@Anonymous wrote:
I've been reading these forums for a while and they are a great source of information. First post for me though. I am concerned that my recent credit activity may have damaged my score, but I'm not sure how to fix it (if it can be).
In April of this year I had a grand total of 1 account, a 3 1/2 year old student loan. 100% ontime payments. I figured I'm in my 20s, dependable job, great time to get a credit card! I found one that I really wanted (total rewards visa) and applied for it. That's when I found out what a thin file was. They pulled equifax and denied me. I tried a recon, but got nothing. Their helpful advice... get one of our store cards. No thanks.
@Anonymous May, I tried again, this time for a Discover It card. They pulled Experian (which showed a 713 score) and approved me for 1000 cl. I was so excited. Then I found out that I need to keep my credit utilization low, and the credit limit didn't give me much wiggle room. So I found out about this awesome thing called preapproval, and visited various credit card websites to see If I could get preapproved for any cards. Only one came back with preapproval, capital one. I was afraid the offer would go away, so I applied and was instantly approved for the Quicksilver @ 3000 cl. Yay!
I found out afterwards that capital one hard pulls all three reports. Ouch. I've now been watching my credit report like a hawk using Credit Karma and the FICO score issued on my Discover It statements. First the hard pulls hit, then the the Discover card appeared. Each time (per credit Karma) my score dropped. Quicksilver has yet to appear. Discover It still reports my score at a 727, which seems impossible given my recent activity. Credit Karma has dropped me to a 691.
I am concerned that the downward trend will continue. Especially once the Quicksilver starts reporting. What should I expect my credit score to do? When will it start going back up? Should I hold off on trying to reapply for the total rewards card ( I really want this one, and was hoping to have it before my trip to Vegas in early November)? I feel like I'm at the mercy of credit reporting agencies and am not sure what I can do. Any advice would be appreciated.
Well, this is a very short primer on how to build your credit.
1. You really got lucky getting that Discover IT card to start off with. You didn't have any prior history of CC use and they like to see that history in most cases. The Capital One card is a good beginner card. Most people will qualify for a Cap1 card just starting out.
2. Most good quality rewards cards won't touch you until you have 1 year of experience demonstrating good credit behavior with a minimum of two cards no matter how high your scores are. Lenders look at scores AND history when making lending decisions. Don't worry, after the first couple of years you won't have to worry about history anymore as long as you ALWAYS pay on time. One late will REALLY drag your scores down for a long while and that late will stay on your reports for 7 years. (Years!)
Building a good thick credit profile takes planning and patience, it is a marathon and not a sprint, it takes years.
Builing a thick file requires two things: Scores and history.
This is how you do it:
You started out like most people do in getting a card or two. You happen to have a really good card to start with in the Discover card. Your scores will take a hit for the inquiries, new accounts and damage to your AAoA. After your cards both report, your scores will start climbing month after month and after 6 months they should be back to where you started or higher. So now you have your scores back but you also have 6 months of CC history!
It's decision time...
You should now be able to qualify for most cards besides the top tier cards because you don't have the 1 year of CC history yet. What I'm trying to say is that at this point it would be a roll of the dice to be approved for top tier cards. You might get them, you might be declined.
You need to decide if it is worth the risk to apply for the card you want at this point or wait for a full year of CC history.
At the 1 year point you want to apply for 1 or 2 more cards, wait another 6 months to a year and get another 1 or 2 cards. You want to end up with 5 to 8 credit cards you could see using and keeping for the rest of your life. Do not EVER close these cards as they will be very important to having excellent scores in the future. The CCs age will contribute to your AAoA and your AAoA will always stay high as long as you keep these cards open.
Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20
