First try Discover Pre-qual. https://www.discovercard.com/application/preapproval/initial If they say your good to go. Grab the cash back iT card. Now. Then you'll have 3 cards. Discover has cash back match. So say its grocery time. You get 5% cash back on all your groceries for the quarter. End of the year. They match that. You are a business with your cards. You earn cash back for using a banks card. Now when it comes time to pay. Have 1 card either your Discover or your MC report a balance of <8% on statement date. Then pay it off before the due date. No interest paid. The cash back is yours as in profit. As we say All Zero Except One or AZEO. Use the cards all you want. Just pay down before statement date 2 of the 3. Have the one report as I mentioned above. Let the banks pay you to use the card. Not you paying the banks as in interest and you lose some of the cash back you got. Repeat it each month.
As for the 50-100k. Savings CD's. If it is ever needed you have it. If you put 100g's on credit and the APR is per say 20%. Thats 20g's a year in interest. So throw that out the window and the emergency $ in savings. The reason to hit 3 cards is because FICO doesnt like more than 50% of the total cards reporting a balance. With 3 cards and 1 reporting. Your under that %.
@kallisonmk wrote:
It's crazy how the system works. I can't get a loan because I've never needed to borrow. I've bought all 5 houses and 11 cars cash so being I've never used credit I have no fico. However someone with a history of borrowing can get a loan with awesome apr.
You really are in the best of positions: You have decided to set yourself up for success without a hard deadline. You told us you are a planner and I suggest you put those skills to use. You know you frequent stores with store cards of their own. See if they have co-branded store labeled bank cards (Visa/MC/AMEX), too. If you want a small set of cards leaning into bank cards instead of store cards is going to be most helpful for score boosting.
It's said on these forums that 3 revolving lines and one installment loan is a good baseline for maximizing scores. Figure out which cards you can make the most of as far as rewards. I don't think you need to apply for secured cards. Do some SP prequalifies for cards that look like a good match for your purposes and get a feel for what is out there. I would recommend you research the different rewards schemes and card benefits that are available. Once you start learning about them some may be just the thing you never knew you couldn't live without.
You already have an unsecured bank card, more will be available to you. I would let things settle in for about 6 months (get your new accounts reporting and move some spend through the cards) and then apply for your third card. Six months later, maybe another. You can look into an SSL loan for a cheap way to establish an installment line for your credit mix. If you are looking at a car in the near future you can always just finance some of the cost and pay down the balance ahead of time to save on the interest. You aren't in any hurry, you can plot this out. Just take your time and have fun with it.
My thoughts on how to use your new cards are that you have been paying for everything with a debit card and cash for years. Now just figure out how you are going to assign each of those expenses to the card that will benefit you most (points/discounts/etc). Then you just pay the balance from your checking to your credit cards every month. Don't carry balances, there is no need. Play the AZEO game if you want, or not: The score boost only matters when you are going to apply for something. All it takes is a few extra minutes a month to get rewarded for spending money that you are already spending anyway.
Also, you may get offers for additional cards from the companies you already have cards from. If you are going to only have a few cards I would suggest diversifying to at least three different issuers just in case one should have a meltdown right when you absolutely need to be able to use your card. Networks go down, banks screw up and freeze accounts that shouldn't be, all sorts of things can happen that mean you can't use the card you intended to. Multiple issuers (and networks - Visa, MC, AMEX, Discover) help you avoid getting shut down when things get weird.
Good luck on your credit build!
@kallisonmk wrote:
I figured if a situation ever arose and needed $100k I'd need a good fico score in order to do anything.
After reading your posts, I'm a little confused about something. Perhaps you can clarify. 
You're earning ~$70K/year, correct? And you have no debt? Why don't you have considerable savings?
Before I was forced to retire early (due to illness), I was earning >$100,000 but I had a mortgage and assorted other bills to pay, including my own and my daughter's college educations (with no student loans) along the way. I socked away money like there was no tomorrow! I've been hit by not one, not two, but THREE catastrophic illnesses that resulted in gigantic medical bills--with various financial results. With the most recent one, in 2016, my portion of the bills came to over $100,000--and I paid every penny of that from savings. I didn't need to rely on credit (which I have a TON of available), nor did I ever worry about mortgaging my house (which I own free and clear). I'm just unclear on why you're not able to put your hands on, say $100,000 if something unexpected happened, given your financial circumstances.
