Improving My 620 Score, Tips and Tricks, Self Credit Builder Loan, Two Secured Credit Cards...

[creditimprover]

4 hours ago, hegemony said:

I would let the 3 cards report for a few months and then try prescreened offers (see the sticky thread of prescreen sites)... assuming you are not opted out. Adding an installment account cuts both ways -- yes it is positive for FICO "type of accounts" factors but it will be negative as a new account hitting your AAoA. I don't see as much value added at your stage of adding an installment account just for FICO purposes. Stick with building-out your revolving accounts -- ideally you'll want 5 (but again I'd wait a few months to get these reporting before adding more).

 

 

 

 

Thanks for the feedback, appreciate this advice! 

 

Also to note, once the student loans exit the rehab process they will go current, default will be removed and there will still be a balance - so I will have three revolving open accounts. I plan to pay them off immediately but is there any value of leaving them open and paying the monthly payment? 

[hegemony]

1 hour ago, creditimprover said:

Thanks for the feedback, appreciate this advice! 

 

Also to note, once the student loans exit the rehab process they will go current, default will be removed and there will still be a balance - so I will have three revolving open accounts. I plan to pay them off immediately but is there any value of leaving them open and paying the monthly payment? 

I am a proponent of paying off debt like student loans regardless of the impact on FICO. There is no reason to ever pay interest to improve your FICO and overall credit profile.

[creditimprover]

1 hour ago, hegemony said:

I am a proponent of paying off debt like student loans regardless of the impact on FICO. There is no reason to ever pay interest to improve your FICO and overall credit profile.

Very real! I will move forward and pay those off, as planned.

 

One other point, I'd love some feedback on and clarification. I have been paying off my balance before the statement hits which then reports 0% utilization. Someone mentioned "0% utilization is not ideal, but don’t confuse utilization with carrying a balance.". Should I wait until my statement and then pay off my balance or continue the way I have been going for the most impact? I still keep my balances below 10% so the most utilization it would ever report is 10%.

 

[cashnocredit]

2 hours ago, creditimprover said:

Very real! I will move forward and pay those off, as planned.

 

One other point, I'd love some feedback on and clarification. I have been paying off my balance before the statement hits which then reports 0% utilization. Someone mentioned "0% utilization is not ideal, but don’t confuse utilization with carrying a balance.". Should I wait until my statement and then pay off my balance or continue the way I have been going for the most impact? I still keep my balances below 10% so the most utilization it would ever report is 10%.

 

Scores can and usually do drop when all your credit cards report 0 balance. Probably because the data models see this as not using credit at all and people that don't use credit cards often don't check their balances/statements since they don't use them. For whatever reason, the data shows that people are slightly more at risk if all their cards have 0 balances. Also if all their cards have a non-zero balance even if small. Optimal scores are with one and only one card reporting a small balance.

[creditimprover]

Something interesting happened today and wanted to see if anyone had any experience with this? 

 

As mentioned, I am in the process of rehabilitating my loans. For this to work, you must make 9 out of 10 payments on time and your student loans will be removed from default and put in good standing / have all charge offs removed. Today, my Experian updated all three credit reports and the Equifax report has all three closed / defaulted student loans completely removed - not even in the open account / good standing section of my report. Both Experian and Transunion still have them under my closed accounts.

 

Any thoughts here? Should I expect it to show back up? The payments I have been making as part of the rehab process are being reported and taken from my balances. 

[DPB]

2 hours ago, creditimprover said:

Something interesting happened today and wanted to see if anyone had any experience with this? 

 

As mentioned, I am in the process of rehabilitating my loans. For this to work, you must make 9 out of 10 payments on time and your student loans will be removed from default and put in good standing / have all charge offs removed. Today, my Experian updated all three credit reports and the Equifax report has all three closed / defaulted student loans completely removed - not even in the open account / good standing section of my report. Both Experian and Transunion still have them under my closed accounts.

 

Any thoughts here? Should I expect it to show back up? The payments I have been making as part of the rehab process are being reported and taken from my balances. 

Where are you seeing this change? Since you can get your reports for free every week from annual credit report, I’d recommend doing that and see what the actual reports show. 

[creditimprover]

3 hours ago, DPB said:

Where are you seeing this change? Since you can get your reports for free every week from annual credit report, I’d recommend doing that and see what the actual reports show. 

I'm using Experian which uses the FICO model! They have a three credit bureau option that updates every week, as well. Last week the accounts were still on the Equifax report but not the other reports. I looked at Annual Credit Report and it says online delivery for Equifax is unavailable. 

