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  1. #1

    Exclamation How can I improve my score and get a CLI

    Here's a little about my credit standing according to Experian and some info about my history

    Let's look at the positive side of things first. My current score is 721, not horrible.

    I have paid all my bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy

    I have a low low balance to limit ratio (about 21 percent), which is good and bad and will get into later.

    I have no public records, I mean i'm only 22

    On the negative side, I have a short length of credit history.Oldest reporting account is 2.7 years with an average reporting age of 2.1 years. I have had 2 credit cards in total. An Ikea store card, whose program was canceled all together but always in good standing. So that leaves me with one open. A Capital One Platinum Master Card. Also always in good standing, though close to it's limit once or twice because it is so low I've only had it for about 6 months and it's my first real credit card. The limit is only 500 which after was increased from 300. which I would love to get increased somehow. Not sure how Cap1 will respond.

    I don't have any mortgages of any kind....yet. Tis the renters life for me. So until I get one, no points added from that.

    I have 2 installment loans totaling around 5k. Both in good standing


    So, what can I do to improve my score? I want to apply for a rewards card with a higher limit in the near future(suggestions on cards? thinking about Chase Freedom) but don't want the inquires until I know for sure I will be approved with a decent limit. I know time is a huge factor and I need to keep doing what I'm doing to improve my score, but is that It?

    thanks in advanced.

  2. #2

    Arrow Re: How can I improve: CLI/Score?

    Brett,

    Congrats on having such great a great credit score (especially at your age), in addition to having a Plat. Cap. One card. (They are pretty stingy these days!) However, the answer to your question - How can I get CLI? is this: patience.

    I know that "patience" is not the answer that you want to hear, but like you said, you're longest LOC is/was barely 2 years, which doesn't give enough time to establish a decisive spending/payment history with any creditor. Personally, I don't recommend having more than one retail credit line (store credit cards, like IKEA) because in addition to pretty steep interest rates, they are not major lenders like Chase, Citi, Bank of America, Discover, etc...

    As far as Chase Freedom: I advise against applying because, even though you currently have a good credit score, you do not have enough credit history, # of credit lines, available credit - on top of a very low credit limit. You're just not ready - with regard to your credit, and unfortunately, credit is not what it was 10 years ago when I was in your shoes. A Negative: when IKEA stopped their program, that hurt your credit worthiness for many reasons. Now you not only have one revolving LOC, you're overall credit line was just cut in half and your longest LOC just cut you off. All of these factors = not good for you.

    The same thing happened to me almost 3 years ago, which happened to be my highest LOC. That meant that all of a sudden, my available credit vs. my used credit ratios just switched places. My avail. credit went from good to bad because the entire amount of my credit line went to $0 - just like your IKEA credit card - but unfortunately, the balance of that card was still there. The result was horrible: within 30 days, my credit score dropped because - since the previous month - my used credit was showing more than 100% of my avail. credit since I had just lost access to my largest LOC, yet I still had a balance on that account. (FYI: that LOC was closed due to injunctions made by the FDIC and FTC.)

    The big name banks give the big LOC's ($2500; $5K, $10K +), but they almost always require credit ratings that are Good (high end) or Excellent, which is more than just a number. Basically, establishing good credit comes at a price when you're starting out (or over), but it is later rewarded with larger LOC's accompanied by 0% APR's and lower interest rates. Unfortunately, if you only have one LOC and it's in the hundreds, you're just going to have to be patient. Instead, apply for a card that recommends a credit rating of FAIR, like Credit One, Orchard Bank, Applied Bank (had both of the last two; they're great except for the annual/monthly fees). Although they have higher interest rates, they increase your credit line often with on-time payments that are more than the minimum. I would do that, wait two years, check all three scores, and then look at reapplying.

    My opinion: Paying a card off every single month is not the best way to establish a great credit profile - but that's just my opinion, which has been rewarded over time. (Luckily, Citi agrees and approved me for a $8,500 World M.C. yesterday.) I also caution you from casually applying for any credit because a score that is 700+ can drop 30-40 points from one inquiry, which lasts 24 months and will not rebound quickly, especially if you are declined...

    Be patient, Brett, because (speaking from personal experience) you will continue to pay the price...

    ((Also, you didn't elaborate much about those installment loans, but those aren't helping your credit - yet... If it's like a sub-prime loan for a computer or something financed through a less-than-reputable bank, those two loans are definitely holding you back - especially considering how large the amounts are, which are not lines of credit... They are worse because they are just debts with high balances that you owe.))

