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New to the world of Credit.

SouthJamaica
Super Contributor

Re: New to the world of Credit.


@Hypnagogia wrote:

@pinkandgrey wrote:

SouthJamaica said it. Start with a secured card. Is it possible to have a cosigner for the car loan? An installment loan will be an excellent addition to your credit. If you can’t though, don’t worry about it. What I said above is how I did it. I had a cosigner for a car loan, and I started with the Cap One Platinum card. Mine was unsecured, which you MAY be able to get. The SL will be small either way, but it’s a great start. Within 6-8 months you’ll probably have made great progress.

Good luck! 



Unfortunately a co-signer is not possible. As for the Capital One Platinum card, I went onto their website and the only card I pre-qualified for was their secured card.

 

Anyway, Discover just took my deposit out yesterday and I should be getting my card in a few days. With that said, would it be a good idea to get the Capital One secured card to go along with the Disco Secured card, or should I wait a little while before I apply for a new card?


No, Discover is better than Capital One. Forget Capital One. Just wait.


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 758 TU 777 EX 749

Message 11 of 23
SouthJamaica
Super Contributor

Re: New to the world of Credit.


@Hypnagogia wrote:

One more thing, what is a credit builder loan, how do I apply for one and who would you reccomend I go through for this loan?



I don't recommend it at your stage. It's a small secured loan, just like a secured credit card. You don't need that.

 

 


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 758 TU 777 EX 749

Message 12 of 23
Anonymous
Not applicable

Re: New to the world of Credit.


@Hypnagogia wrote:

Unfortunately a co-signer is not possible. As for the Capital One Platinum card, I went onto their website and the only card I pre-qualified for was their secured card.

 

Anyway, Discover just took my deposit out yesterday and I should be getting my card in a few days. With that said, would it be a good idea to get the Capital One secured card to go along with the Disco Secured card, or should I wait a little while before I apply for a new card?


If you need that car as fast as possible, don't get anything else now and just use that Discover card for a solid year. Use it every week, pay it off multiple times a month if you need to, and let the statement balance report somewhere between 0 and 9% utilization.

 

To see a few more points at the 6 months mark, keep it between 0 and 4% utilization. (Not necessary any other time, this is just to see your score as high as it can be at 6 months.)

 

I've done a lot of research on what to expect when starting from scratch with a new card or two, and a lot of people end up with FICO 8 scores around 750-760 at the 8th month mark with only one card. And it's almost always a Discover secured card or a card for students.

 

That's really starting from scratch, with no public records and no credit history at all.

 

Also, in January if you're curious and want to check what all 28 FICO scores are at the 6 month mark by using a 3B report from here on myFICO, wait about 5 days after you receive January's statement. Otherwise, the report might not show all possible updates to all 3 bureaus.

Message 13 of 23
Hypnagogia
New Contributor

Re: New to the world of Credit.


@Anonymous wrote:

@Hypnagogia wrote:

Unfortunately a co-signer is not possible. As for the Capital One Platinum card, I went onto their website and the only card I pre-qualified for was their secured card.

 

Anyway, Discover just took my deposit out yesterday and I should be getting my card in a few days. With that said, would it be a good idea to get the Capital One secured card to go along with the Disco Secured card, or should I wait a little while before I apply for a new card?


If you need that car as fast as possible, don't get anything else now and just use that Discover card for a solid year. Use it every week, pay it off multiple times a month if you need to, and let the statement balance report somewhere between 0 and 9% utilization.

 

To see a few more points at the 6 months mark, keep it between 0 and 4% utilization. (Not necessary any other time, this is just to see your score as high as it can be at 6 months.)

 

I've done a lot of research on what to expect when starting from scratch with a new card or two, and a lot of people end up with FICO 8 scores around 750-760 at the 8th month mark with only one card. And it's almost always a Discover secured card or a card for students.

 

That's really starting from scratch, with no public records and no credit history at all.

 

Also, in January if you're curious and want to check what all 28 FICO scores are at the 6 month mark by using a 3B report from here on myFICO, wait about 5 days after you receive January's statement. Otherwise, the report might not show all possible updates to all 3 bureaus.


You can make multiple payments a month? I thought you could only make 1 payment per billing cycle? 

 

So hypothetically, let's say when I first get my card and the first week I charge say 25 dollars for gas... I can pay it off right away? Then the second week I charge say 30 dollars for groceries and then pay it off again all within the same month? 