[DPB]

2 hours ago, creditimprover said:

I'm using Experian which uses the FICO model! They have a three credit bureau option that updates every week, as well. Last week the accounts were still on the Equifax report but not the other reports. I looked at Annual Credit Report and it says online delivery for Equifax is unavailable. 

Will it let you have your EQ file mailed to you? If not you’re going to need to contact EQ to see what’s going on with your file.

Although, if the loan with negative info isn’t reporting at all, you should probably see an increase in your FICO scores for EQ. So maybe it’s worth leaving it alone until you’ve finished rehabbing the loan. 

[creditimprover]

14 hours ago, DPB said:

Will it let you have your EQ file mailed to you? If not you’re going to need to contact EQ to see what’s going on with your file.

Although, if the loan with negative info isn’t reporting at all, you should probably see an increase in your FICO scores for EQ. So maybe it’s worth leaving it alone until you’ve finished rehabbing the loan. 

Yes, they'll let it be mailed to me ! 

 

I just wanted to check to see if I should be alarmed about anything, but like you mentioned I will take the significant score increase and continue rehabilitating my loans in the meantime. Once, that is all done and I pay my balance if the loans don't pop up as paid and good standing, I'll check in with Equifax. 

[DPB]

6 hours ago, creditimprover said:

Yes, they'll let it be mailed to me ! 

 

I just wanted to check to see if I should be alarmed about anything, but like you mentioned I will take the significant score increase and continue rehabilitating my loans in the meantime. Once, that is all done and I pay my balance if the loans don't pop up as paid and good standing, I'll check in with Equifax. 

Ave you checked your EQ Fico scores since the loans dropped off? Those were your only negative marks, right? If that report is now clean and your looking to open any new accounts, freeze TU and EX. Then apply using creditors that are known to pull EQ. That should help jumpstart your rebuild. 

[hegemony]

1 hour ago, DPB said:

Ave you checked your EQ Fico scores since the loans dropped off? Those were your only negative marks, right? If that report is now clean and your looking to open any new accounts, freeze TU and EX. Then apply using creditors that are known to pull EQ. That should help jumpstart your rebuild. 

while I don't disagree I just want to note that this can backfire if, after an approval, the creditor does an AR (which it will have PP for) on TU, EX, or IDS and sees the derog. Nevertheless, @creditimprovershould probably do as you suggest.

[creditimprover]

On 9/19/2020 at 1:18 PM, DPB said:

Ave you checked your EQ Fico scores since the loans dropped off? Those were your only negative marks, right? If that report is now clean and your looking to open any new accounts, freeze TU and EX. Then apply using creditors that are known to pull EQ. That should help jumpstart your rebuild. 

Any suggestions on creditors that use this? My score is only 645 still so not sure if it's even high enough? 

[DPB]

2 hours ago, creditimprover said:

Any suggestions on creditors that use this? My score is only 645 still so not sure if it's even high enough? 

It’s going to be somewhat location based. Some creditors will pull different files depending on where you’re located. The credit pulls database is a good place to find that info. Citi always pulls EQ for me. So perhaps a double cash card if you’re interested in cashback. 

And just to make sure, you got your paper report from EQ and it’s free of all derogatory items? I’d have expected your Fico score to be higher than a 645 with a clean file. 

 

(Also, please ignore all the typos in my previous response. Apparently I need to proofread before hitting submit. Ugh, that’s annoying me now.)

[creditimprover]

20 hours ago, DPB said:

It’s going to be somewhat location based. Some creditors will pull different files depending on where you’re located. The credit pulls database is a good place to find that info. Citi always pulls EQ for me. So perhaps a double cash card if you’re interested in cashback. 

And just to make sure, you got your paper report from EQ and it’s free of all derogatory items? I’d have expected your Fico score to be higher than a 645 with a clean file. 

 

(Also, please ignore all the typos in my previous response. Apparently I need to proofread before hitting submit. Ugh, that’s annoying me now.)

There is one student loan remaining that was closed in 2016 and had 13 missed payments from 2010 to 2016. The balance is 0 but that's it, so I'm afraid it still might be affecting me.

 

I definitely want to look into a citi card but they apparently don't do pre-approval's anymore and I'm nervous I'm not quite there to be approved yet. 

