18, starting out and building credit. What do you think of my plan?

[Sunni]

I opened a 1500 "savings" line of credit via SELF Financial, and paid it off within 5 months. In 3 months I opened a secured card through them and rolled over 1200 from the line of credit to the card. This secured card has a $25 yearly fee, but with the high limit this adds to my overall credit, I feel it is justified to pay it.

Once I paid off the line of credit, SELF returned the remainder of the "balance" to me, so about 300.

 

The limit for the secured card is 3000, so I opened another "savings" line of credit for 3000, where I can roll over a further 1800 into the card. This leaves me with 1200 on the line of credit that will be returned to me once I pay it off. I have 2 years to pay this off, but will take about 3 months based on my summer job earnings.

 

I paid 200 to a CapitalOne Quicksilver Secured to build a relationship with the bank (I already have a checking account through them.) This card can be graduated in 7 months or so.

I attempted to sign up for a CapitalOne Platinum Secured while I was applying for the Quicksilver, but I was denied due to applying for 2 cards at the same time. It only took one hard inquiry for both, but I will not make this mistake again.

I am planning to reapply for the Platinum Secured (50-200 balance) in 30 days.

 

My current credit score (FICO-8) is 670. (I only have like 5 months of credit age, 100% payment history, 0% utilization)

I have a few goals for each period of time -

Goal number one: grow credit.

 

#so, status in July 2023#

3000 Self Secured Card, 25 yearly fee. - 4 months age

200 CapitalOne Quicksilver Secured - 1 month age

200 CapitalOne Platinum Secured - 0 months age
1500 Self Loan - paid off

3000 Self Loan - 1800 paid, 1200 remaining.

 

I am also planning to apply for the Discover It Secured (200-2500 limit) by September or so. This will build my relationship with them for the other Discover cards they offer. I want to add 2500 to it to increase my overall limit and give a good baseline for the graduation (where 200 would probably graduate into a low 800-1200.) Although I am unsure of if they'll allow me to add this much. My weekly pay is 20 hourly after taxes, or 480 weekly, or 1920/month. I have no expenses. However, I've only had this job for the summer, and made a lot less until May 2023 (when I was still in high school.) I am now graduated and taking more hours, 24hrs/week.

 

#so, status in September 2023#

3000 Self Secured Card, 25 yearly fee. - 6 months age

200 CapitalOne Quicksilver Secured - 3 months age

200 CapitalOne Platinum Secured - 2 months age

2500 Discover It Secured - 0 months age
1500 Self Loan - paid off

3000 Self Loan - paid off

I will be in community college (for an Associates in Cyber Security) in September, so will start looking at Student cards to apply for. I will start taking 90 day breaks before applying for any unsecured cards.

*my Dad is paying 25k for my community college, and I will be living at home/commuting to school, so student loans will not be an issue. no car loan bc i own a 2009 car already.*

 

Goal number 2: Starting to get unsecured student cards

 

#so, status in December 2023#

3000 Self Secured Card, 25 yearly fee. - 9 months age

200 CapitalOne Quicksilver Secured - 6 months age

200 CapitalOne Platinum Secured - 5 months age

2500 Discover It Secured - 3 months age
1500 Self Loan - paid off

3000 Self Loan - paid off

 

The student cards I plan to slowly get into:

Discover It Student Chrome; 0% APR for 6 months, 2% gas/dining up to 1000 quarterly, 1% cashback everything else, has a cashback match for one year, apparently no FICO requirement? This will be the first card I apply for due to the low risk of rejection - December 2023
CapitalOne Quicksilver Student Cash; 1.5% cashback on all categories, 50 cashback if 100 spent in first 3 months - March 2024
Discover It Student Cash Back; 5% monthly revolving cashback, has a cashback match for 1 year - June 2024

CapitalOne SavorOne Student Cash; 3% cashback dining/entertainment/subscriptions/grocery, 1% everything else, 50 cashback if 100 spent in the first 3 months - September 2024
Chase Freedom Student; This opens a relationship with Chase, 50 cashback upon using in first 3 months, 1% cashback all categories, after 5 years offers 20 cashback bonuses on account anniversary - December 2024

At this point (December 2024) I should be 75% done with my Associates degree. My secured CapitalOne cards and Discover should have gone through their graduation, so this is the point (after about 50/2 years in fees) where I end my Self Secured card (it does not have a graduation option.) This gives me 3k back to stick into a savings account or retirement fund.

