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Seven years of credit history...but no real history. First card to get?

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Senior Contributor

Re: Seven years of credit history...but no real history. First card to get?

I was in a similar position to you a few years ago. Because I was waiting for a BK to fall off, I didn't app for any credit and didn't realize that I should have been rebuliding while waiting for it to fall off.Then I ended up with no cr score and virtually no cr history because nothng had reported for over 7 years.

 

Anyway, what I did was to open two secured loans at my local bank and CU. Sometimes they're called passbook loans or savings loans. One good thing about them is that they don't affect your cash flow because you take out almost all of the money you put into savings, when you take the loan. You'd need to call around, but the two that I got were both 90%, so the bank kept 10% of my original deposit and the rest I was able to take as the loan. (This money stays in savings; the bank doesn't keep the 10% forever.) So, for example, if you deposit $1000, you could take out a $900 loan. So, your cash flow is only affected by the $100, but you get it back when the loan ends.

 

Each month I paid the monthly payment (at really low interest, I should add -- I think it was a point or two above the interest I was getting on the savings, so it wasn't like a crazy amount of interest that I had to pay.)

 

Each loan was for 1 year. I actually called a lot of banks, CUs and S&Ls in my area because they didn't all offer it. Also you need to be sure when you're first shopping around that they will report to the 3 CRA. In general, they don't report those types of loans to CRAs, so I needed to request it specifically and find a bank/CU that would accomodate me.

 

Then what you might want to do is take the cash from your secured loans and open a secured card. You might check with your local CU or bank and see if you might be able to apply for a regular card and if you're not approved, get a secured card without another inquiry on your CR. I'd also research how they are about refunding your deposit after a given length of time. Some banks won't want to give you your deposit back but will give you CLIs instead. If you can do this with your local CU, you'll probably be better off than going with a big bank like Cap One.

 

One more thought. I know Cap One is notoriously difficult to deal with, but you might try calling a backdoor number (sticky topic on the forum) and see if they'd reconsider you for the newcomer card you mentioned, or if that fails, a secured card.

 

Secured loans won't give you the revolving credit that CCs look for, but it will help increase your score and give you a credit history.

 

HTH!

 

 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

Message 11 of 32
Senior Contributor

Re: Seven years of credit history...but no real history. First card to get?


@bichonmom wrote:

I was in a similar position to you a few years ago. Because I was waiting for a BK to fall off, I didn't app for any credit and didn't realize that I should have been rebuliding while waiting for it to fall off.Then I ended up with no cr score and virtually no cr history because nothng had reported for over 7 years.

 

Anyway, what I did was to open two secured loans at my local bank and CU. Sometimes they're called passbook loans or savings loans. One good thing about them is that they don't affect your cash flow because you take out almost all of the money you put into savings, when you take the loan. You'd need to call around, but the two that I got were both 90%, so the bank kept 10% of my original deposit and the rest I was able to take as the loan. (This money stays in savings; the bank doesn't keep the 10% forever.) So, for example, if you deposit $1000, you could take out a $900 loan. So, your cash flow is only affected by the $100, but you get it back when the loan ends.

 

Each month I paid the monthly payment (at really low interest, I should add -- I think it was a point or two above the interest I was getting on the savings, so it wasn't like a crazy amount of interest that I had to pay.)

 

Each loan was for 1 year. I actually called a lot of banks, CUs and S&Ls in my area because they didn't all offer it. Also you need to be sure when you're first shopping around that they will report to the 3 CRA. In general, they don't report those types of loans to CRAs, so I needed to request it specifically and find a bank/CU that would accomodate me.

 

Then what you might want to do is take the cash from your secured loans and open a secured card. You might check with your local CU or bank and see if you might be able to apply for a regular card and if you're not approved, get a secured card without another inquiry on your CR. I'd also research how they are about refunding your deposit after a given length of time. Some banks won't want to give you your deposit back but will give you CLIs instead. If you can do this with your local CU, you'll probably be better off than going with a big bank like Cap One.