[creditimprover]

hi everyone! wanted to give a quick update 5 months later. i was able to fully rehab my student loans, keep my balances low on my secured cards and make sure my credit report stayed in good standing. with the loans moving to open and good status and falling off the closed account section, im proud to say my credit is now sitting at 755 on FICO! i just wanted to thank you all for your advice and help throughout the start of my credit journey. 

 

i wanted to also ask if you have any recommendations on a non-secured to apply for with my score !!

[DPB]

15 hours ago, creditimprover said:

hi everyone! wanted to give a quick update 5 months later. i was able to fully rehab my student loans, keep my balances low on my secured cards and make sure my credit report stayed in good standing. with the loans moving to open and good status and falling off the closed account section, im proud to say my credit is now sitting at 755 on FICO! i just wanted to thank you all for your advice and help throughout the start of my credit journey. 

 

Congrats!
 

15 hours ago, creditimprover said:

i wanted to also ask if you have any recommendations on a non-secured to apply for with my score !!

With a FICO of 755 and no negatives, you shouldn’t have a problem qualifying for most cards available. You should choose a card with a cashback/rewards program that fits your spending profile. What do you value most? Cash back, airline miles, hotel points, transferable points (MR, UR, etc.)? 

[cv91915]

16 hours ago, creditimprover said:

hi everyone! wanted to give a quick update 5 months later. i was able to fully rehab my student loans, keep my balances low on my secured cards and make sure my credit report stayed in good standing. with the loans moving to open and good status and falling off the closed account section, im proud to say my credit is now sitting at 755 on FICO! i just wanted to thank you all for your advice and help throughout the start of my credit journey. 

 

i wanted to also ask if you have any recommendations on a non-secured to apply for with my score !!

 

What a great update.  Nice job!!

 

  

 

Your credit is now prime.  Please be very selective with the cards you choose, because you no longer need to settle for anything less than prime.  You earned this.

 

To help steer you to the right rewards card(s), it would help to know a couple of things:

 

1) Do you prefer the simplicity of one card for everything (taking 2% back on every purchase, for example) or are you willing to switch between cards to maximize value (6% back on groceries, 5% on Amazon, etc.)?

 

2) Which categories of purchases are your largest (groceries, travel, dining, etc.)?  If you are currently paying cash or using a subprime debit card for some purchases, be sure to consider the spending you could switch over to rewards credit cards.

 

3) Are you looking for cash back or miles/points in specific travel loyalty programs (like Delta Airlines or Hilton Hotels)?  

 

Also, if you ever have to carry a balance, rewards cards are NOT the way to do it.  The APRs generally range from profane to insane, but that's irrelevant if you use these cards properly (pay the statement balance in full every month). 

 

Get a separate low-APR card from a kredit younyun if you occasionally revolve balances, although please note that I am not advocating revolving credit card balances.   

[creditimprover]

9 hours ago, cv91915 said:

 

What a great update.  Nice job!!

 

  

 

Your credit is now prime.  Please be very selective with the cards you choose, because you no longer need to settle for anything less than prime.  You earned this.

 

To help steer you to the right rewards card(s), it would help to know a couple of things:

 

1) Do you prefer the simplicity of one card for everything (taking 2% back on every purchase, for example) or are you willing to switch between cards to maximize value (6% back on groceries, 5% on Amazon, etc.)?

 

2) Which categories of purchases are your largest (groceries, travel, dining, etc.)?  If you are currently paying cash or using a subprime debit card for some purchases, be sure to consider the spending you could switch over to rewards credit cards.

 

3) Are you looking for cash back or miles/points in specific travel loyalty programs (like Delta Airlines or Hilton Hotels)?  

 

Also, if you ever have to carry a balance, rewards cards are NOT the way to do it.  The APRs generally range from profane to insane, but that's irrelevant if you use these cards properly (pay the statement balance in full every month). 

 

Get a separate low-APR card from a kredit younyun if you occasionally revolve balances, although please note that I am not advocating revolving credit card balances.   

 

thank you so much! i'm so thrilled and can't wait to continue my credit journey! answering a few questions below:

 

1. i'm okay to bounce between cards to get different values! what would you recommend in terms of timeline of applying for my first prime credit credit card and then my second one? 

