A student trying to optimize their credit score

[Anonymous]

Hello,

I am a 26 year old student with a credit score of 700 that hasn't really been increasing (or decreasing) over the past year. The only form of credit I currently have is a discover it credit card. I will soon be taking out about $10k in direct subsidized student loans as well. Besides that, I have a checking account with chase and discover. I don't have an income, but will be living off of student loans and grants for the next couple of years, and would prefer to be building credit with a CC during that time rather than paying by debit card.

Currently, on my discover card, I keep my utilization below 10% but above 0%, and make sure to pay on time. I don't really know what else I can do besides that, and I would like to raise my score, at least to the 750 range.

I can't take out home or auto loans because I don't have an income (and don't need either home nor auto). The only other things I can think of doing are opening another CC or taking out a small personal loan and paying it back vigilantly.

Does anybody have some advice on where I can go from here? I would really appreciate it.

Thank you!

[Anonymous]

Hello,

When did you open the Discover IT account?

Being a student myself I have learned a lot form this forum.

Keep in mind opening new CC accounts will temporarily lower your FICO score due to each new account causing a hard inquiry.

If you receive financial support from your parents you may be allowed  under some lenders to include their annual income.

Any savings or investment accounts also count as income.

For right now you may just want to let the Discover account age. Overtime they will give you credit line increases, (I have found that if you don't miss payments that they can be generous with the amounts as well)

Best of Luck, sometimes one account is the best.

As a student (22 years old) I have acquired the following cards:

• American Express Green Card - NPSL
• American Express Gold Card - NPSL
• American Express Every Day Card - $2,000
• American Express Blue Cash preferred - $2,000
• Discover IT - $1,700
• Chase sapphire preferred- $5,000
• Citi Hilton HHonors Signature Visa - $5,000
• Dillard's American Express - $1,000
• Barclay's NFL Card - $ 1,400

Anything is possible in time =)

[gdale6]

You need at minimum 3 revolving cards to drive your Fico score. I would open 2 more even if you have to go secured.

[Anonymous]

Yes, I definitely feel like I need some more Credit Cards. I'm just worried that they will pull my score and reject me; Then I won't have the opportunity to increase my score further but still lose points.

According to my discover card (I've had this since december 2013, my first credit card), my fico is 780, but I don't believe that, seems too high. CreditKarma is giving 705 for TU and 725 for EQ. I've never officially pulled my official score.

I'm thinking of obtaining my official score from at least one of the credit bureaus and bringing it into my Chase branch, in the hopes of being accepted to chase freedom. Maybe they can give me approval odds before I go ahead with the hard inquiry. I'm also interested in the amazon visa rewards card.

I'm most concerned since I'm a student with little income. BUT, if what you said is true axe, I can use my parents as income.

Do you guys think this is a good course of action?

[Anonymous]

“You don’t need to include alimony, child support or separate maintenance income if you don’t want to rely on it.”

“Your gross annual income can include money received from several sources. Some examples of income are: salaries, investments, social security benefits, or retirement. If you are 21 or older and regularly use income from others to pay your bills, you can include that too.”

• Chase Freedom Application

* Keep in mind that any lender may require income verification from you, which may be as simple as a letter from your parent that states that they give you "X" amount of money each month for your expenses.

[Anonymous]

I agree with Axe.  If you can let us know when you opened your Discover card, that would be helpful for us to know in order to give you advice.  Axe gave you some other good advice.

Acquiring two more credit cards in the next year is a good idea too, as Gdale said.  With three CCs and the occasional installment loan (you will be starting a student loan soon) you can achieve VERY high scores.  That's all I had for a long time and my scores climbed into the 820s.

You gave us an essential piece of information which is that you are NOT trying to prepare to buy a house (or even a car) for a while.  Those purchases sound very low on your own emotional radar too -- at least for the next 4-5 years.

Following up on that, can you tell us what you think your own credit-related goals are?  Here are two different goals as an example, but you might have others:

(1)  I'd love to get my scores higher so that I can get more and more credit cards.  My goals is to eventually have ten (or more) credit cards, with a number of them being really prestigious rewards cards of different kinds -- the kind you need high scores to get.

(2)  I'd love to get my scores higher since down the road I will eventually want to buy a house. Credit cards are great but I don't need more than a few.  Getting more CC's is fine but only as a tactic if it helps me achieve the goal of raising my score.

These are two very common goals people will often have here.  As I said, you might have other goals, such as "I want 10 prestige cards and to buy a house in the next 12 months."  (Arguably an unrealistic goal, but it helps to know if that IS your goal.) 

The reason to get clear about your goals is that the advice you get should differ depending on which goal you have. 

Final note: your 700 score is a good one.  Great job, great place to be starting.  With that starting place and your attention to careful credit maintenance, you should have a bright future ahead of you.  Can you confirm for us that the 700 score you have is a true FICO score?  I assume that it is the free score you are getting through your Discover card?

[Anonymous]

Finding your opening date for your Discover account is as simple as calling the CS number on the back of the card. You can also get your credit report(s) free once a year from https://www.annualcreditreport.com/index.action . No credit scores are provided. However, this is a great way to ensure you know your average age of accounts (AAOA) and the age of your oldest account.

Best of luck

[Anonymous]

Just saw your last post: Pulling your true FICOs from all three bureaus sounds like a good idea.  And also just reviewing all three reports carefully as well.  I admit that a 780 FICO sounds odd that with only one tradeline opened (and that fairly recently).

[Anonymous]

Is it possible that for your Discover card, you are actually an authorized user on a card that belongs to your parents (a card that is possibly many years old)?  That might explain how you have a 780 FICO with only one account.

[takeshi74]

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@Anonymous wrote:

According to my discover card (I've had this since december 2013, my first credit card), my fico is 780, but I don't believe that, seems too high. CreditKarma is giving 705 for TU and 725 for EQ. I've never officially pulled my official score.

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Discover provides a TU 8.  It is valid for creditors that use that scoring model.  I agree that 780 does sound high for your profile but if you want to verify then get your scores from myFICO. Do not rely on CK's scores.  You cannot use a score generated by one model, such as VantageScore 3.0, to determine a score generated by a different model, such as FICO 8.  Don't even rely on one FICO to determine another FICO.  Keep in mind that you don't have one official score.  Creditors use a number of different FICO models.  See also the Understanding FICO Scoring subforum and its stickies.

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@Anonymous wrote:

Yes, I definitely feel like I need some more Credit Cards. I'm just worried that they will pull my score and reject me; Then I won't have the opportunity to increase my score further but still lose points.

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Hence the "even if you have to go secured" in the message you're replying to.  You won't know unless you try.  If denied you can try secured cards and there are even secured cards that do not require a credit check.  I'd recommend going for unsecured and if you're unsure of your odds then, again, pull your scores.  Though keep in mind that it's never just about score alone.

Definitely get 3 cards.  Your student loans will help as well.  Maybe not as much initially when they reduce your AAoA and while the loan to balance ratio is high but they wll help your mix of credit.

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@Anonymous wrote:

I am a 26 year old student with a credit score of 700

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@Anonymous wrote:

I would like to raise my score, at least to the 750 range.

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If you haven't pulled your scores how do you know you have a 700 and that you want to get to 750?  Again, don't rely on CK's scores unless you know you have or intend to apply with a creditor that actually uses VantageScore 3.0.