 

One more thought. I know Cap One is notoriously difficult to deal with, but you might try calling a backdoor number (sticky topic on the forum) and see if they'd reconsider you for the newcomer card you mentioned, or if that fails, a secured card.

 

Secured loans won't give you the revolving credit that CCs look for, but it will help increase your score and give you a credit history.

 

HTH!

 

 


That is actually a very, very good idea!

IAALBNYL
Message 12 of 32
Senior Contributor

Re: Seven years of credit history...but no real history. First card to get?

 

Thank you, O6. I just wish I had known to get a CC sooner! Smiley Happy

 

 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

Message 13 of 32
Senior Contributor

Re: Seven years of credit history...but no real history. First card to get?


@bichonmom wrote:

 

Thank you, O6. I just wish I had known to get a CC sooner! Smiley Happy

 

 


We've probabvly all been in that boat.  Hindsight is always 20/20.  Smiley Happy

IAALBNYL
Message 14 of 32
Moderator Emeritus

Re: Seven years of credit history...but no real history. First card to get?


@O6 wrote:

@bichonmom wrote:

 

Thank you, O6. I just wish I had known to get a CC sooner! Smiley Happy

 

 


We've probabvly all been in that boat.  Hindsight is always 20/20.  Smiley Happy


Too true!  OP is in that position now as well.  With his auto loan and his JCPenney card, he is ready to get a major CC.  The trick for him will be figuring out which CC's do not look for two years history on two revolving cards, or some such.  I think the CU's will probably serve him well.  Alllant comes to mind because they gave DH a $10,000 CL when his only other open revolver was a 6 month old $500 Orchard - but he had a great EQ FICO score at the time.  And your suggestion to look at CU's in general is great.  I'm also a fan of Cabela's with the OP's scores - I've never heard that they require a history and they opened DH's ($5,000 CL) card the same time as Alliant - so with only the 6 month old $500 Orchard open.  BofA also gave DH an opening CL of $4,000 a few months after Alliant and Cabelas were open.  DH did have older closed cards and installment accounts on his report, though, so there was an older history they could look at.

 

Anyone know any other major cc's that don't require a significant history?

Just puttin' syrup on something, don't make it pancakes.
Message 15 of 32
Established Contributor

Re: Seven years of credit history...but no real history. First card to get?


@O6 wrote:

@hsg10mm wrote:

O6:

Okay, so I should probably not try for the CapitalOne Classic Platinum Card, then. What about the Capital One Cash Rewards for Newcomers Card the I mentioned? I have not found anything one way or the other to indicate whether or not it would be a good idea for someone with a thin file to apply for.

 

When you say to start with a credit union, do you mean to apply for a secured card with a credit union? I am a member of three banks, two of which are credit unions, and neither has a secured card. One has a points-based rewards card (I have been with this credit union since I was learning to walk, I think, and I'm 27 now). The other credit union has a non-rewards card with a very good interest rate (7.75%). I have been with that credit union for 15 years, I believe. I don't feel confident that I could get approved for either of those cards based on my thin credit file; let me know if that is an incorrect assumption.

 

 

beamMEup:

What you suggest about the JCPenney account actually did cross my mind after I made my original post. I'm not really sure how to go about it, but if I did start putting purchases on it every month, I assume that I could increase my credit limit with them, which would help my credit score/file on top of the simple fact of not losing my oldest/only revolving account. What steps would I need to take to increase my credit limit with them?

 

As to other credit unions, I will check out Alliant, and maybe they will like me, as you say. Smiley Happy


 

I'm afraid I know little about CrapOne's card products so I can't comment about which might be best for you. 

 

I know that with a "thin" file some lenders don't like to take a chance.  They believe that a department store card and an auto loan, even though showing 7 years of history, might not be enough to indicate whether one can handle a major credit card.