 

2. i would say restaurants / dining are my biggest spend - probably 6/7 nights of the week - but in a non-pandemic world travel travel is very big on my list. traveling once or twice a month for work and pleasure. i will be spending a little more time cooking at home over the next couple of months, too

 

3. i was looking into the delta skymiles amex cards because i'm a big delta flyer, but it seems like you get fairly the same amount of perks with the amex platinum card - access to lounges, 1:1 points to miles, etc. i was also told by a friend that the delta miles are not as easy to rack up as they make it seem - plus for my big delta purchases, which makes up a large chunk of my travel, my company pays for the cost and uses my skymiles number. they don't allow for reimbursement. 

 

i was speaking with a few friends and pivoting between amex gold or platinum vs. chase sapphire preferred or reserve. i'd love to know anyones thoughts on these as my first "adult card" so to say. they all have really great introductory offers right now in terms of sign up bonuses / perks within the first few months. the gold amex card seems more ideal in terms of value of points on things im spending - ie, 4x points dining and groceries, 3x points a lot of other places. where as the platinum is solely 5x travel but has a lot of other benefits. outside of that, i know little about the chase cards other than they also come with a great range of perks.

 

i do plan on paying balances in full each month still ! any and all help is so appreciated ! maybe i'm completely off base and the cards i'm considering are not the best ones on the market right now for my needs. 

 

thanks all ! 

[cv91915]

I've done three running threads in recent years that chronicle the value I've gotten from the Amex Platinum, and the most recent one started as a Sapphire Reserve thread and then morphed into a comparison between Reserve and Platinum:

 

My main advice on these "premium" cards is NOT to consider clawing your own money back a benefit (by that I mean, what is the value of a $200 travel credit when you've paid a $550 AF)? 

 

I would argue that it's less than $200, because if I didn't have the card I could have used the $200 for anything, any time, and not just travel and not just THIS card membership year.   

 

Same thing with Uber credits -- only those are actually even worse because they have to be used in a specific MONTH.  This is my biggest pet peeve with the two best-known higher-AF cards.  Make sure the actual card benefits are worth it, and if so, only then commit to fronting the AF money and then clawing much of it back with all of the restrictions.

 

I just posted this in another thread regarding hotel and travel cards.  There may be some value in there for you also:

 

 

I'm an optimizer when it comes to putting as many purchases as possible on the card that pays the most back based on the type of purchase.

 

I started this thread when I realized just how many cards I was using, which started as an amusement but ended up being a pretty decent inventory of which cards I use for which purchases.  Some of the posts are more useful than others.

 

 

As you can see, this is an enormous topic and it can get overwhelming pretty quickly.  I didn't wake up one day with 30 credit cards, ~15 of which see monthly activity for one reason or another.

 

Best advice I have to get started is to find the best general-purpose spending card (don't settle for less than 2% back on everything, with no AF) and then prioritize the cards you get from that point based on the categories where you spend the most money, and then pick up one at a time.

 

The only reason (and it's a BIG one) to deviate from adding cards in this priority order is when there's a compelling sign-up bonus, where putting $3,000-$5,000 on a particular new card in the first 90 days gets you an upfront bonus worth ~$400-$1,000.  You rarely get returns like that.

 

 

Edited April 9, 2021 by cv91915

[creditimprover]

10 hours ago, cv91915 said:

I've done three running threads in recent years that chronicle the value I've gotten from the Amex Platinum, and the most recent one started as a Sapphire Reserve thread and then morphed into a comparison between Reserve and Platinum:

 

My main advice on these "premium" cards is NOT to consider clawing your own money back a benefit (by that I mean, what is the value of a $200 travel credit when you've paid a $550 AF)? 

 

I would argue that it's less than $200, because if I didn't have the card I could have used the $200 for anything, any time, and not just travel and not just THIS card membership year.   

 

Same thing with Uber credits -- only those are actually even worse because they have to be used in a specific MONTH.  This is my biggest pet peeve with the two best-known higher-AF cards.  Make sure the actual card benefits are worth it, and if so, only then commit to fronting the AF money and then clawing much of it back with all of the restrictions.

 

I just posted this in another thread regarding hotel and travel cards.  There may be some value in there for you also:

 

 

I'm an optimizer when it comes to putting as many purchases as possible on the card that pays the most back based on the type of purchase.

 

I started this thread when I realized just how many cards I was using, which started as an amusement but ended up being a pretty decent inventory of which cards I use for which purchases.  Some of the posts are more useful than others.

 

 

As you can see, this is an enormous topic and it can get overwhelming pretty quickly.  I didn't wake up one day with 30 credit cards, ~15 of which see monthly activity for one reason or another.

