are (e.g. 5+ years) means the larger the impact of paying down the balancing (decreasing utilization). Of course this assumes these are the only negative marks on her report. 

3.) I would suggest to also let the cards she's got age for a while longer, they are both less than a year old. Even though she's got that 13 year history from that one card- it's only got a <$500 limit, which is nothing compared to the $23k limit. If she let that card with the larger limit age then she'll be golden with most banks (assuming no other negative marks on her reports and less than 9% utilization). 

In short, she shouldn't apply for more than what she's got now. She CAN and she MAY get approved for an ok card, but it's better that she waits a little and improve her numbers so that she has a much higher chance of getting approved for pretty much any card she wants. 

[YellowBanana]

Thanks you, samadkins29. SouthJamaica, and Hexaplorer

I will tell her exactly what you all said. The NFCU card came in handy; she had to charge her last Chemo bill because BCBS refused to pay it.

Hexaployer thank you for being so detailed I will copy and paste it into an email for her.

[Themanwhocan]

This is how to use the credit cards to maximize the FICO scoring algorithm:  http://ficoforums.myfico.com/t5/General-Credit-Topics/How-do-I-play-the-1-9-Utilization-Game-Please-...

Here is my thread on various cash back credit cards: http://ficoforums.myfico.com/t5/Credit-Cards/Cash-Back-credit-card-charts/td-p/4004725

If she has absolutely no other open loans besides credit cards, then the Alliant Share Secured Loan technique is useful for boosting credit scores, but only if done correctly:  http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

However, those FICO scores are pretty low. Getting rid of the baddies, and working on my first suggestion should be the first things that are done.

Remember, you can get a free Experian FICO score each month at creditscorecard.com

[Anonymous]

If the 20% came down to 9% I don't think it would ramp up the scores that much. Look at TransUnion friendly lenders. Barclaycardus, perhaps the Marvel mastercard? If they approved with a decent limit that might make the other reporting agencies scores come up from padding. Otherwise keep sending letters.

[YellowBanana]

Hexaplorer- Thank you!! Great advice, we really appreciate it. It’s sad that I couldn’t teach her about this stuff earlier but the good news is we are learning together now.

samadkins29 Thank You for your detailed response. We are going to try to get that last collection off and will most definitely apply for the card you recommended. That 6% back at grocery stores sounds wonderful.

SouthJamaica Thank you, she really wants the American Express Blue Cash Everyday card, that’s her dream card. Does American Express usually check Experian? I wonder if she will need to wait till her score is around 720 for Amex

Themanwhocan Thank you for the links, I’ve read two of them so far. What FICO scores are considered decent and not low?

fordguy89- You are so right!! I was telling her everything from the posts and she told me that she had already paid down the Navy Federal account to $100 bucks and her score did not go up at all!