How can I help my son?

[itzateach]

My son is 19. He has 2 accounts...one is a car loan from the Credit Union that is a year old next month. The other is a bank line of credit of 300.00 that has high utilization right now. Both have never been late. He applied for a Walmart card and this is the denial reasons he got back:

AVERAGE RATIO OF REVOLVING BALANCES TO CREDIT LIMITS IS TOO HIGH
NUMBER OF MONTHS SINCE OLDEST REVOLVING ACCOUNT OPENED TOO LOW
HIGHEST RATIO OF REVOLVING BALANCE TO CREDIT LIMIT IS TOO HIGH
HIGH RATIO OF REVOLVING ACCTS OPENED LAST YEAR TO ALL REVOLVING ACCTS
NUMBER OF INQUIRIES ON CREDIT REPORT

He has a few inquiries because he has tried to get credit on his own like through walmart, orchard, and kohls and been denied. His score is like 407...I am shocked. What can he do to raise his score?

[Booner72]

You could put him as an AU on one of your good, low balance, longstanding accounts, as long as they report .  I put DH on 2 of my cards and I swear to you, his score went up 100 points!

[llecs]

Are you certain the 407 is a FICO score? In other words, did Wal-Mart supply that score? IMO, 407 would be indicative of some serious baddies, though it certainly isn't listed in the denial reasons.

Per util on the LOC, paying that down to $1, for example, would wipe out denial #1 and #3. Time can only get rid of #2 and #4 and #5. Also tell him to stop applying for a few months to let those inquiries age.

[p-]

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@llecs wrote:

Are you certain the 407 is a FICO score? In other words, did Wal-Mart supply that score? IMO, 407 would be indicative of some serious baddies, though it certainly isn't listed in the denial reasons.

Per util on the LOC, paying that down to $1, for example, would wipe out denial #1 and #3. Time can only get rid of #2 and #4 and #5. Also tell him to stop applying for a few months to let those inquiries age.

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It sounds like with his utilization being so high and applying like crazy he's at risk for getting himself in real trouble.  Why is he applying for so much credit?  Does he want to spend more than he has on hand, or is he trying to build credit for the future?  At that age it's easy to take action without a specific goal in mind.

If he was my son I would make him a deal;  Tell him if he reads these threads and can explain to you his strategy for keeping his balances low and maximixing his credit score, as well as keeping out of danger, then you will add him as an authorized user on a good account.

That would, as A stated, improve his AAOA, and utilization.  You might want to walk him through a pull of his files at annualcreditreport.com.  If he's in the 400's there's likely more derogs in his file than you are aware of.  He might be better off not borrowing any more money until he deals with the issues he has.

I wish I knew at 19 all that I know now, or at least all that is taught here.

Good luck.

[haulingthescoreup]

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@itzateach wrote:

My son is 19. He has 2 accounts...one is a car loan from the Credit Union that is a year old next month. The other is a bank line of credit of 300.00 that has high utilization right now. Both have never been late. He applied for a Walmart card and this is the denial reasons he got back:

AVERAGE RATIO OF REVOLVING BALANCES TO CREDIT LIMITS IS TOO HIGH
NUMBER OF MONTHS SINCE OLDEST REVOLVING ACCOUNT OPENED TOO LOW
HIGHEST RATIO OF REVOLVING BALANCE TO CREDIT LIMIT IS TOO HIGH
HIGH RATIO OF REVOLVING ACCTS OPENED LAST YEAR TO ALL REVOLVING ACCTS
NUMBER OF INQUIRIES ON CREDIT REPORT

He has a few inquiries because he has tried to get credit on his own like through walmart, orchard, and kohls and been denied. His score is like 407...I am shocked. What can he do to raise his score?

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First of all, I hope he pays off his CC every month, and ideally, the line of credit as well. He doesn't need to get into the terrible habit of carrying balances and paying interest.

Secondly, if he does pay them off in full, he needs to start doing so before the statements post with what he owes, because in almost every case, that amount owed is what's reported and what's used to determine his utilization (amount owed divided by credit limit.) Tell him to pay one off right before the next statement, thereby making it report $0, and pay off all but ten bucks or so on the other account, let that amount report, and then pay it off before the due date. <-- that second part is very important, and very easy to forget.

With only two revolving accounts, it's really easy to wind up having high reported util.

Otherwise, it's like the others said, he needs to just stop applying, ideally until the newer account is a year old, but at a minimum until it's at least six months old and the other is at least a year old.

And I agree, 407 is way too low unless he's over his credit limits or something. Was that perhaps a typo?

[AndySoCal]

Antoher idea is a secured credit card. Yoiu can ask your bank if they offer one. The minimun amount needed would be around $300.00 or more.