How do I move up the credit card ladder?

[Shaw83]

I agree get a small loan or better yet a self lender account. "Self lender" if never heard of it is an account that opens up X amount CD and you make payments towards it for a year and after the CD mature they'll send you the money.

[Anonymous]

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@jimmy2000 wrote:

Hi everyone, I have been browsing around as a non-member for awhile but I am very frustrated.

My credit score seems to be stuck around 660 (reported on CK and CreditWise) on both TU and Experian.  How do I move up the credit card ladder and start seeing my score raise?

I'm 18, so my credit history is extremely limited, but I do have 2 cards that I use a lot.

I have a Barclay's Apple Rewards, $700 limit, and a Capital One Journey with a $500 limit (started at 300).  I really have been eyeing the Costco Anywhere Visa, but I now I need a much higher score.  My credit has not improved much at all from when I first started out with these 2 cards, so I'm not sure what I'm doing wrong.  Any advice (besides waiting)?

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Not really. Being patient and using your current cards is all that you're missing at the moment. You're not "stuck" at 660, as an 18 year old you literally just got credit. That's where you start. You're well ahead of the game by having two accounts. 

After a year or so, you should be 700+. Setting good habits (paid on time, low utilization, avoiding impulse applications) now is much more important than rushing a 3rd account.

[sarge12]

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@AverageJoesCredit wrote:
One rung at a time

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True....there are not any shortcuts, but it is fairly easy to fall off the ladder trying to create one. Of course you do need to have all the rungs in the ladder...3 credit cards and an installment loan...to make the climb easier. Other than that it is just time and the "do not's"...do not make payments late, do not do something that might lead to CLD...etc.

[KJinNC]

OP, I think you are doing the right stuff. I wish I had been as wise when I was 18. That said, think about the most successful middle-aged or older person you know and ask yourself, if you were a lender, who is the safer bet to repay money. That person or a very responsible 18-year-old. The credit scoring system deliberately does not change that rapidly in most cases. The exception would be if you remove negative stuff, but in terms of growth, it is set up to be gradual, because somebody being responsible for six months does tell you something, but somebody being responsible for years and decades tells you more. Long story short - you'll get there, I wouldn't worry about it too much as long as you make sure to pay your bills on time. It will come naturally, and, you're not in a bad situation now anyway. I am more than twice your age and am in a similar situation in some ways. JMO, and, good luck!

[sarge12]

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@KJinNC wrote:

OP, I think you are doing the right stuff. I wish I had been as wise when I was 18. That said, think about the most successful middle-aged or older person you know and ask yourself, if you were a lender, who is the safer bet to repay money. That person or a very responsible 18-year-old. The credit scoring system deliberately does not change that rapidly in most cases. The exception would be if you remove negative stuff, but in terms of growth, it is set up to be gradual, because somebody being responsible for six months does tell you something, but somebody being responsible for years and decades tells you more. Long story short - you'll get there, I wouldn't worry about it too much as long as you make sure to pay your bills on time. It will come naturally, and, you're not in a bad situation now anyway. I am more than twice your age and am in a similar situation in some ways. JMO, and, good luck!

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It does not increase rapidly, but decreases can be, and often are very rapidly done if late on payments, collections, BK, etc...If nothing major exists, then I agree the changes will be fairly gradual. In my experience the lowering of scores more than a few points are more often than not very rapid, and caused by a major negative credit event.

[sarge12]

I want to add to my previous post. About 10.5 months ago I had 3 inqueries and 3 new accounts. It caused my scores to drop maybe 20 points on some of the CRA's. One even dropped below 800, which had been the case for years that they were always over 800. I have almost gotten back to where I was before the inqueries and new accounts, almost 11 months later. So my point is score drops can and usually do occour rapidly, and depending on why it dropped, it can take months, or even years to recover those points. That is what you need to remember when handeling your credit accounts. If you are handeling credit properly, the increases will be gradual. A notable exception is the changes caused by utilization which can cause rapid declines, and equally rapid increases if you get your utilization back down. It is the one thing that carries no history, so if you lose 50 points because your cards are nearly maxed out, getting the utilization back below 9% will see every single point you lost back. Nearly maxed out cards could however prompt AA by the credit card issuer though. Now this is just my personal way of dealing with credit, so do not take the following as the only way to use cards. I personally always PIF every card every month, except 1 low interest card my sister uses and pays the card payments. I have not personally payed one cent in interest on a card in at least 15 years. Some with high score do carry a balance, so my way is not the only way, but I do believe it is the best way.

[CreditInspired]

Hi OP and welcome to MyFICO

First, I want to say +100 on everything every posters said so I’m offering you one good point and ask you a question: 

Let this phrase be a part of your repertoire — Creating a great credit profile is a marathon, not a sprint.  

Can your parent(s) make you an AU on one of their “older” CCs that’s of course in good standing with low UT. 

GL2U

[jimmy2000]

Thanks!  I applied and was approved for $500 for a Macy's store card which I assume will just be a good 4th account to add to the mix.  I also pulled my true FICO scores and now realize that Credit Karma is way off.  For now I am just going to sit for a year or two, and become an authorized user on one of my dad's cards to help boost a little more.

[Anonymous]

Welcome to the forums, OP!

As others have mentioned, it's likely your util that is keeping your score down. Just AZEO and make that one about $4 so it registers around 1%. The first FICO score I generated was around 700, so you're not far off. As AAoA increases and stabilizes with additional accounts, you'll see it grow. In the words of the famous AJC, one rung at a time! 

[Anonymous]

I'm going to go against the grain here with the installment loan. At this stage there is really no reason to get one unless you need it. I have no idea why people are suggesting you take on more debt and interest you don't need (yes, it can be small, but debt is debt). If you need a car, sure. If you have a large purchase, sure. Heck, I could even see it if you planned to buy a house in a few years, and you wanted that last little bump, but at 18 with under a year of credit experience, you will grow just fine without it for some time yet.

One thing that you can do, is if you have a family member with good credit, see if they have a card with low utilization that they can add you to as an authorized user. Even if you never have a card or use the account, just being on it can add substantially to your available credit, and help your overall utilization as well as other factors. It should go without saying that this should be a responsible individual that you trust.

You mentioned opening a new card. If you need it, great! If you don't need it, hold off some. Opening new cards will add a hard pull in many cases, and will decrease your average age. This will lower scores. It looks like, in the grand scheme of things, most of your cards are pretty new. As your accounts age and these impacts diminish, you will see some boost. Once you hit the 12 month mark with the oldest card, you will likely see a slight increase. Once your average hits 12 months, you'll probably see another. 

Really it just comes down to patience.