Credit Advice for Newbie

[aag415]

Hi Everyone,

I’m new to all of this and need some advice. I finished grad school last year with a ton of debt, hit a financial rough patch while job searching. Got a great job in Nov. 2013, all accounts are now in good standing. Given the fact that I already have an extreme amount of debt working against me, I want to stay on top of my credit and maximize my scores as much as possible. So I’ve been monitoring my reports/scores using various sites. I now know that these scores are “FAKO” scores, but this is what I have:

Experian Credit Tracker (paid) - 683 (up from 601 in March)
Credit Karma - 616 (up from 580 in January)
Credit Sesame - 654
Equifax - 649

Average Age of Accounts - 5 years 7 months (oldest is 7 years 0 months, newest is 2 years 11 months).

Collections:
I had my cable ($120), electric ($80), and checking account ($1000…overdraft mess) go to collections last fall. All were paid in full by Feb. 2014. Experian had the cable account listed but I had it removed. Equifax never showed any of these. Couldn’t get my free TU report, but I know the cable account showed up on Credit Karma a while back. CK now has my number of derogatory marks/open accounts in collection as 0. The bank reported to ChexSystems, but after I paid I was able to open a new bank account. Will any of this hurt me even if it’s not on my credit report?

Installment Accounts:
15 student loan accounts totaling $317,588 - all in good standing, no missed payments. Utilization is 106% because interest accrued throughout my 7 years of college/grad school while the loans were in deferment.

Revolving Accounts:
Citi Forward Card - 6 years old, $5000 limit - current balance $4581 (91% utilization)
I have 6 years of on-time payments except 2 months (Oct/Nov 2013) listed as 30 days late.

I was just added today as an AU on 2 of my dad’s credit cards (he has great credit). Are these likely to help me?:
Home Depot (Citi) - $5700 credit limit, current balance $293
Best Buy (Citi) - $1900 credit limit, current balance $0

I applied for the Capital One Platinum Card today since I was pre-approved, but I was denied. Should I try for a secured card or just wait it out until my credit improves and I can get a card I really want (like Capital One Venture or Delta SkyMiles)? Since my credit utilization is so high, would the benefit of new unused credit outweigh the disadvantages of hard inquiries/short age of a new account?

I also need some advice about credit monitoring and what scores I should be checking. Should I ditch the Experian Credit Tracker and sign up for myFICO Score Watch? I’m mostly interested in what scores the credit card companies would be pulling. And maybe auto lenders as well…I’ll probably be in the market for a new car in the next couple years.

Any advice would be much appreciated! Thanks!

[Ellifino]

If possible, I'd bring down that utilization before apping for anything else.

[TitaniumCash]

Being added as an AU should help. Can you get the Citi Forward down to 30%? Then wait a couple of months and try again.You will get there, it just takes some patience.

[takeshi74]

---

@aag415 wrote:

I also need some advice about credit monitoring and what scores I should be checking.

---

I always suggest monitoring the data in your report.  Scores are based on the data in your reports.  A good report will lead to a good score.  Scores can vary by scoring model and CRA so fixating on the numbers isn't really all that beneficial considering that a given creditor may use a different model and/or CRA than what you're monitoring.

---

@aag415 wrote:

Revolving Accounts:

Citi Forward Card - 6 years old, $5000 limit - current balance $4581 (91% utilization)
I have 6 years of on-time payments except 2 months (Oct/Nov 2013) listed as 30 days late.

---

Definitely get that utilization down as you're maxed and getting dinged for that on top of being dinged for high utilization.  Leaving it high for too long can lead to AA and you want to avoid that as you'll never be able to get your utilization down if they start to balance chase.  Your utilization should not exceed 30% max.  If you can, get in under 10% prior to applying.  Revolving utilization is the second biggest slice:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

...and even if you can get an approval with high utilization you will get terrible terms and limits.  With high utilization Chase would only approve me for a $2K limit with the worst APR offered.  Severl months later, I dropped my utilization and was instantly approved for $25K.  Not saying that your credit support that sort of limit -- just demonstrating how restricting utilization can be.

Payment history is the biggest slice so address your derog(s).

---

@aag415 wrote:

I was just added today as an AU on 2 of my dad’s credit cards (he has great credit). Are these likely to help me?:

Home Depot (Citi) - $5700 credit limit, current balance $293
Best Buy (Citi) - $1900 credit limit, current balance $0

---

Utilization is low so yes on that aspect.  However, some creditors don't factor in accounts where you're an AU.

---

@aag415 wrote:

I applied for the Capital One Platinum Card today since I was pre-approved, but I was denied. Should I try for a secured card or just wait it out until my credit improves and I can get a card I really want (like Capital One Venture or Delta SkyMiles)?

---

You should stop applying and get that utilization down.  Refer to CO's reasons for denial and address them.

---

@aag415 wrote:

I also need some advice about credit monitoring and what scores I should be checking.

---

I always suggest monitoring the data in your report.  Scores are based on the data in your reports.  A good report will lead to a good score.  Scores can vary by scoring model and CRA so fixating on the numbers isn't really all that beneficial considering that a given creditor may use a different model and/or CRA than what you're monitoring.

[aag415]

Thanks for the replies. I'm definitely going to focus on getting my utilization down - it won't happen as quickly as I'd like since the majority of my income goes to student loan payments, but I have been putting as much as I can toward my CC balance every month...it was actually completely maxed/slightly over limit at the beginning of the year, so it's going down slowly but surely.

My dad has added me as an AU on another 3 store cards. So the total credit limit of my AU accounts is $18,880 and total current balance is $259. Average age of the five cards is 4 years 3 months, so my AAoA would go down slightly. But overall utilization would drop to about 20% if all of these are actually reported. They all claim they will report, but we'll see. Worth a shot anyway.

I ended up subscribing to Score Watch, and also bought my TU score/report from myFICO. So I now have all 3 reports, current as of this week. The good news is that they are all pretty consistent. None of the collection accounts are reported, but the two 30 day lates from Citi are on all of them. The only thing that differs is that one of my student loan accounts (ACS Perkins Loan) is on Experian only. I doubt it makes much of a difference since it is only 1 of 16 loan accounts and is only 2% of my total loan balance, but it shows a history of on time payments.

Scores: EQ FICO - 673; TU FICO - 669; EX FAKO - 674

So my questions are - should I try to get the ACS loan added to EQ and TU or don't bother? And should I attempt a GW letter to get the Citi lates removed? They are legit...I was unemployed and simply couldn't make the payments. I never would've thought to attempt to have them removed until I read about GW letters here. Given that the lates are accurate and recent, the CC is open with a high balance, and I have an excellent interest rate I don't want to lose (10.99%), should I just leave it alone?