 

Goal number 3: Longer account age, starting to get a few 'forever' cards. I will start taking 6 month breaks before applying for cards.

The forever cards I plan to slowly apply for:

Chase Freedom Flex; Connects to the Chase ecosystem, further improves relationship with Chase for better travel cards in the future. 200 cashback if 500 spent in first 3 months, 0% APR for 15 months, 5% cashback in revolving categories, 5% Chase travel, 3% dining, 1% everything else - June 2025
American Express Blue Cash Everyday; Connects to the American Express ecosystem, builds relationship with AmEx for better rewards cards in the future. 0% APR for 15 months, 3% cashback groceries, retail., gas, 1% everything else - December 2025
Citi Custom Cash; Connects to the Citi ecosystem, builds relationship with Citi for better rates in the future. 200 cashback if 1500 spent in first 6 months, 0% APR for 15 months, 5% cashback in revolving categories (based on spending) up to 500 monthly - June 2026

 

Goal number 4: Effective perfection, or, what I'm building my credit for anyways
Wherein I get travel cards and more 'impossible' seeming rewards cards. The American Express Golds and CapitalOne Venture X's of the credit card world. This is just what this entire journey is for.
Also a low interest mortgage but this is a credit card board soo..

[MarvBear]

Welcome to CreditBoards. 

[Sunni]

1 minute ago, MarvBear said:

Welcome to CreditBoards. 

 

thank you! i have been active on various reddit boards about personal finance and stuff, so i feel comfortable here

[shifter]

To start, I must commend you on your journey thus far! You've clearly done some research and made some very good decisions for getting started the right way.

 

As they say, fail to plan, plan to fail, so it's great to see that you have put together a roadmap for the next few years. A few tweaks I would recommend:

• Self loans are not needed or particularly useful for building credit and just cost you money. No need to do any more of those.
• You don't need any more secured cards. You just need to let the ones you have season for 6-12 months before applying for unsecured cards.
• Rather than app for the Disco it secured in September, wait until Dec/Jan and app the Disco it Student you mentioned. That should be a slam dunk at that point.
• The reason for that timeframe is then all your 3 secured cards will be at least 6 months old and your credit will be about 12 months. These are key numbers, so wait until your oldest account actually turns 12 months before proceeding with Phase II.
• At that time, if you first get approved for the Disco it Student, I would consider apping the Chase Freedom Flex. Chase has been known to be good to thin/clean files. Bundling your apps together on the same day or few days is called an "app spree" and is the preferred method of building credit. You put several apps together at the same time and then take the new cards and allow them to season for 6-12 months before proceeding with another batch of apps. Also, if you app both of those and get approved for both, go for the trifecta and also try the Amex card you want.
• If you do this in Dec/Jan and get these cards, after another 12 months, you will pretty much be able to app and get any card you want.

Other thoughts

• You mentioned 0% util - that's actually not a good thing according to FICO. You need one card to have a balance for maximum FICO points. Be sure the month before your unsecured app spree in Dec/Jan that all of your cards have a $0 balance except one card with a $3 balance. That's called the $2 trick ($3 in your case because you may use your Disco) and will give you the maximum FICO points for your profile.
• Do you have an older person in your family with good credit that has a Visa/MC/Disco account that is 10 years old or 20 or 30 or older? The older the better. If they can add you as an authorized user, that can jumpstart your credit building as it can instantly give you a credit history of that number of years. You mentioned your dad giving you 25k for college, perhaps he might have decent credit. He doesn't even have to give you the card, he can keep it in his file cabinet. You just need him to add you to the account so it reports on your credit. He's an ideal person because I assume you have the same last name and you said you live at the same address, which will help ensure that the AU account actually reports on your credit. Also, ideally he would add you to a card he doesn't really use much because his balance will affect your overall util. So ideally it would be $0 every month and not impact you.
• Be careful how much you believe out there in reddit land and the other credit forums. There's lots of misinformation out there. This forum definitely has the most accurate information based on lots of trials and experiments over the years by some older members.

