Building Credit in OverDrive!!!!

[navigatethis12]

I have never had a loan and have very nice cards (in my opinion), so do not get the secured loan. It's too late now, but I don't think he should have gotten so many secured cards. They tie up money and are useless in my opinion. If he shops at any stores, he could have/can apply for one and may get approved. I got approved with no history and now the limit is much higher than it was, only after two years.

If I understand correctly, joint is the same as individual. With a joint account, you are responsible for the charges, unlike an authorised user account.

You should probably just wait a whole year to get another card. Six months is the standard, but his file will look nicer if it is one year old, rather than six months.

[distantarray]

I agree on too many secured cards, I would've gone for 2-3 max with higher limits. and would've put DCU digital credit union in there since you get a 100% free monthly fico 04 scores each month and the bank is amazing to grow with. They offer great mortgage loans and car loans which can save you 1 month of payments each year (by taking payments weekly, since interest is based off daily it saves you a lot) you can also opt for the monthly program as well.

[Jutz]

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@distantarray wrote:

I agree on too many secured cards, I would've gone for 2-3 max with higher limits. and would've put DCU digital credit union in there since you get a 100% free monthly fico 04 scores each month and the bank is amazing to grow with. They offer great mortgage loans and car loans which can save you 1 month of payments each year (by taking payments weekly, since interest is based off daily it saves you a lot) you can also opt for the monthly program as well.

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sidebar:  Distant you have DCU?  Do you think you can share a bit more about your experience with them?  I made a thread for it a bit ago and didn't get a response.  I don't want to muck up this thread with it.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/DCU-for-Banking-etc/m-p/1710874#M218968

[jamesdwi]

within 3 months he will start recieving pre-approvals for cards. At 6 months he should be getting prime pre-approvals, don't try for any AMEX revolvers, probably won't accept you with less than 9-12 months of history. But should be able to get Citi or Chase cards at 6 months. My son started getting pre-approvals after I made him AU on a couple cards of mine that have 1 and 3 year clean historys, Recv'd pre-selected for CapOne unsecured got a $500 CL card,  2 months later got pre-selected for Discover, App'd for and got Discover card with a 750 CL, shredded the pre-selected offer for citibank he had nothing on his report except the two AU cards. 

Your friend should be doing fine in a few months with all those tradelines. He will start out with small CL's for a while. As he gets unsecured cards and has passed the 6 months of credit experience he can reduced the number of secured cards and combine the funds to make 2 or 3 higher CL secured cards that may help build CL's long term. With good income he may even get some decent CL's on unsecured once he has 6 months of history. 

[StartingOver10]

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@SnackTrader wrote:

The biggest piece of advice is NO APPS within 1 year of mortgage, longer if possible.

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^^^No, this is not accurate. It is advisable, but not required, to not have apps within 6 months to allow your score to recover from the small ding of the inquiry. But really, the underwriter won't think a thing about it unless it is a new tradeline just before applying for your mortgage (month or two). If your underwriter gave you a tough time because you applied for cc's a year prior to applying for the mortgage, they may have seen something else in your file. I have never seen an underwriter turn down a file for new tradelines UNLESS those tradelines impacted DTI.

[distantarray]

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@StartingOver10 wrote:

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@SnackTrader wrote:

The biggest piece of advice is NO APPS within 1 year of mortgage, longer if possible.

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^^^No, this is not accurate. It is advisable, but not required, to not have apps within 6 months to allow your score to recover from the small ding of the inquiry. But really, the underwriter won't think a thing about it unless it is a new tradeline just before applying for your mortgage (month or two). If your underwriter gave you a tough time because you applied for cc's a year prior to applying for the mortgage, they may have seen something else in your file. I have never seen an underwriter turn down a file for new tradelines UNLESS those tradelines impacted DTI.

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agreed as long as it's not 1-2 months before a mortgage but it shouldn't matter since all they look at is your scores primarily and i've been in the market for a house over a year, if they give you a hardtime just take your business elsewhere imo. with my credit unions they all said i qualify for A+tier on loans with 720+ so that's not really n issue. only time you should refrain is if your in the borderline of a tier like if your at 722 and 1 app could take you to 719 where you would no longer qualify for the best loans or if your at a 642 etc cause FHA requires a 640 in most cases

[nuggets321]

looks like he is off to a really good start... my 2 cents is taht he stop applying, hes got anough working, now its time to let the account "age" with solid payment histories. Racking up  a bunch of new accounts makes lenders EXTREMELY nervous and can be the basis for countless future rejections... its a marathon not a sprint