Some valuable info for people starting over with credit rebuilding

[Amwar73mf]

So-called "experts" will tell you that you can't get a credit score over 800 with credit cards alone, but I did.

I started 5 years ago trying to rebuild my credit with a $250 secured Discover card. I spent less than 30% for 6 months and they sent my deposit back, which I used to get a secured Citi card. Had to wait 18 months to get that money back, but in the meantime, I was building my score. My first 0% interest card was Cap1 rewards card for 15 or 18 months, can't remember. Paid that off. Got a BOA card for the 21 months 0% interest, and they upgraded it after about 6 months to a rewards card. I charged about $1500 on that one and it will be paid off in January when the 0% interest ends.

I have very low income and mostly got these cards in case of emergency, since I have no savings and live on SS. My interest is pretty high still, which is aggravating, but nothing I can do about that.  I currently have $13,900 limit across 4 cards.

I see people having multiple cards, running them up to the limit and paying minimum payments, then complaining when they get limit decreases or get cards closed. I have only used more than 30% of my limit on one card, then only 37%, which I'm paying off now. I always pay more than the minimum payments, unless I've had an emergency and had to spend my cash on something else. I think I've paid the minimum maybe two times in 5 years. I've never had a late payment.

I rotate using my cards for small amounts to keep them all active. By small, I mean sometimes only $10 a month. Like I said, I don't have a lot of income. What I do is figure out how much spendable cash I have for the month and spend a little less than that on one of my reward cards. That's something I just started doing, and it's paid off already. I'd really like higher rewards, but without more income, I'm not going to get one of those cards. I haven't taken advantage of the specials and coupons they give me, because I don't shop much. Once I get my one card paid off, I'll start taking advantage of those for stores I really shop at.

Bottom line is, I've managed to build my credit score on an income of a little over $1,000/month because I use my cards infrequently and responsibly. To me, credit cards are tools. I got in trouble with them once, and I had to learn how to use them to my advantage. There is a lot to learn, and I've learned a lot reading on this forum. I didn't have a clue how to rotate cards until I read it on here and researched it. There are ways to maximize the rewards you can get from your cards, but it has a learning curve. I'm not that good at it yet.

Anyway, my Equifax was 810 last month, dropped down to 794 this month, seems just because I charged $28 on one card. It will probably go back up next month since that is paid off.

Transunion is 811.

If I had the income, I could walk into a bank and get a home or car loan easily, but you don't have to have income to build that score. You just have to do it right.

Hope this helps someone.

[Kforce]

Yes, income has no relationship to score, as long as it is enough to get a couple of cards.

With only cards one can get to over 830 Fico scores.

However getting a loan requires enough income to be able to make payments,

so having cards, and good scores does not mean one can get a loan.

[FicoMike0]

Congratulations, sounds like you're doing the right things. I'm retired and my Income isn't high either, my expenses even less. For me, I find subs more attractive than rewards. A 5% card sounds great, but 5% of $2000 is $100. On the other hand, I got a card sub if $500 on $2000 spend in four months. That's 25%, and Id spend $500 a month anyway.

[CreditPoor]

First off no one credible ever said you couldn't get an 800 score with just cards. It's more difficult but certainly can be done. I've seen people with 800 on just authorized users no actual trade lines of their own.

Secondly you stated that you got your cards for emergencies because you have no savings. This is bad advice because credit cards aren't emergency funds or savings and should never be treated as such. The moment you depend on them they can easily be revoked without notice. Everyone should have an emergency fund no matter income level. You can't argue not being able to save $20 to $50 a paycheck.

And finally your thoughts on using credit cards to the limits is a bad thing and the reason for CLDs and Closures. I have 20+ cards with high limits and income plus some to support maxing and paying off my cards multiple times a month. I've never had a CLD or card closure due to spending in 20+ years, so what you've stated is incorrect 

[Amwar73mf]

Different people have different needs.

I'm not looking for a loan. I'm 72 yrs. old and don't ever want to own a home again. I like renting and having everything done for me.

What I CAN do is rent a place pretty easily with a high score and my good record of past rental payments. Social Security payments cannot be garnished or have liens put on them, so I'm always going to have that money. I've not missed or been late on a rental payment for 10 years, so if I want to move, I won't have any trouble. 

Plus, if I want to buy a house, I can find a seller willing to finance it for me. That's how I bought my last house, but again, I don't want to buy a house or a car. I'll be dead before this car becomes unusable.

If I were in my 30s or 40s, I'd worry about not getting a loan, but then, I'd be working also.

[Amwar73mf]

I see your point, but I don't have $500 a month to spend. I do put my car insurance on it (about $500 every six months), just to get the rewards, then pay it off the next month. If I could get a sub to spend $500 and get some back, I'd surely do that. When I got my Cap One card, I had to spend $1,000 in 2 months to get $200 back. Just so happened, it was right around the time I paid my car insurance, and the card had 0% interest for I think it was 18 months, so charged that and stuff I would have bought anyway, got my $200, then paid those things off over time, since no interest.

[Amwar73mf]

I meant that post for people like me, who are low income and don't know where to start to rebuild credit, not for high-income people like you. Why are you so intent on making me feel bad? I feel sorry for you.

I live on $1,000 a month in SS. I have no money to save. Even if I did, I would NEVER have that many cards. You just seem to be doing passive-aggressive bragging, and I'm not falling for it. I'm very proud of what I've accomplished on poverty level income.

Have fun spending all that money. Are you really happy, though? If you are, why are you being so mean to someone like me? Money doesn't make you any better than me. I've learned that over my 72 years of life dealing with snotty rich people. I just shrug and say "whatever" and let them go around trying to buy happiness. I'm very happy, and I have next to nothing.

You need to do some self-examination.