Credit Score: n/a --> Seeking advice regarding best steps to develop a credit score/credit file

[Anonymous]

First post here...     So, after a long sabbatical from credit (about 10 years) and following the teachings of Dave Ramsey, we are now faced with this dilemna of NO CREDIT.  In fact, a recent check of our credit yielded a totally blank credit report and credit scores of n/a.  Now, we realize that we need to have credit -- in preparation for some upcoming changes in our lives.  While slow and steady sounds good, we'd like to see some big gains in credit score as early as possible (as long as it doesn't hurt the big picture).

I've been reading a lot about ways to build credit, but still have some questions.  Since, we're really starting from scratch, I guess we might as well try to avoid any missteps and try to maximize whatever benefits can be gained by following the smart strategies I read about here.

I am aware that we may not be able to get credit the normal way, because we absolutely have NO credit.  I think this means we will have to go for secured cards and loans.  I learned about those Shared Secure Loans and how they should be paid down to about 8.5%.  Is one SSL good enough, or is there a benefit to getting more than one.  I know I've read that people who already have an installment account on their account would not really benefit from adding a SSL, but does that thought still apply to someone starting from absolutely NO credit?

Now, about secured cards.  Is 3 the ideal number of cards to have?  or would having more be better for our situation?  I know about keeping utilization down to about 9.5% or less.  It looks like utilization refers to the amount of credit being carried from one statement to another, in terms of a percentage of credit limit.  But does this mean that I can charge as much as I want (without going over the limit) as long as I pay it off (or leave a balance of 9.5% or less) every month?   Does charging a lot and possibly getting close to your limit hurt you even though you are paying it off before the due date? 

Then, there's the related topic of AZEO.  Is "all zero except one" the best method of paying credit cards for my situation, or is it better to pay it all off each and every month?  I guess what I'm wondering is if it would be good to have zero balances on everything at the end of every billing cycle.  I don't know if the strategies are different when starting with N/A credit scores.

And of course, before we can start paying on cards, we have to have the cards first.  I'd like to start getting credit cards, but the one big thing I am wondering about, is the effect of having several inquiries on a N/A credit score/report.  I know that it's not good to apply for a lot of credit within a short amount of time, but I'm wondering if in this case, it would be best to get it out of the way and get the inquiries for a few cards and a loan (anything else?) early on and just take whatever hit comes with it.  This way, we won't have to apply for anything else for a while and give our credit a chance to build-up.... So, what consequences might we face if we decide to get multiple cards right away?  Are inquiries even a concern for someone with N/A credit?  I mean, how low can it go if there is no score, lol?..  Okay, I realize that the inquiries will still be on the credit report by the time a credit score appears, but is it worth it?  It feels like a catch 22, because inquiries are not good, but they are needed in order to get the cards/loans, which are needed in order to get a credit file and credit score...  So confusing, lol.

Oh, as a side-step, do secured cards report like normal unsecured card?  Or do they have something that differentiates them -- for instance, do they say "secured" on the credit reports?

These are the most pressing questions I have, because I'd like to go ahead and get started with credit building.  There are many more questions in my head, but I'll ask those in due time.

Thank you in advance.  I appreciate any help and guidance. 

[JVille]

Do you have savings account? Money in the bank? If yes and hopefully the savings is in your local credit union... that is where you start. Get the CU to give each of you a CC with a $1000 LOC. So that’s 2 different accounts. Explain to the CU why you have been doing and why?

Seems the most logical place to start is with the financial institution who has your savings.

[Anonymous]

"It's like you don't exist."

I had been all cash, seldom used debit or prepaid Amex card for years. When my mom passed, i had to have an account for her estate. I'd had an account with her credit union for decades. No problem there. Second bank, they did a credit check. The CSR input my info, her eyes/face showed shock. I said what? She said "it's not bad" "but" "it's like you don't exist" "nothing at all shows." I laughed, but it got me thinking... credit might be something I needed in the future. I didn't even ask about a cc, I had enough to deal with.

I think the inquiry triggered mailers for CapOne & Amex. I ignored them for about a year. March 2017 I responded to CapOne and was approved. I had read Amex wanted a FICO score to approve, so I had six months to build. My first Vantage score was 617... starting from 0, or as you say n/a. I didn't use the cc a lot, but consistently, paid a couple times a month. Always reported 0 at statement cut. Once I charged an item mid-cycle for about 70% of the CL, my score dropped quite a bit. I didn't know what/why but knew not do do it again. I researched, found AZEO and myFICO. Since then, I've never even had 1% utilization, but one card reports as 1%. I got my first FICO score (727) on 9/3/17. I applied for Amex immediately. It was approved and I was addicted to building strong credit. Since then I've gotten Discover, Chase, 2nd Amex. Also an auto loan from Chase in Nov2017. 

You can go a long way in a pretty short time. But, imo, only charge what you can pay for immediately. The hardest thing I've done since starting my credit journey was letting a second card report a balance to test AZEO or AZE2. Happily, I can do AZE2 with no point loss. But, I'm back to AZEO. 

[jamie123]

One really important question that needs answered before any accurate advise can be given: When will you actually need credit?

You state that you will need credit because of upcoming changes in your life. What are those changes and how far into the future are we talking about that you will need credit? What will you need this credit for?