First Credit Build..

[Anonymous]

UPDATE QUESTIONS IN POST 11

I have a great job/career now and am financially secure. I have NO debt, I have always paid cash for everything. I have never had a credit card before.

I want to start investing in more real estate. My significant other and I own 2 places free and clear right now, we want to buy another to move into and keep 2 rentals and possibly/hopefully more in the future so I need to build credit..

I can afford to buy property MUCH more expensive than what I am looking at currently but my credit score, according to credit carma, is only 525! Eeek!
Well, 524 now that I've had some hard pulls..

We are still going to try to buy this deal we found right now if we can by putting a good % down and using our other equity to back it but it might not work due to this credit thing..

I don't really know much about credit apart from the last few days of reading and frankly feel that it is quite a nonsense game of jumping through hoops but I guess I'll play it because it's the world I live in..

Now a score of 524 sounds terrible but a mortgage broker I talked to said it should build very fast because their isn't really anything on it.
The only thing on my credit report is one collection that is about 6 years old and a few credit enquiries.
I think it's more like I have no credit than as credit, but I don't really know how this game is scored very well..

What I have done so far is got a secured discover it card and a secured capitol 1 card. They should come soon I think..
I plan to put Netflix on one and hulu on the other and just let them autopay that for a while.

From what I'm reading I think I should get atleast 1 more card right? Any suggestions on what to get and what to do with it/them?

I don't really care to use a credit card like these. I don't think they will be useful..
If I had something that would give me cash back and a $10k limit yeah that would be nifty but just a couple hundred dollar limit is pretty pathetic.. Can't really do anything with that and I don't really care to, other than build credit..

I don't need any loan or credit to live beyond my means, I just want to buy another house for a little life upgrade and to put money in a good place, invest.

I am thinking that I should also try to get an installment loan but I don't know what the bank will say about that. I have a few thousand in my account so you would think they'd loan me a few hundred just to get them to report credit?

I don't want to tie up cash in securing this and that loan/credit because I'm trying to save up a down payment..

I'm at the point right now that I don't need to be buying anything for myself, I have what I want, bought it already..
I don't have a TON of cash saved for a down payment yet because I just paid cash for a nice BMW, did a lot of long term reliability work to it, tricked it out with a sound system and electronics, fixed up another one of my cars for the long term, helped my mom out, and pretty much took care of anything I need..
So yeah I've spent a lot of cash recently and now I can save/invest a lot..

Like I said I want to put money into property and have my rentals and eventually more rentals, passive income, now that I can put a bit of money into my future, but I'm finding that this scheme is going to take good credit no matter if I have the income to easily afford it or not..

So, credit cards, installment loan, etc.
Give me the rundown on what to do so I can get it done..

How long do you think it will take to get to a 650 score from my position? How about a 750 score?

What all should I be doing to get into the position where I can get good rates on mortgages?

[Anonymous]

Your idea of getting a third card is fine.  Before you get the third card.... allow your other two cards to appear on your report.  As soon as each card comes in the mail, activate it and use it for something small.  Then keep one card at a $0 balance and allow the other card to report a small balance each month.  Then pay it off after the statement prints.

Once you have two cards on your report, one with a small positive balance and the other with a $0 balance, you can get your third card.  Then your idea is good: namely use each card for something small each month, allowing them to report on the statement, and then pay the statement in full after it prints.  Do that for at least a few months.

While you are working on that, pull all three reports and get very familiar with what is on them.  You must have derogs of some sort -- you mention a collection but there may be others.  Head over to the Rebuilding forum promptly and develop a strategy with the folks there on how to get your derogs removed.

Since you have no installment accounts of any kind, closed or open, creating a history of having an open installment account that you have never been late on sounds great.  Personally I'd wait until you have those cards on your report as I described above, and then implement the Share Secure Loan Technique.  You can find out about it here (just read the first 2-3 posts):

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

After you have made progress on your derogs, have three cards, and have fully implemented the SSL technique, it will probably be time for you to pull your true mortgage scores at myFICO (the scores from Karma are worthless, though their reports are great).  You will need to wait until you have had an account for six months before you do that.  And about 40 days before you pull the scores, make sure that all your cards except one are reporting $0.