Message 14 of 23
Anonymous
Not applicable

Re: New to the world of Credit.


@Hypnagogia wrote:

@Anonymous wrote:


If you need that car as fast as possible, don't get anything else now and just use that Discover card for a solid year. Use it every week, pay it off multiple times a month if you need to, and let the statement balance report somewhere between 0 and 9% utilization.


You can make multiple payments a month? I thought you could only make 1 payment per billing cycle? 

 

So hypothetically, let's say when I first get my card and the first week I charge say 25 dollars for gas... I can pay it off right away? Then the second week I charge say 30 dollars for groceries and then pay it off again all within the same month? 


Yes, you can do that. When a charge goes from 'Pending' to 'Posted', you can make a payment for that charge.

 

Many people use the secured card like a 'delayed debit card' and put even more than $500 a month through it by just paying it off each week.

 

You could also charge $200 or $300 in one transaction to it, and pay that off as soon as it posts. Just try and keep the monthly reported statement balance between 0 and $45 (9% of 500). As long as you pay the statement balance by the due date, you won't have any interest to pay.

Message 15 of 23
pinkandgrey
Community Leader
Senior Contributor

Re: New to the world of Credit.


@Hypnagogia wrote:

One more thing, what is a credit builder loan, how do I apply for one and who would you reccomend I go through for this loan?



I agree about holding off on Cap One. I personally don’t recommend having a ton of secured cards. One is good to build your credit to the point of getting unsecured cards. As for the credit builder loan, I wouldn’t do it. That’s just my personal stance on that though. I won’t ever take on a loan that I don’t need, regardless of my credit score. Good luck! 

Discover It: 19.7k
Amex ED: 18k
Citi DC: 7.7k
Fidelity Visa: 2k
Apple Card: 1.5k
Message 16 of 23
RealityBites
Established Contributor

Re: New to the world of Credit.


@pinkandgrey wrote:

. I personally don’t recommend having a ton of secured cards. One is good to build your credit to the point of getting unsecured cards. As for the credit builder loan, I wouldn’t do it. That’s just my personal stance on that though. I won’t ever take on a loan that I don’t need, regardless of my credit score. Good luck! 

My guess would be that if they're of any value at all, it's for people rebuilding from bad credit. A new person just needs to use their credit responsibily 





Message 17 of 23
Hypnagogia
New Contributor

Re: New to the world of Credit.

Quick question......

 

Remember when I said "I tried to finance a used car"? Well according to Experian, I now have 8 Hard Inquiries on my credit report, even though I only went to two dealerships. Why do I have 8 inquiries? Some of them are even from the same financing company(Capitol One), showing up as 2 distinct inquires with different dates. All of the inquires were made within a 5 day period. One of them is from Discover, but the rest are from known and unknown auto financiers.

 

Is this going to affect my credit?  Will this make it harder for me to establish good credit? What should I do? What can I do?

Message 18 of 23
SouthJamaica
Super Contributor

Re: New to the world of Credit.


@Hypnagogia wrote:

Quick question......

 

Remember when I said "I tried to finance a used car"? Well according to Experian, I now have 8 Hard Inquiries on my credit report, even though I only went to two dealerships. Why do I have 8 inquiries? Some of them are even from the same financing company(Capitol One), showing up as 2 distinct inquires with different dates. All of the inquires were made within a 5 day period. One of them is from Discover, but the rest are from known and unknown auto financiers.

 

Is this going to affect my credit?  Will this make it harder for me to establish good credit? What should I do? What can I do?


Car loan inquiries like that are grouped together, and will not count as 8 inquiries. It will be seen as much less within the scoring algorithms. Not to worry.


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 758 TU 777 EX 749

Message 19 of 23
Hypnagogia
New Contributor

Re: New to the world of Credit.

Okay, I got some good news and some kind of weird news. First and foremost, I GOT MY FIRST CREDIT CARD! The good news is my Discover card arrived in the mail today and I'm about to activate it. The kinda weird news is, I also got a letter from "American Credit Acceptance". Supposedly they are one of the auto lenders that CarMax uses. Anyway, in the letter a credit reporting agency by the name of SageStream LLC says that my credit score is "444". They go onto say that scores range from 1 to 999. Which is weird becuase every credit scoring model I've seen ranges from 300 (the lowest) to 850 (the highest). 

 

What exactly is going on? How do I have a score if I've never had credit? Futhermore, why wasn't this score on Experian? 

 

I'm confused.

Message 20 of 23
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