Advice so I can plan a 1/3 & 5yr financial plan?

[omgitsMatt]

I wanted to make real progress before I came to this forum to ask for help. I wanted to prove I was serious. Show that your help and advice wouldn't be wasted on me, that it'd be taken seriously and even used. I've made real progress on paying off some debt now, so here I am finally asking for any advice anyone is kind enough to give me. I can't put into words how grateful I am for all the awesome information in this forum and I'd be even more grateful for any specific advice you could give me aimed at my personal profile.

I also spent a lot of time trying to shorten this thread. No one wants to read a novel and if I can't get readers I certainly won't get responders.

I've only been working on building credit for three months. If it sounds like what you'd like to suggest or inform me about is common knowledge or common sense, don't hold back, simple advice is very much needed too. I may know one complicated thing about credit with my studying lately but be clueless about something so simple and common that everyone would or should know. That's even likely.

What I'm asking for today, in two sentences, is what should I work towards after I accomplish my current goal which should be done in three months? I have a game plan mapped out for that long, three months . I have a few ideas, some I think are even good, but I was hoping to hear what you more experienced folks have to say.

I'll try to break down my short history concisely as possible while keeping it informative at the same time.

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In September of 2018 I had two accounts in collections and nothing else on my credit. My very first event recorded on my actual myFICO account is when I got my first of two accounts in collections removed.

Starting from the top,

-9/11/18-
I got one account in collections removed, leaving me with just one more on my credit. Nothing else but the one single collection on my credit now.

-10/1/18-
Acquired a Capital One Platinum card at $300, giving me a credit card at $300 and still just one account in collections.

-10/3/18-
Got onto my wife's maxed out Capital One Platinum card as an authorized user with it's $3500 almost used up, utilization at exactly 99%. So that new account as an authorized user, my own Platinum card at a small sum of $300 & that final account in collections were the only things on my credit.

-11/24/18-
Won my final dispute, got the only account in collections off my credit. A maxed out credit card of $3500 (authorized user) and a $300 dollar credit card were now the only things on my credit.

-12/1/18-
Paid off enough debt to get utilization to 85%.

-12/17/18-
Took on another maxed out credit card as an authorized user, this one a Capital One Journey card at 99% utilization with a total balance of $1,500. I now had two authorized user cards with my wife and then my own $300 card.

-12/26/18-
Took my utilization down to 87%, waited for it to reflect and update on my credit report.

-1/4/19-
Took my utilization down to 64%, still waiting for it to reflect and update on my credit report. I'll continue to make staggered payments. I should, at my current pace, have it paid off in 12 weeks.

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Now my scores... which are average. In relation to where I started, 520, I find them incredible especially considering that 11 weeks ago they really were around 520

Equifax - 667
TransUnion - 677
Experian - 689

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Here are the numbers on my current credit card debt broken down into as few numbers as possible,

Current balances:
$000.00 / $300.00 Capital One Platinium (Primary user)
$$999.99 / $1500.00 Capital One Journey (Authorized user)
$2399.99 / $3500.00 Capital One Platinium (Authorized user)

Balance when combined:
$3399.98 / $5300.00

[omgitsMatt]

That's about it, that's my full credit history, as small as it was.

I had a theory that if I got on my wife's $3,500 Capital One Platinum card as an authorized user and paid it down it would reflect better on my credit versus waiting until I paid down the debt, then finally getting on it when it was in good standing utilization wise. I did the same with her $1,500 card that was maxed out.

I tried but couldn't find anything online about my strategy of getting on maxed out cards and paying them down and whether that gave the most benefit to growing our scores versus getting on them at a reasonable utilization percentage like 30% or less.

I just trusted my instinct after reading as much as I could find about building credit with no or little credit history, I felt I was making the decision that was best for my situation. I feel like it was a good way to do what it was I was trying to accomplish.

I'm happy with the way it's turning out, but I don't really know where to go from here.