[Anonymous]

I have 1 6 year old collections derog on carma which only pulls the 2 reports.

I ended up getting ahold of my experian report and their was an additional derog on that one too.. 

It was only for $42 and I paid that like a year ago so I called the collection agency and explained it to them. They said they would call the original company the $42 came from and find out if I paid it. They did actually call them and they told them I paid it like I said and the collection agency said that they would get it removed from my credit report for me but it would take up to 60 days for the derog to actually dissapear though.. 

The lady was actually really nice and sympathetic on the phone and actually believed me that I paid it, surprisingly, and even replied to my email asking for confirmation that it will be removed after they sent me an emial of a reciept for it being paid when they figured it out with the original company.. 

The one drog left is for about $650 and I'm planning on just letting it fall off.. I think.. 

Yeah I know what it is and it is my fault. My life got kicked in the butt back then, I had to leave for a while and my GF at the time abandoned my house and my bills and let the whole neighborhood crash my house and... Yeah. An electric bill. 

I was in no position to pay that for a long time.. I could pay it right now no problem but think it could be more harm than good to not let the sleeping dog lay.. 

The most inquiries I have on any report is 5.. I tried for credit on paypal a year ago or something, applied to lowes at the advice of my pnc bank, applied to my bank and got rejected for anything but a secured card with $75 yearly fee that I turned down, I think discover may be on there for that secured card just now, couple others I don't recall... 

I'm not really worried about them and I'll probably end up with a couple more trying to get a personal loan going and another credit card of some type soonish.. Maybe more I don't know... 

My GF wants an X5 so I might go try to get a personal loan to cover that.. I can get one for $3,000-$5,000..

I'll ask my bank if they will do it without a hard pull. If theu just look at my account they will see that I could pay it off in cash in 2 weeks if I anted to so maybe they will go for it..

Even if they will only loan my like 50% of it and I pay the other %50 in cah that would be fine too.. Or even %25, whatever..

Just preapprove me so I can go find the one I want..  

Ive never had a car loan.. Long story short all the people I pass in their boring $30,000 cars with a payment secretly wish they were driving my $5k er so paid for cars.. 

My grandpa likes to brag about his credit score so I've been kicking around the idea of doing the authorized card user thing with him. I have very good credit with him personally, and many others really.. He owes my right now anyway for redoing the front end on his ford and puling an engine for him.. 

But the thing is is that he is old and somewhat hard to communicate with because he can't hear like at all almost.. When we are together its mostly hand signals really. 

So trying to explain to him about how the authorized user thing works, and me confirming somehow that this credit card history is infact very good despite his brags, and then actually convincing him of the deal and getting him to do it.. That would really be a lot of effort and pretty akward for me because I hate asking anyone to do something for me.. 

I talked to Discover today and I guess I typed 1 number wrong on my checking account number. We redid the application on the phone and were even able to completely skip the 2 small deposit confirmation thing.

I hope that typo and communication about my mistake didn't hurt my reputation with them..

So with these credit cards...

Do I really need to only spend 10% or so every month and pay it off before it reports/leave a tiny report, or can I spend a lot on them, pay it off multiple times, and just make sure its paid when it reports?

I'm on the road a lot of the time so 2% cash back at resturants and gas stations is pretty cool.. I spend $1,000 a month there anyway, gas stations and resturants.. 

So can I spend a $1,000 a month on that card and just pay it off every day or will that look bad? I'm thinking that the credit card company might like that a lot and want to give me a better card if I'm a legit heavy user but maybe it would look bad according to the rules of the game? 

I travel a lot and stay in hotels 20 nights a month but I don't pay for the travel or hotels so I have no use for hotel and airfare points.. 

It seems a lot of the credit cards are aimed at business type people that go on flights and stay in fancy hotels all the time.. 

