The Master "How I Got Into the 800 Club" Thread

[KDS]

PSECU EX FICO's are now up for June and for the first time ever, my FICO score is in the 800+ range.

 

Per BobWang's request, I'm starting "The Master "How I Got In the 800 Club" Thread. Instead of a simple "success story" post, I thought I'd outline just what it was that led me to get to the 800 club, particularly as it relates to others starting with very little or no credit. Others can feel free to add their own stories.

 

My Story

 

Back in early 2010, I was a recent college grad and decided it was time to start building credit. I didn't know anything about credit, but I wanted to establish some accounts.

 

I didn't even know what was in my credit report at the time, but I went ahead and applied for a credit card at my local credit union. i was denied for not having enough of a credit history and for having a score that was too low (somewhere in the 650 range). I was discouraged, but took it upon myself to find out what was keeping my score down and what I could do to fix it. In the course of my research, I found CreditBoards. I learned all about building credit, the difference between FAKO and FICO scores, and how to go about improving my score.

 

At the time, the only thing on my credit report was a few small student loans and an AU account on my parents credit card that was close to being maxed out. It turns out that the utilization on the AU account was seriously affecting my score.

 

Sometime around March of 2010, I removed myself as an AU from that card and then I opened up a $600 secured CC with my local CU.

 

My FICO score was now in the 730 range and it climbed to the 750 range over the next several months. In August of 2009, I had my first big success when I got approved for a PenFed Visa with a 14.5K credit limit. My work improving my credit was starting to pay off.

 

Over the next several months, I was approved for a PSECU 20k combo and I jumpeed on board the USA Fed bandwagon to gain access to NFCU. I got approved for a Navy Cash Rewards card with a 15k limit.

 

All these new accounts dropped my FICO score to about 720. It slowly climbed back upward, never getting about 740 or 750. In March of 2011, I got approved for a $20k credit card with SDFCU and I was able to graduate my $600 secured CC with my local CU to a $15k unsecured CC.

 

Nothing else of note really happened for the next year and a half. I got approved for a mortgage in Fall 2011, but decided not to buy a house. I also got a couple CLIs with Navy and I got denied for a PenFed Amex, which I really had wanted.

 

I went into gardening mode and didn't apply for anything for over a year as my score slowly increased into the 770-780 range. In December of 2012 I was finally approved for the PenFed Amex. This was the last card that I really had held out for.

 

I haven't applied for anyhting since December as I've continued to garden. Today my score finally went over 800-

 

 

 

More Importantly, Here's What I Learned Throughout the Process

1. It is a marathon, not a sprint. There is no instant gratification when it comes to building credit. Even the most simple things you can do like getting a secured card take weeks to see improvements in your score.
2. Self control is key. Do not apply for cards just because you can have them now. Wait, and you'll reap much bigger rewards. See this thread.
3. Secured cards are a good alternative to other easy to get cards. I'd recommend not starting with sub-prime cards or store cards. The pickier lenders might not want to issue you credit if you have accounts with these types of lenders. A simple secured CC is all you need. Again, see this thread.
4. Authorized user accounts CAN hurt you if they have high utilization or negative information.
5. Credit can be an end in and of it self, but it isn't the be all end all. I learned a lot about personal finance and saving throughout this process. At first I just wanted to have a really high score, so I made sure to keep my utilization down and pay off all my accounts before the statement cuts. As my income improved, I took this "maximizer" personality trait and focused it on saving and investing instead of credit.
6. I have never paid a single cent in credit card interest or fees, and you don't have to either. Be smart with your credit. Those who understand compounding interest collect it. Those who don't understand compounding interest pay it.
7. I've also never B*d anything. I opted for long term gardening.
8. Rewards programs are good if you can control yourself. I've earned rewards in the low 4 figures over the past several years.
9. Some prime lenders like very thin files. Many people say to "work up" to PenFed. They were my first unsecured card and they gave me a $14,500 limit that gave me a big leg-up in establishing credit.

 

So, What's Next?

 

As of now, I don't really have an immediate need for credit. I'm waiting for some 75k or 100k miles bonuses to come out to take more advantage of my good credit. We'll see if that ever happens again. I'm also considering opening up a 2% cash back Fidelity Amex.