I realize I do not have *all* your information, or know *everything* you know about your finances, so if I'm overlooking something that prevents you from putting money away every week/month, please forgive me.
As for credit, or the lack thereof, my mother had no credit whatsoever until she was in her 60s. She--and everyone else in my family--had always paid cash for everything, from houses to cars to groceries. They did not believe in credit, because they'd suffered from my grandparents' experience losing everything in the Depression. They thought debt was evil, and should be avoided at all costs. My mom was finally convinced to get a credit card (Discover); she paid in full religiously every month, never once paying a cent in interest or fees. It's harder now than it was in 1991 (when she got her one and only CC) to get credit if you don't have a credit history, so anything you can do to build a credit file will help in the long run. You've gotten some great advice in this thread which should help get you going!
@kallisonmk wrote:My apologies for lack of information.
I am 42 years old.
I personally have never had any form of credit. Years ago in my 20s there were medical bills negative in my CR. As well as an authorized user on a Sears card. Those have since been gone.
Within the past year I've thought of establishing credit. Upon shopping at Bed Bath & Beyond I was decided to apply to receive a decent coupon. Of course now I learned from these forums I could've done it differently for a SP. I then decided to apply for a Rewards card from my bank and was approved for $1k.
I do not have a recent nor current employment that would be on my CR.
The approval paper from my bank had my fico at 728. However upon signing up at EX I have no FICO for all 3. AV3 has me at 622 & 685.
In a short while you will have credit scores on all 3 bureaus. If you want to find out now where you stand, pull a 3 bureau report and you'll know where you're starting out from.
So I gather you presently have 2 cards. Each month pay your store card down to zero before the statement cuts, and let your bank card report a small balance, then pay it right off.
Technically, you don't need more cards to establish a great score over time. But if you want to get more, let us know your scores in 3 months, and let us know what kind of credit account you're interested in adding, and we'll see where to go from there.
@kallisonmk wrote:
@FireMedic1 wrote:Well your going to have to build some credit. You have 1 card so far. As the poster above said. You could start with a Disco secured. Every 6 months apply for another card. Any one in the military where you could join NFCU? The 50-100k in credit is years down the road. Nor do you want to rack up that much debt. Its baby steps for now.
Exactly! After thinking about it I realized I may be "asset rich" but I'm "credit poor" 😆. So if I came across the need of $100k I would have a hard time obtaining credit and I don't want to use collateral. Figured I better start now.
I actually have the 2 cards since Aug. The BB&B store card and my bank's unsecured Rewards MC. Would you still recommend a secured Discover if I already have an unsecured through my bank?
Yes I definitely do not want debt 😆. I've been debt free for over 20 years. Which brings me to another question...
Being that I have the funds for purchases and I would be using the card solely for credit building how should I pay the CC?
- In full the same day? Or a day after?
- Pay in full AFTER the statement?
- Keep a balance < 9%
Also I'm a "pro shopper" 😆. I'm very good at finding bottom prices and deals such as 14 pairs of women's boots for $100. I'm also an "extreme couponer". I have 2 rooms in my house designated for these. A grocery room and 4 deep freezers and a "clustercrap" room with clothes, shoes, toys, kitchen/bath, small appliances, home decor etc.
I shop at many stores that offer great perks to cardholders... One of my main stores is Kohl's especially since 2020 they are more stingy with coupons. Thoughts on store cards?
I've been pre-approved for Cap1 Unsecured Platinum $500 limit... Thoughts?
OK so if you're interested in the type of credit where you can actually access money, as opposed to just making purchases, your best bet is to start building relationships with credit unions that have (a) non-rewards platinum cards with low interest, no cash advance fee, and no balance transfer free, and/or (b) personal lines of credit with modest interest rates. There are many such credit unions. You should look into those which are available to you based on their "fields of membership". Some which have membership open to all are Unify FCU, Langley FCU, Navy FCU, Chartway FCU, Consumers CU (Illinois), Evansville Teachers FCU, and Affinity FCU.