 

Best advice I have to get started is to find the best general-purpose spending card (don't settle for less than 2% back on everything, with no AF) and then prioritize the cards you get from that point based on the categories where you spend the most money, and then pick up one at a time.

 

The only reason (and it's a BIG one) to deviate from adding cards in this priority order is when there's a compelling sign-up bonus, where putting $3,000-$5,000 on a particular new card in the first 90 days gets you an upfront bonus worth ~$400-$1,000.  You rarely get returns like that.

 

 

 

phew, definitely very overwhelming and a lot to consider. 

 

it seems like the amex gold is going to give me the most benefit based on my current spending habits and i can brand out from there. while, i love the lounge / travel benefits of the platinum, i typically have access to the delta lounges because of my purchase / hate arriving to the airport early so the benefit may not be worth the high yearly fee. 

 

how often do you recommend applying for new cards / building out your credit file? 

 

also, any suggestions on closing my secured cards as i begin to open new cards? one for one? 

[cv91915]

3 hours ago, creditimprover said:

how often do you recommend applying for new cards / building out your credit file? 

 

 

The pace isn't tremendously important with prime credit.  

 

The best advice I can give you is to leave behind the impression that you have obstacles in front of you now. 

 

Too often people get so accustomed to having few options, they don't aim high enough when they (re)join the prime world.  

 

Two caveats:

 

- If your AAoA (which includes closed accounts) is low, each new account is going to have a more pronounced (but still temporary) effect on your scores;

 

- If you have your eyes on any of the Chase cards, with some minor caveats, they won't approve you for a new card if you've opened 5 or more in the previous 24 months.

 

3 hours ago, creditimprover said:

also, any suggestions on closing my secured cards as i begin to open new cards? one for one? 

 

Having five open revolvers is optimal for your scores.  More than that has no impact, fewer is worse.

 

Do any of your secured cards graduate?  How old is your oldest open card, and is it one of your secureds?

[creditimprover]

7 hours ago, cv91915 said:

The best advice I can give you is to leave behind the impression that you have obstacles in front of you now. 

 

this is great advice and something i will work to incorporate into my mindset moving forward. it's all very exciting! 

 

7 hours ago, cv91915 said:

- If your AAoA (which includes closed accounts) is low, each new account is going to have a more pronounced (but still temporary) effect on your scores;

my average age of accounts is 5 years and 8 months because of the student loans which were opened 10 years and 8 months ago.

 

7 hours ago, cv91915 said:

Do any of your secured cards graduate?  How old is your oldest open card, and is it one of your secureds?

my credit card history is actually quite new, as i started accounts when i started my process of improving my credit last summer. my oldest account is from july 2020 and it's a secured open sky card, the second card is my capital one platinum secured in september 2020. capital one allegedly graduates but they're apparently very tricky to get them to approve this decision - especially under a year. 

 

i just applied and was approved for the amex gold - so i landed on that decision. based on the above, i think applying for another card in a few months that's more specific to travel or cash back might be a good next step. would waiting to close one of the secured cards until my next card after the amex make more sense? or should i apply for another one and leave all cards open, since it's technically feasible for me, based on your comment about 5 revolving cards or higher open. and does a few months for my next card make sense or could it even be sooner?

[cv91915]

15 hours ago, creditimprover said:

would waiting to close one of the secured cards until my next card after the amex make more sense? or should i apply for another one and leave all cards open, since it's technically feasible for me, based on your comment about 5 revolving cards or higher open. and does a few months for my next card make sense or could it even be sooner?

 

I'd ramp up to five unsecured cards over a relatively short period of time (but NOT at the risk of quality -- get cards you'll actually use and KEEP).  

 

I'd close the Open Sky card as soon as you have six total cards (that would leave you with five), and even if the Capital One card unsecures, the likelihood it will add value to your prime credit life is vritually nil.  I'd close that next when it becomes your sixth.

 

The secured card accounts will continue to add to your AAoA until they drop off in ~10 years.

[creditimprover]

8 hours ago, cv91915 said:

 

I'd ramp up to five unsecured cards over a relatively short period of time (but NOT at the risk of quality -- get cards you'll actually use and KEEP).  

 

I'd close the Open Sky card as soon as you have six total cards (that would leave you with five), and even if the Capital One card unsecures, the likelihood it will add value to your prime credit life is vritually nil.  I'd close that next when it becomes your sixth.

 

The secured card accounts will continue to add to your AAoA until they drop off in ~10 years.

super helpful! i guess i'll continue researching those cards lol 

 

thank you for all your help!