[A Credit Ed]

I am impressed.  My credit plan at 18 was non existent and by the time I was 20 I was already in collections.  Take every word of Shifter's post to heart and I imagine you will be one of those with an 800+ FICO by the time you are 25.

[Sunni]

On 6/11/2023 at 4:05 PM, shifter said:

To start, I must commend you on your journey thus far! You've clearly done some research and made some very good decisions for getting started the right way.

 

thank you!

 

On 6/11/2023 at 4:05 PM, shifter said:

• Self loans are not needed or particularly useful for building credit and just cost you money. No need to do any more of those.

 

sadly, i just took time to look into the terms and calculate the sheer insanity of these things. i am very sorry for myself due to not paying much attention to the rates and overall high fees an account like that would actually cost me. i have now written out a much more comprehensive dossier on the dumbness of that decision, which should be on my profile as soon as it's approved by the moderators. i have made my bed, so shall i lie in it, though i will try my very best to pay off the loan and use it to eek out some benefit (i cannot close it anymore)

 

On 6/11/2023 at 4:05 PM, shifter said:

• You don't need any more secured cards. You just need to let the ones you have season for 6-12 months before applying for unsecured cards.

 

my income situation basically necessitates my maximizing my secured cards. maximizing to the point of adding enough to hit the max each card allows. at some point, i want to have 3k on the Self Secured card, 3k on the CapitalOne Quicksilver Secured (i have like a month to save it up and add to the given limit,) 1k on the CapitalOne Platinum Secured, and 2.5k on a Discover It Secured. achieving like 9.5k worth of limits with a very low/insignificant chance of rejection is something i've focused on saving for. i have no expenses (besides the self loan which is to a point my own money minus a fee) and high (for me) income, but it is very volatile, and has only increased in the summer since i finished school. i would rather make sure i have a steady income before switching over to applying for unsecured options.

 

On 6/11/2023 at 4:05 PM, shifter said:

• Rather than app for the Disco it secured in September, wait until Dec/Jan and app the Disco it Student you mentioned. That should be a slam dunk at that point.
  The reason for that timeframe is then all your 3 secured cards will be at least 6 months old and your credit will be about 12 months. These are key numbers, so wait until your oldest account actually turns 12 months before proceeding with Phase II.

 

as per the last response, i'd rather take it slow. i have a fluctuating income (high pay in summer, low jobs in winter,) and i can add a lot upfront for a guaranteed limit via my secured cards, but in the terms of 12 months i am not really making all that much. i am far more worried about my income being the main factor influencing my credit applications approval chances, so will take all the secured limits i can get in the meantime.

 

On 6/11/2023 at 4:05 PM, shifter said:

• At that time, if you first get approved for the Disco it Student, I would consider apping the Chase Freedom Flex. Chase has been known to be good to thin/clean files. Bundling your apps together on the same day or few days is called an "app spree" and is the preferred method of building credit. You put several apps together at the same time and then take the new cards and allow them to season for 6-12 months before proceeding with another batch of apps. Also, if you app both of those and get approved for both, go for the trifecta and also try the Amex card you want.
  If you do this in Dec/Jan and get these cards, after another 12 months, you will pretty much be able to app and get any card you want.