 

I would go with a good credit union (maybe like Alliant) and apply for an unsecured card.  They might be more willing to approve, if not initially, after you recon their initial decision.

 

I think other banks like Bank of America or Citibank for unsecured cards might be more difficult, but YMMV.  Even if they initially decline, you can try a recon.  Still, you don't want to be applying for too many cards because those inquiries will also kill your chances of getting approved.  Best to use your inquiries wisely.

 

A good option would be to get a secured card from, say, BoA or Citibank and then you can be pretty sure that after a year or so it will unsecure. 

 

My strategy might be something like this:

 

Try for an unsecured card from one of your credit unions.  When you get approved for one, stop applying for unsecured credit.

 

Then get a secured card from BoA and also Citibank.  Then stop applying, period. 

 

After a year and a half you have three great unsecured cards (because Citibank and BoA will unsecure) that will grow with you while having only very, very old inquiries still showing on your credit report. 

 

 

 

 


Citibank might reject you because lack of use of credit. They did it to DW.

 

I agree that apping for a CC from a CU is probably your best bet.

 

If you consider getting a secured loan, make sure the OC will report it.

Message 16 of 32
Member

Re: Seven years of credit history...but no real history. First card to get?

Wow, thanks for all of the replies, everyone! The past day or two has yielded some good things, both in advice and in developments on my end.

 

I think I have something that will actually change the game a little bit for me, in a very good way. Remember that auto loan inquiry that I ended up not acting on? I made that inquiry on 4-27-11, with the credit union (North Carolina State Employees' Credit Union) that has the 7.75% unsecured Visa. I called them today and asked if they could use that same pull to put a card application through, since it was within 30 days of the initial inquiry. They said they could, and all I had to do was sign the card application and I should receive a card within a couple of weeks! I had ink on paper within the hour. They said that it would have to be signed off on, but that I should get the card and have something in the vicinity of a $2,000 credit limit on it! We'll see if that's actually the case, and I've got my fingers crossed, but the financial services officer sounded pretty sure of it.

 

I also asked them about secured loans (I checked their website before calling to make sure they did them); they do report secured loans, which is also great. Unfortunately, it was at this point that I found out that NCSECU only reports to Equifax instead of all three agencies. Smiley Indifferent That means that the unsecured Visa I am supposed to be receiving in a couple of weeks doesn't help me quite as much as I thought it would. From what I understand, if I had to pick one agency for them to report to, it'd be Equifax, but I would obviously prefer a revolving account that reports to all three agencies.

 

In light of this, I may still try for an unsecured card from Alliant (and appeal the decision if denied). This is assuming that Alliant reports to all three credit bureaus. Is this assumption correct? Also, which reports does Alliant pull (all three, or just one or two)?

 

On the issue of my existing JCPenney GEMB card: I rummaged through my filing cabinet and found my paperwork for the card, went on the JCPenney website, and was able to set up my online account successfully, so I would assume that means that the card is still active. I'll try to get time to go in and buy something with the card in the next week or so, as time permits, and we'll see. I had to laugh when I looked at the credit limit listed on my account online: $124.00! Big money... Smiley Very Happy I am going to try and put something on the card every month and pay it off, then request a limit increase after four months as was suggested.

 

I'd like to have 2-3 major revolving accounts, and I feel that if I can get a card with Alliant in addition to the NCSECU unsecured Visa, then I would get the CapitalOne secured card to round out the roster. I'd make deposits to build up the credit line as funds permitted over the next 6 months as suggested. This would conceivably set me on the path to a good rewards card with CapitalOne. Questions: Will CapitalOne use my application/credit pull from a couple of weeks ago to approve me for the secured card, or will they do a fresh inquiry? Also, is the process for unsecuring a CapitalOne fairly easy, after building history on two or three revolving accounts for 6-12 months (from what I understand, the sum of the credit limits for all three accounts would work in my favor as well)?