    My advice:
    -DO NOT APPLY FOR A CHASE FREEDOM card.
    -Pay those installment loans off IMMEDIATELY.
    -Stop using your Capital One card altogether until you pay the two installment debts off, and make only the minimal monthly payment on your Cap. One account in the mean time.
    -About two months after paying off those installment loans and (hopefully) at least 4 months of a zero balance on your Cap. One card, then apply for another LOC, but not until then.

    Your score will definitely increase when you have satisfied those two loans, but be cautious and very conservative when it comes to applying for major credit cards.

    Good luck!

    -P.S.

    (Btw, I applied for Chase Freedom the same day (this week) as Citi World MC, and got a "you're account is being reviewed, but we'll mail you a decision within 10 days" response to my application - and I've been banking with Chase for 4+ years. So while Chase is still pending a decision, Citi approved me for a $8,500 LOC. I have a 728 Experian score w/ 10 years of credit history, zero negative accounts, 3 paid off cars, 5 open revolving credit lines and 2 hard inquiries on file. I imagine Chase is going to do the same thing that Capitol One did to me in Feb, which was pull all THREE credit files - INTENTIONALLY looking for a reason to decline me. But although Capital One declined my application, DISCOVER approved me for a $2,500 LOC the very same day. My situation just goes to show that every lender has different lending criteria...)

    *Very last bit of helpful information... Based on my credit past, these banks/creditors pull from Experian for credit applications: Chase, Citi, Bank of America, Credit One, Cap. One, Washington Mutual, Providian, Dell and Ford. /// TU: Nissan, Cap. One /// EQ: USAA, Discover, Cap. One.
    Last edited by PhynanciallySavvy; July 10th, 2011 at 08:27 PM.

  3. #3

    Default Re: How can I improve my score and get a CLI

    Quote Originally Posted by brettbizarre View Post
    Here's a little about my credit standing according to Experian and some info about my history

    Let's look at the positive side of things first. My current score is 721, not horrible.

    I have paid all my bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy

    I have a low low balance to limit ratio (about 21 percent), which is good and bad and will get into later.

    I have no public records, I mean i'm only 22

    On the negative side, I have a short length of credit history.Oldest reporting account is 2.7 years with an average reporting age of 2.1 years. I have had 2 credit cards in total. An Ikea store card, whose program was canceled all together but always in good standing. So that leaves me with one open. A Capital One Platinum Master Card. Also always in good standing, though close to it's limit once or twice because it is so low I've only had it for about 6 months and it's my first real credit card. The limit is only 500 which after was increased from 300. which I would love to get increased somehow. Not sure how Cap1 will respond.

    I don't have any mortgages of any kind....yet. Tis the renters life for me. So until I get one, no points added from that.

    I have 2 installment loans totaling around 5k. Both in good standing


    So, what can I do to improve my score? I want to apply for a rewards card with a higher limit in the near future(suggestions on cards? thinking about Chase Freedom) but don't want the inquires until I know for sure I will be approved with a decent limit. I know time is a huge factor and I need to keep doing what I'm doing to improve my score, but is that It?

    thanks in advanced.
    Hi Brett,

    I would definitely consider a card with your bank. Hopefully you're using a credit union for all the regular banking needs (checking, savings, etc.), this will allow the relationship you have to continue building. Big banks like Chase typically don't care if you already have accounts with them, a credit union (or regional bank) will recognize this and offer you better rates and higher limits. They take things into account like; direct deposit, savings balance, account behavior, and length of accounts. I would consider switching to a credit union if your currently banking somewhere else. Upon that switch, you will be able to use the same credit pull for all the needs (e.g. savings, checking, and credit card). Finance Globe has a database of NCUA approved credit unions here. While shopping around, consider a credit union (CU) that offers shared branching. With shared branching, you'll be able to use all the participating branches around the nation. Currently over 6,600 locations nationwide are participating. See this link for info. And remember, the best part about a credit union is they're not-for-profit!

    Capital One is a great starter, but they never give credit limit increases (CLI). Some card members get a CLI in the beginning as a result to the credit steps program.

    By the way, what kind of installment loans do you have?

    Good luck!
    Last edited by Joeyman; July 11th, 2011 at 01:04 AM.

  4. #4

    Default Re: How can I improve my score and get a CLI

    I wanted to add something... Don't loose hope! I'm 20 years old and have $8,200 available credit. So that proves you can do it!

  5. #5

    Arrow Re: How can I improve my score and get a CLI

    Thank you to everyone for the fantastic advice!

    As far as the loans, they are two separate student loans through Salie Mae.

    Currently I bank with PNC(before them it was National City whom PNC bought). I was thinking about going over to my local branch and talking to someone about trying to open a CC with them just to get a ball park idea of what they could offer.

    One last thing, my experian CR says a negative factor is that I have no major credit cards open. Does the Capital One card not count as MAJOR? I'm confused because the card does show up as being active on the report.