 

I've considered buying a house. I could easily get approved for a top tier prime rate. The market where I live is hot right now, but there is a good chance that my career will necessitate a move in the next couple years, so I'm holding back for now and saving.

 

I could also get approved for a great deal on a car loan, but I don't want to go into debt for a depreciating asset. I'm happy driving my paid for car and seeing my net worth grow every month, despite the $50k pre-approval offer I recenetly got from PenFed.

 

I wish you all the best in your journeys! I'd like to thank all the regular CB posters and staff who have helped me along the way.

 

Feel free to ask questions if you'd like.

 

[hrguy]

 

Secured cards are a good alternative to other easy to get cards. I'd recommend not starting with sub-prime cards or store cards. The pickier lenders might not want to issue you credit if you have accounts with these types of lenders. A simple secured CC is all you need. Again, see this thread.

 

Congrats

[mendelssohn]

What is your AAOA? Great info, and thanks for sharing.

[creditmmax]

Excellent Job! I appreciate all the details given in your post! TIme to pop the bottle & pass it around!

[Rebuilding2010]

1. Got rid if my baddies

2. Became an AU on a card that was opened before I was born

3. Added my own cards and got them dated back to that

4. Kept my applications to a few key cards that I knew would be beneficial in the long run (1 toy card mistake turned blessing in disguise, Walmart)

5. Learned the max fico game and let some cards report periodically.

6. Gardened and kept inquiries at a minimum, asking for cli's rarely but effectively.

 

What got me to 800 was probably mainly 2 and 3 but the others helped a lot.

[BobWang]

Being old.

[KDS]

What is your AAOA? Great info, and thanks for sharing.

 

 

AAOA is 4 years.

[mariuszh]

 

What is your AAOA? Great info, and thanks for sharing.

 

 

AAOA is 4 years.

 

Only 4 years? That's very encouraging.

[kayvebear]

Big congratulations. I'm stuck in the 780s. I will post my story here in 2014 I believe.

[clutchcargo]

Being old.

 

You're not that old!

 

 

 

 

 

Congrats KDS!

[Guest]

Excellent Job! I appreciate all the details given in your post! TIme to pop the bottle & pass it around!

+1

 

 

"WHATATHREAD!!!"

[Guest]

...Post of the year nominee? (This thread)

[GR8WhiTE]

This is a motivational thread.

 

Big congrats to you KDS!

 

I like how your saving and investing, smart man. Congrats again.

[Android01]

Being old.

Ditto!

[TrevorHere]

Nice job, congrats!

 

Thanks for sharing your experience,

[KDS]

 

 

What is your AAOA? Great info, and thanks for sharing.

 

 

AAOA is 4 years.

 

Only 4 years? That's very encouraging.

 

Yes indeed! In my experience at least, if you don't have any negatives, you can reach an 800+ FICO score with a 4 year AAOA.

 

Thanks everyone for the congrats!

[pjmaxwellian]

I'm still dreaming about joining the 700 club, but this is much appreciated info.

Congratulations KDS, and thanks for sharing and starting this thread.

[Chupacabras]

One thought: there is something to be said for loading up with as many of the big lenders as you can, as early as possible. Short term it will absolutely hurt your scores and AAOA, but in the long run your account age will be far less brittle when adding new accounts.

 

Edit: This is doubly true if you don't have access to an AU account.

Edited June 12, 2013 by Chupacabras

[KDS]

One thought: there is something to be said for loading up with as many of the big lenders as you can, as early as possible. Short term it will absolutely hurt your scores and AAOA, but in the long run your account age will be far less brittle when adding new accounts.

 

Edit: This is doubly true if you don't have access to an AU account.

 

That's a very good point to make. You just may have to realize that if you open too many accounts too soon you may have to wait several years for you AAOA to increase to levels that will get you a high score.

[SCORPIO07]

Congrats!!

[lukegotswag]

COngrats to the OP... story is definitely an inspiration in itself!!

[JPerry115]

What do you mean by gardening mode?

[Rebuilding2010]

To not apply for more cards and just work on maintaining and growing your current credit lines

[JPerry115]

Got it! I see sticking with credit unions really paid off, but my questions is with no other credit besides the $600 secured card and student loans, how were you able to obtain such a high limit first unsecured card with PenFed who I hear is difficult to get an approval from?

[JPerry115]

All I can say is that is amazing success and I will follow it!