[Anonymous]

Can you tell us how old each AU card is?  Specifically I mean the Date Opened as it reads on your report.  I am not asking when the original card was opened -- what matters is how it reads on your report.

Having the AU cards on your report may be a good choice if they are appearing as if they are very old.  Otherwise they are likely doing more harm than good.

Do you and your wife have a plan to get all CC debt paid off?  Having maxxed out cards hurts your score and hurts your wallet.  (Edit: I just saw where you indicated a 12-week plan.  Good for you.)

[omgitsMatt]

My report, my real Fico one that is, reflects the original open date when my wife opened them. Not when I because an authorized user in the last two months, but giving me credit for when she opened them originally. However, that may not be as helpful to me as I'd like.

I'm gettting credit for her on time payments dating back to when the cards were opened. Unfortunately that wasn't all that long ago.

06/2017 for the $3,500 AU card
04/2018 for the $1,500 AU card
10/2018 for the $300 card that is mine, not an AU card.

What are your thoughts on those dates? I do know that anything less than two years is not reflected well on a credit report, it has an impact of supposedly 15%

Is available credit, when those cards are paid down that is, more important than age of the accounts?

Unrelated and I hate to mention it in a post where you asked a specific question, I don't want to detract from what you're teaching me about age of accounts, but she also has a maxed out $7,500 card that is last on the list. But that is a complicated one, I'll leave that alone for now discussion wise as I'm not an authorized user YET. I will be though eventually, whenever I'm ready to tackle that! However, just as a thought to perhaps consider, it's over five years old. 5yr and 4 months I think off the top of my head. When that debt is paid down in 12 weeks that I'm currently working I'll then focus on the $7,500

If fact, I just opened two savings accounts with two seperate credit unions today. So when those cards I'm currently working on are settled, I can possibly look into a personal loan or transfer card to finish the job on the $7,500

[Anonymous]

Here are my thoughts.

If it were the case that it might take you a long time to pay off the AU cards, then you'd need to seriously consider whether being removed as an AU might be the better move, given their high utilization.

But this is not the case.  You have a very workable plan to get those two AU accounts paid to zero within 12 weeks.  So I would say leave yourself as an AU.  When they are finally paid off, you will (possibly) get a slight benefit from them and certainly will not be harmed by them.

As far as the 5.33 year old card on which you are not an AU, do not seek to add yourself as an AU (yet).  Leave that decision for when that card is completely paid off.

In the meantime you should work on paying off the AU cards completely while keeping the card that is in your name at a utilization of 1-8% (that card and its limit considered by itself).

Do you have any loans?

[omgitsMatt]

I have been very seriously, obsessively even, thinking about a loan. Specifically to take a large chunk out of that $7,500 we're talking about. So no loans at the moment, but I did go to two credit unions today and open a savings account for that exact possibility in a few months. In fact, that's actually why I was motivated to make this the day I took the time to type out my credit profile and ask for advice.

I was considering taking out a loan. But not until my credit is paid down entirely. So my DTI ratio would be as low as it could possibly get. I can't figure out how to calculate my DTI, thats a huge reason I chose today to come ask for help!!

-Can I not count all my wife's personal obligations like car loan, other credit debt, school debt and ofc that 7,500 card?

-Do I count utilities?

-How about rent? There's two people here, we both work. Do I divide it by 2 or claim the entire amount for my DTI? The lease is in here name, do I still claim it though or can I not even claim that! In fact the only things in my name are those authorized credit cards, what does that mean for calculation me personal DTI?

-Because I would apply for that loan strictly for myself, without having her on that account.

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I have a 4k tax return coming my way. I was going to use that for paying off a giant's share of the 7.5k card, but I'm trying to figure out the best way to do that and benefit myself and my credit at the same time and was wondering if I should consider the use of a loan instead?

I was thinking of applying for a personal loan when I accomplish my 12 week goals. Then from there I would pay down that credit card with whatever I could get loan wise, I'd ask for 7,500 max when I'd apply after achieving immediate goals. I'd try and do a loan spread out over two years, maybe three. But I have no idea how to really figure out DTI and am not sure if my individual income is enough to get a loan of that size.