    Oh and one more thing. Since I had a balance with the Ikea card(51 out of a 300 limit) and did not pay it off until after the program was canceled will they still report it as being a zero balance when my CR is updated? How does that work?

    Thanks again!

  6. #6

    Default Re: to Brett's 2nd post...

    Brett,

    Even though IKEA canceled their credit program, they are still obligated to report payments/changes to account status until the consumer pays the account off. The upside of this is that it will show that you continue to make on-time payments (or did, until the balance was $0. This is exactly what happened when my biggest LOC was closed 3 years ago. I still had a $800 balance due, which I paid for the next 7 months after the LOC was cut off. Why rush to pay off a balance that doesn't give you anymore credit...?) If/when it's paid to $0, the account should show as "Closed" and paid satisfactorily.

    Capital One is a major lender, but the card program you may have and/or the amount of your LOC is not major. These are the only reasons I can think of that your report indicates "no major credit cards". Mine said that until I had my first $1,000 credit card limit...

    (Also, an update about my Chase Freedom credit card application: I logged into my checking account today and saw that I have a new account... for a Chase Freedom credit card. So I guess they have a person review every single application these days, instead of allowing a computer profiling system to make an instant decision. However, they were not as gracious with their LOC as Citi - but I'll still take a $3,000 LOC!!)

    Btw, you sound very responsible, but I would never miss or defer a student loan payment. Ever! I haven't done that, personally, but I know someone who has and it was not the best decision they ever made...

    -PS

  7. #7

    Default Re: How can I improve my score and get a CLI

    I would apply at a credit union they are more lienient, lower rates and they usually ask you how much of a limit you want and go from there. Good score for your age congratulations. Being young doesn't mean you can't have good limits. What helped me was a few years ago my mom added me on as an authorized user to her chase card which was opened over 14 years ago. It is back dating on my credit report even though I didnt even have credit 14 years ago so only being 23 I have 14 years of credit. I would suggest you do the same if you're parent(s) have good credit with high limits. Here are a few of my limits and I am only 23:

    These are all my cards in my name only:

    Bank Of America- 9,000 CL
    Chase- 7,000 CL
    GECU (my credit untion) 13,000 CL
    Amex gold- no pre set limit

  8. #8

    Default Re: to Brett's 2nd post...

    Quote Originally Posted by PhynanciallySavvy View Post
    This is exactly what happened when my biggest LOC was closed 3 years ago. I still had a $800 balance due, which I paid for the next 7 months after the LOC was cut off. Why rush to pay off a balance that doesn't give you anymore credit...?) If/when it's paid to $0, the account should show as "Closed" and paid satisfactorily.
    Actually this could reflect bad on your credit report, according to the way I have learned. Not necessarily really bad, but not good. It would be sorta like having a charge card from American Express. When the credit program shuts down they now longer report the limit, therefor your utilization will go up. For example, you said the balance was $800 at some point, well your credit limit was... let's say $3,000. The month before the program shut down your utilization would have been 26%. After the program shuts down the utilization goes to 100% because no credit limit is being reported. This could cause your credit score to drop if you didn't have more room to maintain a low utilization (like other credit cards with low balances). In your case, it probably didn't reflect because it sounds like you had other cards.

    Let me know if you disagree because I would love to learn more on this subject.

  9. #9

    Exclamation Re: How can I improve my score and get a CLI

    UPDATE:::::

    So, here's an update as to what I has happened in the month of July. Mind you I'm still waiting for my July credit report to see what the outcome is.

    I applied for a new CC account at my Bank. Hard inquire was reported and I was denied. Sad day

    On the bright side. Capital one raised my limit from 500 to 1500. Pretty excited about that.

    I'm nervous to see what my score will change to, if at all.


    Brett.

  10. #10

    Default Re: How can I improve my score and get a CLI

    BC, you have a REALLY nice mom. A year ago my mom's score was 809 and it seemed like she was getting new CC's almost every other month. A couple of them are for really excellent credit and have high limits, and I asked multiple times to add me - but never give me a card - solely for the purpose of having a big name bank/CC, as well as a high limit, relecting on my credit report. Unfortunately, the conversations always dwindled or conveniently got interrupted, so nothing came of this.

    However, PATIENCE has paid off. In Jan 2011, Discover gave me a $5K limit - though they cut it in half two months later (jerks). But since then, I've been busy!

    Today: Citi Platinum Select MC ($2,600) - 0% for 21 months. 8.74% after that
    Yesterday: USAA Rewards World MC ($10K)
    July 2011: Citi Gold AAdvantage World MC ($8,500)
    July 2011: Chase Freedom ($3,000)
    Jan 2011: Discover ($5K -- reduced to $1,200) - lame.