Where are the cards that will give me %5 cash back at the auto parts store and ebay motors? That's what I need.. 

[Anonymous]

I have now been denied by alliant credit union and for a BOA secured card.. 

How the heck do you get denied for a secured card? 

I put in an application for a city secured card and I did not get approved instantly, check back in 24 hours, should recieve mail/email within 1 week story. 

So I probably got denied by citi for a secured card too? Hmm...

[Anonymous]

Little update..

That one old collections seems to have fallen off!!!

Atleast that's what credit Carma says since it just updated, from my eq and tu, but my ex app hasn't changed and it's still showing there..

Pretty awesome if it's real and not some glitch..
But now it says I have NO score..

I got the alliant loan to work and set up..
I have a disco and cap 1 secured in the mail..
Citi took my deposit a while ago and I just checked again while writing this and it is approved...

!!!!
I should be off to a great start now with NO collections, 3 credit cards, and my installment loan..

Just have to wait like another month to see what goes down (hopefully up)..

[HeavenOhio]

The Alliant loan will cover your scoring "need" for a loan. The trick is for a loan to be open and mostly paid off. The great thing about the Alliant SSL technique is that you have the benefit of a mostly paid off loan for five years.

Only get other loans if you need the money.

[Anonymous]

So can I spend a $1,000 a month on that card and just pay it off every day or will that look bad? I'm thinking that the credit card company might like that a lot and want to give me a better card if I'm a legit heavy user but maybe it would look bad according to the rules of the game? 

It sounds like you have made some great progress so far!  Be aware that some credit cards have a limit as to how many payments you can make per month.  You certainly don't need to make daily payments, weekly or bi-weekly should suffice if you don't have a high enough limit to carry the monthly spending on them.  It may take a while for you to generate a score again if there is no longer anything left on your report, but once you have one again, it should be a very solid score since you won't have any derogs bringing your score down.  

[Anonymous]

[img]https://i.imgur.com/hwDDBtq.png[/img]
https://i.imgur.com/hwDDBtq.png

[jamie123]

Building credit is a marathon and not a sprint. It is not that difficult, but just takes a credit move here and there with a waiting period between moves. Almost every time you make a credit move like apping for a new credit card your scores will decline for 6 months to a year but then bounce back even higher than before.

You just need to make a few moves like you did now in getting 2 credit cards and the SSL with Alliant. Now you need/should wait for at least 6 months before making another credit move. You have 6 months to plan your moves to ensure that you are making the best moves possible to move your scores up and put yourself in a better position for the next move. Your scores will climb during these 6 months that you are waiting which will then allow you to apply for and get approved for better credit cards. You know...The good ones that get you money back at the auto parts stores! Yeah...You won't get approved for the best cards unless you have decent scores of at least 680 and actually 700+ is better.

Credit cards are the foundation of good really high scores that will stay with you for life. A credit card account is really the only kind of account that you can keep open for life. Sure you can get a 30 year mortgage but most people move after 5 or 6 years and you have to start over again.

You want to end up with 5 to 8 high quality credit cards that you can keep open for life but you might need to get 3 or 4 starter cards to build your scores high enough to qualify for the good cards. Once you have 5 credit cards that are about 5 years old, and maintain good credit behavior, (Pay your bills on time and keep balances low.) you won't have to worry about your scores for the rest of your life.

EDIT: You need 6 months of credit history to generate a score. If you don't have 6 months of history you won't have a score.

[Anonymous]

Everything had been going great until today a new collection popped into all 3 of my reports by a new collection company I've never scene before for the same old ancient debt that just fell off a couple months ago!!!

GRRRRRRRRR!!!!!!!!!!!

Now I have to figure out how to dispute it or whatever because I'm sure this original debt is so old that it should not be on my reports but this company put it on my report like it's just a couple months old..

I'm sad and angry and want to call them and chew their asses but I think I should probably post here with my problem and find out how to take care of it correctly so I don't make it any worse..