And I have a LOT to learn about personal loans, I definitely need to study up on that hard.

I thought with my thin credit history, this would be a good way to improve both our credit. She'd have another card paid down, the personal loan wouldn't even be on her credit either, it'd be on mine only. All her credit would see is a 7.5k card paid off. That would be astronomical for her. I'd have a personal loan to establish another line of credit for my almost empty credit history but also I'd get on that card we just paid down to nothing as an AU the moment it is paid down.

With a lot of things taken into account if things work out the way I'd like, that'd free up $500 in payments (I'm taking into account a raise my wife got a few weeks ago too). I could then use that $500 instead to just make payments on a loan that worked for me.

And if I can't get personal loan? I'll consider taking my tax return and getting a secured loan instead. Or not bothering and just putting the return on the 7.5k card and just not bother, get that card down as much as I could.

[omgitsMatt]

I'm here because I am on the clock and time is running out. I don't even have the luxury of knowing when that clock will strike midnight.

At this particular moment, I do okay with income. I make enough. It's the unlimited, open and completely unchecked over time that makes my progress possible. I can work 16 hours a day, 7 days a week. I could work 8.5, 11.75, or just 8. I have a union job but they need the labor badly. So it's the OT that I'm about to lose very soon that is going to put a halt to my progress. I won't back slide, but I'll no longer make significant progress.

I studied for and took a test to get an apprenticeship in a pipefitters union. I got it. I got on a waiting list. I'm #4. I could get called tomorrow, I'd have to quit my well paying job and take a 3 dollar pay cut for the 1st year.

It took 6 months to go from #9 to #4 on that waiting list. So it could take three months, six months or two weeks... But they will call and say I'm #1, show up to work tomorrow and I can't possibly guess when that'd be.

But when it happens, and it will happen, my pay cut will be incredible because of that loss of over time. All progress will come to a halt.

I'm scared they'll call tomorrow and not in April like I hope. If it happens, it's not the end of the world. But I'm scared and I'd be crushed no matter whether it was a big deal or not.

I can do this in 12 months.

So long story ended, I appreciate every minute you're taking to help me make informed decisions. What you're doing may not seem like much for you, but it's incredible for me. So thank you, I am so grateful for it

[Anonymous]

Sounds like you have it together. I think the one that needs credit help here is DW.  If I were me (and I am) that has been burned financially by several past DWs and DGFs (maybe I am a chump?) I would not volunteer to be AU on those cards and not be paying them off myself.  I know community property states have rules and stuff though.  Were her debts acquired after you got married or did she come bearing "gifts." No need to answer if you don't want.

I would get a couple more cards on my own to get to the magic 3 number without the AUs.  You should have no problem with your current scores.

[omgitsMatt]

You're right, I don't have to answer that and shouldn't.

I swiped those cards too. I chose to spend that credit too. I put on that debt just as much as they did knowing that it'd just get higher and higher and that it'd have to be tackled someday. I had reasons, don't we all? On paper it's her debt, morally it's ours.

Your experiences aren't a joke, they're life and it happens and I won't mitigate that and I appreciate you taking the time to share them.

But they're not my experiences today and my wife is not that person.

[omgitsMatt]

A couple more cards of my own to get to the magic 3 number?

So three is the sweet spot of about 3 credit cards then when building a profile that looks appealing to lenders?

I wonder if it's important whether those three are AU's or not? I imagine that is possibly true when we're talking mortgages, auto loans or personal loans huh?

I don't know this for certain, but stuff like that is probably looked at with a human eye to a degree and they'd know whether those were AU's or not and that wouldn't reflect poorly on me but it wouldn't reflect on me as well as having my own individual cards you think? I think credit card approval odds are more an algorithm than most things, so are mortgages/auto loans/personal loans, but not entirely like I'd think a credit card approval would be?

I was wondering if I should look into dropping the worst, youngest, AU cards one at a time and replacing them with cards that are my own?