 

So, here's the plan of attack as of now:

  • Assuming I do get the NCSECU unsecured Visa in the next couple of weeks: use the card for everyday purchases and pay it off in full every month. In the event that I am approved for another unsecured card that reports to all three credit bureaus, this card will be "demoted"; used every month and then paid off in full, but just not necessarily as my primary card.
  • Make purchases with the JCPenney card and pay it off in full every month, then request an increase after the fourth statement.
  • Apply for an unsecured card from Alliant (assuming they report to all three credit bureaus), appeal the decision if denied, and keep my fingers crossed. If approved, use this card as my primary card for everyday purchases and pay off in full every month.
  • Apply for the CapitalOne secured card, build up a higher credit line over the next 6 months, use the card, pay it off in full, etc. until it's time to upgrade it to an unsecured card.
  • Possibly also open a secured loan from NCSECU or another bank (the reason for going with another bank would be to get it reported to all three agencies rather than just Equifax) to diversify and build my credit file a little more in addition to all of the above.

Since I'm rather new to this scene, I'm a bit fuzzy on some of the acronyms, namely: AU (automatic upgrade?), OC (original creditor?), DH (dear husband?), DW (dear wife?). I get all of the other ones used in this thread; my favorite being IAALBNYL. Clue me in if I'm reading any of them wrong.

 

Thanks for all of the great input in this thread; it has been VERY helpful! Please continue to post your ideas, advice, and/or criticisms, all are appreciated.


FICO Equifax: 743 (5/22/11)
FICO TransUnion: 748 (5/22/11)
CreditKarma TransUnion: 672 (5/22/11)
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Message 17 of 32
Senior Contributor

Re: Seven years of credit history...but no real history. First card to get?


@hsg10mm wrote:

Wow, thanks for all of the replies, everyone! The past day or two has yielded some good things, both in advice and in developments on my end.

 

I think I have something that will actually change the game a little bit for me, in a very good way. Remember that auto loan inquiry that I ended up not acting on? I made that inquiry on 4-27-11, with the credit union (North Carolina State Employees' Credit Union) that has the 7.75% unsecured Visa. I called them today and asked if they could use that same pull to put a card application through, since it was within 30 days of the initial inquiry. They said they could, and all I had to do was sign the card application and I should receive a card within a couple of weeks! I had ink on paper within the hour. They said that it would have to be signed off on, but that I should get the card and have something in the vicinity of a $2,000 credit limit on it! We'll see if that's actually the case, and I've got my fingers crossed, but the financial services officer sounded pretty sure of it.

 

I also asked them about secured loans (I checked their website before calling to make sure they did them); they do report secured loans, which is also great. Unfortunately, it was at this point that I found out that NCSECU only reports to Equifax instead of all three agencies. Smiley Indifferent That means that the unsecured Visa I am supposed to be receiving in a couple of weeks doesn't help me quite as much as I thought it would. From what I understand, if I had to pick one agency for them to report to, it'd be Equifax, but I would obviously prefer a revolving account that reports to all three agencies.

 

In light of this, I may still try for an unsecured card from Alliant (and appeal the decision if denied). This is assuming that Alliant reports to all three credit bureaus. Is this assumption correct? Also, which reports does Alliant pull (all three, or just one or two)?

 

On the issue of my existing JCPenney GEMB card: I rummaged through my filing cabinet and found my paperwork for the card, went on the JCPenney website, and was able to set up my online account successfully, so I would assume that means that the card is still active. I'll try to get time to go in and buy something with the card in the next week or so, as time permits, and we'll see. I had to laugh when I looked at the credit limit listed on my account online: $124.00! Big money... Smiley Very Happy I am going to try and put something on the card every month and pay it off, then request a limit increase after four months as was suggested.