 

i dont know. i'd rather be completely sure of my approval before even attempting to apply, so i'm leaning towards more conservative application methods

 

On 6/11/2023 at 4:05 PM, shifter said:

Other thoughts

• You mentioned 0% util - that's actually not a good thing according to FICO. You need one card to have a balance for maximum FICO points. Be sure the month before your unsecured app spree in Dec/Jan that all of your cards have a $0 balance except one card with a $3 balance. That's called the $2 trick ($3 in your case because you may use your Disco) and will give you the maximum FICO points for your profile.

 

i didn't know, i'll try it out. i know about the 10% util trick where i show a balance when the FICO refreshes then pay it off before the statement date but havent heard of this $3 tip

 

On 6/11/2023 at 4:05 PM, shifter said:

• Do you have an older person in your family with good credit that has a Visa/MC/Disco account that is 10 years old or 20 or 30 or older? The older the better. If they can add you as an authorized user, that can jumpstart your credit building as it can instantly give you a credit history of that number of years. You mentioned your dad giving you 25k for college, perhaps he might have decent credit. He doesn't even have to give you the card, he can keep it in his file cabinet. You just need him to add you to the account so it reports on your credit. He's an ideal person because I assume you have the same last name and you said you live at the same address, which will help ensure that the AU account actually reports on your credit. Also, ideally he would add you to a card he doesn't really use much because his balance will affect your overall util. So ideally it would be $0 every month and not impact you.

 

i do not, sadly. my parents have money but have no cards. they are Ramsey types and only buy stuff with cash

 

On 6/11/2023 at 4:05 PM, shifter said:

• Be careful how much you believe out there in reddit land and the other credit forums. There's lots of misinformation out there. This forum definitely has the most accurate information based on lots of trials and experiments over the years by some older members.

 

this is true, and ill take care to be more skeptical

 

On 6/12/2023 at 9:27 AM, A Credit Ed said:

Take every word of Shifter's post to heart and I imagine you will be one of those with an 800+ FICO by the time you are 25.

 

i like to think so, but as my newest self post shows, even with all due diligence i still fall for very silly things. i can only hope to learn from the inevitable mistakes

[shifter]

3 hours ago, Sunni said:

i am far more worried about my income being the main factor influencing my credit applications approval chances, so will take all the secured limits i can get in the meantime.

 

You'd be surprised at what you can get approved with little income. I wouldn't overthink it. Let the bank decide that you don't have enough income rather than taking yourself out before you even start.

 

3 hours ago, Sunni said:

i dont know. i'd rather be completely sure of my approval before even attempting to apply, so i'm leaning towards more conservative application methods

 

Same as above. You don't get approved for 100% of the cards you don't apply for. At least if you apply you have a chance. The number one rule of app sprees is keep applying until you get all the cards you wanted or you get declined. Getting declined is a normal part of the building process and it means you're doing it right. I just got declined for 3 cards last week, that I figured I would get declined for, but wanted to take the chance and see. I'll do the same thing again next year and probably get declined again. 

[hdporter]

Suffice it to say that I come at this from a modestly different perspective.  My first reaction is:  Overwrought and Over-complicated.

 

(Take this to heart because I'm the "king of Overw.../Over-c..."  (At least I was at an earlier time in my life, before K.I.S.S. became a mental "daily driver".)

 

I'll strongly chime in with others who tell you "no more secured cards".  2, at most, is all you'll benefit from.  Use them actively, but judiciously.  Keep your balance to no more than 50% of the CL (pay multiple times a month, if necessary, or just make use of cash for payments when loaded up).  Seek out limit increases where feasible.

 

That said, if you would feel better with a 3rd card, app the Citi Secured Card ... it's the best secured card on the market and they're more interested in growing your profile with them than keeping you dependent upon high rates and fee-based transactions.

 

I recommend a 4 mo break between card apps.  This isn't a race; you're going for the highest quality card portfolio possible.  Your scores are already in the mid-600's.  It's only a matter of short time before your profile clears the threshold of prime issuers.  Once you break through into a prime unsecured card, use it nearly exclusively for 6 months to establish the best possible profile up front.  Active use typically begets approval for credit limit increases at regular intervals.