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Hey guys, im new to the credit card game and i dont know how to move forward. I recently got approved for two cards, a Bank of America Cash Rewards Card ($1500) and a Bank of America Platinum Plus Mastercard ($2500). I used them to balance transfer some debt i had in paypal credit in order to pay it down at 0% vs 20%. The Cash rewards card i use daily and pay down weekly with typical balance around $200 and the Platinum Plus card has around $1600 on it. I also signed up for an amazon store card to save $60 on a purchase i was making, they gave me a $1200 SL. Its paid off and has $0 balance.
i also was an Authorized User on a discover card that had an $18,500 limit but had $12,000 on it. Which i recently had myself removed from this card. Which i question because it was my longest account being around 9 years. It was a card my parents got and put me on as an authorized user to build me some credit when i first got into college.
So my question is where do i go from here. My goal is to get a chase saphire preferred card, a chase freedom card, and a Capital One Savor card. i want to get some points accumulated to take some vacations etc.
So that leads me to my predicament. Since ive recently opened 3 cards and recently got a loan on a motorcycle, i got declined on an app for the chase card. Admittedly it was a rookie mistake applying for that many cards in a short amount of time (less than 3 months).
My credit score is currently 682 according to transunion and is 657 on experian. These are prior to me being removed as an authorized user from the discover card. Should my score go up or down after being removed and how long should i wait to try and apply again?
Patience is the key. Wait at least 3 months before doing anything so your individual accounts hit the 6 month mark and try to pay your balance to less than 30% of the credit limit then try again.
Hi Sandman89, welcome!!
A few things stick out to me and I'm sure others as well. Just a quick review of the 3 new cards you acquired (Congrats on that!) shows that you would want to start with; Paying down your utilization and gardening for a while (letting the inquiries, new cards, and average age of accounts grow.) . Here is the breakdown:
BoA Platinum Plus - $1,600 / $2,500 = 64% Utilization
BoA Cash Rewards - $200 / $1,500 = 15% Utilization
Amazon Store Card - $0 / $1,200 = 0% Utilization
Total Available Limits - $5,200
Total Overall Utilization - 34% Utilization
Your overall utilization ultimately should fall below 28.9% as should the individual card utilization. Preferably however, you'd be best served having 8.9% utilization on any individual card or lower. You would definitely want to pay down the BoA Platinum Plus sooner rather than later. Being all 3 of these cards are new, your age of newest account and all accounts has taken a hit, hence the scores will too. This is temporary, but time heals all . In regards to the authorized user, and perhaps someone else can help here, but it's good you removed yourself as that utilization was very high.
@Sandman89 Welcome to the myFICO forums!
Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.
Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from getting a FICO scoring penalty.
The installment loan will have its greatest impact on your FICO score when the amount owed is at its smallest such as a few months before the loan is paid in full. If you don't have an installment loan you can check into SelfLender or a Share Secured Loan at a Credit Union.
Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that a person can handle credit responsibly. If you have open, active accounts that are being paid on time and pay all of your bills on time all the time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way to build good, solid credit.
@Anonymous wrote:
Thanks for the input guys! How long should I consider gardening for? 3 months? 6 months?
I think I’m gonna move some of my credit limit from my platinum card to my cash rewards card so I have a little more room to get cash back on purchases of things I plan to buy anyway.
Garden till you have the actual need for credit vs. just wanting more cards
Welcome, @Anonymous.
For Chase, wait until your oldest card is a year old. Also, before applying, build in a period of gardening (not applying for anything). Three months of gardening is OK; six months is better.
Also note that you'll eventually have Chase's 5/24 rule to contend with. If you've opened five or more credit card accounts within the past 24 months, denial is likely. You're at 3/24 right now.
If getting two Chase cards is your priority, don't apply for anything else in the meantime. You can get your first Chase card when your oldest card is a year old, then apply for your next Chase card about six months later.
A middle ground would be to grab another card somewhere (after appropriate gardening), then grab your first Chase card when the time is right. You can grab your second Chase card when you're back under 5/24.