 

I'd like to have 2-3 major revolving accounts, and I feel that if I can get a card with Alliant in addition to the NCSECU unsecured Visa, then I would get the CapitalOne secured card to round out the roster. I'd make deposits to build up the credit line as funds permitted over the next 6 months as suggested. This would conceivably set me on the path to a good rewards card with CapitalOne. Questions: Will CapitalOne use my application/credit pull from a couple of weeks ago to approve me for the secured card, or will they do a fresh inquiry? Also, is the process for unsecuring a CapitalOne fairly easy, after building history on two or three revolving accounts for 6-12 months (from what I understand, the sum of the credit limits for all three accounts would work in my favor as well)?

 

So, here's the plan of attack as of now:

  • Assuming I do get the NCSECU unsecured Visa in the next couple of weeks: use the card for everyday purchases and pay it off in full every month. In the event that I am approved for another unsecured card that reports to all three credit bureaus, this card will be "demoted"; used every month and then paid off in full, but just not necessarily as my primary card.
  • Make purchases with the JCPenney card and pay it off in full every month, then request an increase after the fourth statement.
  • Apply for an unsecured card from Alliant (assuming they report to all three credit bureaus), appeal the decision if denied, and keep my fingers crossed. If approved, use this card as my primary card for everyday purchases and pay off in full every month.
  • Apply for the CapitalOne secured card, build up a higher credit line over the next 6 months, use the card, pay it off in full, etc. until it's time to upgrade it to an unsecured card.
  • Possibly also open a secured loan from NCSECU or another bank (the reason for going with another bank would be to get it reported to all three agencies rather than just Equifax) to diversify and build my credit file a little more in addition to all of the above.

Since I'm rather new to this scene, I'm a bit fuzzy on some of the acronyms, namely: AU (automatic upgrade?), OC (original creditor?), DH (dear husband?), DW (dear wife?). I get all of the other ones used in this thread; my favorite being IAALBNYL. Clue me in if I'm reading any of them wrong.

 

Thanks for all of the great input in this thread; it has been VERY helpful! Please continue to post your ideas, advice, and/or criticisms, all are appreciated.


I'm not sure if they still do this, but way back when Alliant would give you a preapproval near the end of the membership sign-up process if they liked what they saw on your credit report. 

 

I forgot which CRA they pulled.

IAALBNYL
Message 18 of 32
Senior Contributor

Re: Seven years of credit history...but no real history. First card to get?

Alliant typically pulls EQ for cc app and reports it to all 3 bureaus.

 

Would definitely use the GEMB card promptly (a small purchase online may streamline the effort) since 124 is generally their courtesy CL b4 closing the acct. completely for nonuse.

 

PSECU and DCU reportedly have nice secured cards.  3 out of 4 on your acronym quiz, AU= authorized user Smiley Happy

DCU EQ 5.0, Citi EQ 08 Bankcard, PenFed EX NG2
EX 08: AFCU, Amex, Chase, PSECU EX 98(?)
TU 08: Barclays, Discover
Message 19 of 32
Moderator Emeritus

Re: Seven years of credit history...but no real history. First card to get?


@score_building wrote:

Alliant typically pulls EQ for cc app and reports it to all 3 bureaus.

 

Would definitely use the GEMB card promptly (a small purchase online may streamline the effort) since 124 is generally their courtesy CL b4 closing the acct. completely for nonuse.

 

PSECU and DCU reportedly have nice secured cards.  3 out of 4 on your acronym quiz, AU= authorized user Smiley Happy


+1.

 

For a secured card, I would look for one which will unsecure and also allow the card the grow so it can be with you long term.  Cap One may not be your best bet - but I'll let other folks who have experience with secured cards chime in.

 

Congrats on your new card!  Good work!!!  - if it only reports to EQ, then it may be a great help for the time being if you focus on other cards that pull EQ and see this card in your history.  And yes, Alliant is an EQ puller - exclusively EQ for their CC's.  There's a somewhat aged thread here (maybe about two years back) that is very helpful for those looking at Alliant.  (Even though I love their CC's, they have not impressed us with their mortgages/refis or their car loans - we went through other folks for both of those).

Just puttin' syrup on something, don't make it pancakes.
Message 20 of 32
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