    Scores (as of yesterday): EX 748. EQ 748. TU 700. (72% of revolving credit is available.)

    Sharing your awesome credit history - with only those you trust or who will never actually have access to utilize account (only benefit from it) - is the best gift you can give these days! :-)

    I will post an update with my scores after these two hard inquiries take their toll, and then again when when my cedit reports rebound with $12K+ of new credit!

    -PS
    Last edited by PhynanciallySavvy; September 2nd, 2011 at 12:48 PM.

  11. #11

    Default Re: How can I improve my score and get a CLI

    It really is not that difficult to get PRIME credit cards I just turned 18 5 months ago and already have a Bank of America Accelerated Cash AMEX, Discover More, GE Money Wal-Mart Discover, Capital One Platinum, & a CITI Dividend Visa (all of which were approved within the last few months). The reason I was approved for all these credit cards was I am an authorized user on a few of my mothers credit cards so I already have almost 4 years of credit history.

  12. #12

    Default Re: How can I improve my score and get a CLI

    Quote Originally Posted by derek1061 View Post
    It really is not that difficult to get PRIME credit cards I just turned 18 5 months ago and already have a Bank of America Accelerated Cash AMEX, Discover More, GE Money Wal-Mart Discover, Capital One Platinum, & a CITI Dividend Visa (all of which were approved within the last few months). The reason I was approved for all these credit cards was I am an authorized user on a few of my mothers credit cards so I already have almost 4 years of credit history.
    It's hard when you don't have somebody willing to add you on their account, though. Took me two years to get my first prime card it was the American Express Zync, which gave me the in with Amex to get the Blue Cash a few months later. My starting limit was $1,800 and just jumped to $5,000 in July, now 21 years old.

  13. #13

    Default Re: to Derek, et. al

    Derek,

    Joey hit the nail on the head -- that no everyone is so fortunate to be added as an authorized user/cardholder. And not everyone has friends/familiy that still have good credit after the never-ending recession, so good for you that your mom is looking out for your financial well-being. I hope she doesn't let you actually spend on her accounts though... Personally, I wouldn't. I'd be happy to help my nephew out in two years -- when he turns 18, but only if he goes to college. I'd be willing to do this because I'm sure that one of his parents (my sister) might very well have the worst credit score in America, though I'm not sure about his dad/step-mom (they are pretty fiscally responsible, but have limited funds and four teenagers!).

    Something else that is questionable, which I am going to research as soon as I submit this post, is that you just turned 18 and were able to obtain a line of credit - but did you get a line of credit/credit card account SOLELY in your name? I happen to know that the new credit card bill specifically requires a co-signor for anyone under the age of 21. I'm curious if there is any stipulation to this rule, which I never paid much attention to because I'm over 21...

    Brett - who posted the original message - didn't put his question up here for people to gloat in his face. He wanted genuine, trustworthy advice to get to the next level and step up his credit profile. Derek - and Joey, it's really awesome that you two are so involved with your credit health, especially at your young ages. But your situations are COMPLETELY different from Brett's, which is what mine was not long ago. So that's awesome that you two come here gloating about what you have been able to get and what credit limits you do have, but that is ONLY because your parents have nurtured your credit by giving you part of theirs... We aren't all that fortunate. On top of that, he asked for advice and you two haven't given one decent piece of advice -- you're just talking about yourselves! Prime cards are NOT as easy to get approved for as they were five years ago, especially when you have a limited credit history like Brett. He's better off doing what he's doing... as long as that doesn't involve anymore credit applications for awhile -- right, Brett?! :)

    D & J: Don't forget, the bad comes with the good when someone else is on your account and vice versa... If they are late, you will also have a late payment. If your score is over 730 and you have a late payment, that is going to hurt and drop your score many more points than someone who only has a 575-615 credit score with a late payment. And there is almost no leniency to avoid the late payment fee anymore... It's a given, and the default APR may be forthcoming.

    -PS

    << I'm pretty aggravated with Derek's post, so I don't normally come across so direct and perhaps disgruntled, but he had absolutely nothing of value to contribute to this post. If I could delete his comment, I would... Joey, I was surprised that I actually agreed with you about something. :) >>

  14. #14

    Default Re: How can I improve my score and get a CLI

    To answer your question PhynanciallySavvy all of these accounts are in my name only. The reason I was able to get credit in my own name is because I do have income. I'm really sorry if my post was coming across as "gloating" but I'm pretty sure this website was created so we could share our personal experiences and gain knowledge from each other. FYI I was recently taken off of my mothers account per my request. But thanks for your "insightful" comment.

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