| My Credit Score and Requesting New Cards |
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riffdex
Member
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Joined: 01 May 2011
Location: NC
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| My Credit Score and Requesting New Cards |
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Hey y'all. I have a few questions about credit. I am 20 and last year I got my first credit card (in march 2010). I had a lot of trouble getting one and applied for like 4 before I got accepted for one, bc I had no credit history at the time. Then after like 6 months of having that card (I always pay my balance in full btw), I tried applying for a few more cards and I got denied for them all. My main plan was I wanted to build up my credit score so in a few years I have an amazing credit score and can use it to get a good interest rates on mortgage and also thinking about taking out a loan and starting a business. So I wanted to get as many cards (and as high available credit possible) and use them responsibly to build up my score.
Then about 2 weeks ago I just took a shot in the dark and applied for another credit card (fully expecting to get denied) from Discover (discover is one of the one's who denied me a year ago) and somehow they gave me the card (with a pretty big limit of $2000 - the first card only had $1200 limit). I just got my card this week and they sent me a paper that tells me my credit score. It says I have a 750 as a credit score. I have asked some ppl and they say that is pretty good? I have also read website and they have different numbers classified as how good of a score you have. For example:
Bad 350-619
Fair 620-659
Good 660-749
Excellent 750-850
So I was wondering. Does having a 750 score mean I have a very good chance of being accepted for basically any card? Or do they take other factors into account. For example, I am afraid they may see I have a 750 credit score, and then check my age and the time period I have had credit and see that I have only had a card for less than a year. I was hoping to get a few more cards as soon as possible and, as I said before, I will just basically use them and pay them off every month, because I want to build my credit over the next few years. This is one card I was looking at. It says here you need an excellent credit score, but I just don't want to apply unless I'm pretty sure I'll get accepted.
http://www.creditcards.com/credit-cards/chase-freedom-visa-bonus-cash-back-22125665.php
Alternatively, I could just apply for something without rewards like that. One that is a lot easier to get. But I'd like that one if possible bc it gives a $200 reward. I know your credit takes a short-term hit when you apply for a CC and just wondering is it feasible that I could get this one or would it be more realistic to apply for a different one? Either way I would like another one bc it will just increase my available credit and it will look good on my score in a few years of using it responsibly. Also does anyone happen to know how bad it affects your credit score when you apply for a credit card?
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Sat Jan 28, 2012 2:32 am |
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coaster
Senior Advisor
Cash: $ 1357.20
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Joined: 11 Oct 2005
Location: Wisconsin
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All the stuff you ever wanted to know, and a lot of stuff you hope you never need to know, is available from the folks who initially created the first, and still the dominant, credit-scoring model, called the "FICO Score"; their website is here:
www.myfico.com
Now, under their scoring model 750 is pretty darn good, indeed, as the top score using their system is 850 (and like, nobody, gets an 850). However, the credit bureaus are pushing their own version of credit scoring, their main model being called the "Vantage" score, and its scale is different; it goes higher, so a 750 (while still very good) is not as good as with the FICO scale.
The good news: either way, your score already takes into account those other factors you're worried about, so stop worrying already!! You're sitting pretty!! It would be helpful to know if your score is FICO or Vantage; does it say?
As far as wanting another card to increase your available credit, it's the ratio of credit used to credit available that's important, so if you use very little of the credit you already have, and pay it off promptly, you'll be doing just fine.
~Tim~
Eye Candy : Why Whimsy
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Sat Jan 28, 2012 4:48 am |
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riffdex
Member
Cash: $ 3.65
Posts: 18
Joined: 01 May 2011
Location: NC
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quote:
Originally posted by coaster
All the stuff you ever wanted to know, and a lot of stuff you hope you never need to know, is available from the folks who initially created the first, and still the dominant, credit-scoring model, called the "FICO Score"; their website is here:
www.myfico.com
Now, under their scoring model 750 is pretty darn good, indeed, as the top score using their system is 850 (and like, nobody, gets an 850). However, the credit bureaus are pushing their own version of credit scoring, their main model being called the "Vantage" score, and its scale is different; it goes higher, so a 750 (while still very good) is not as good as with the FICO scale.
The good news: either way, your score already takes into account those other factors you're worried about, so stop worrying already!! You're sitting pretty!! It would be helpful to know if your score is FICO or Vantage; does it say?
As far as wanting another card to increase your available credit, it's the ratio of credit used to credit available that's important, so if you use very little of the credit you already have, and pay it off promptly, you'll be doing just fine.
Well the idea was I wanted more credit available to me. I am starting a business and plan to put a lot on the cards (paying off in full every month of course), to get cash back bonuses/etc. From my projections, my credit utilization ratio will be very high and look bad imo. That's why I want to get as much as possible in the mean-time, before I really get the business underway. I also could really use any bonuses that cards offer, for example getting $200 with that card I listed. If there is a good chance of them accepting me, I figured it was worth applying for. Basically, I really want higher credit available to me. I figure I could apply for some easy to obtain card and have a very good chance, or apply for one of the harder to get ones with rewards and then I might be able to get the credit increase AND the rewards offered. I'm just afraid I'll get denied and get a credit hit without even achieving my main goal.
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Sun Jan 29, 2012 2:50 am |
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coaster
Senior Advisor
Cash: $ 1357.20
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Well, that puts a different spin on things. One or two apps aren't going to hurt your score much, and the small hit will wear off fast. You're not going to get denied credit for a couple apps on your record. If you get denied, there's another reason. And keep in mind that if you get denied credit, law requires the agencies to provide you with a free credit report.
Best wishes and good luck.
~Tim~
Eye Candy : Why Whimsy
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Sun Jan 29, 2012 8:00 am |
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riffdex
Member
Cash: $ 3.65
Posts: 18
Joined: 01 May 2011
Location: NC
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Thanks for the help! I just decided to go ahead and apply for the card I was talking about earlier. I figure they may deny me and I get a short-term hit on my credit, but it is worth the risk. Even if I get denied for this card, I think I should have no problem shopping around and finding a card someone will give me. If not, I will just wait a few months and try to apply again. (I have been reading up about it and, the general consensus is that "hard inquiries" effects are basically gone after a few months).
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Sun Jan 29, 2012 1:53 pm |
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eastmn
Senior Member
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Try for a 6% MasterCard from a local credit union or bank. You also have to use the cards periodically so that they aren't canceled.
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Sun Jan 29, 2012 4:08 pm |
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oldguy
Senior Member
Cash: $ 309.10
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Joined: 21 May 2006
Location: arizona
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quote:
I am starting a business and plan to put a lot on the cards (paying off in full every month of course),
What business are you going into? Will this be after you finish college? Or are you going to build some wealth first? (I ask because many people get this wrong, it depends on your own financial goal - ie, do you want a million? Or $10million? Or $100million?) What's your major in school? STEM other?
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Sun Jan 29, 2012 5:30 pm |
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riffdex
Member
Cash: $ 3.65
Posts: 18
Joined: 01 May 2011
Location: NC
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quote:
Originally posted by oldguy
quote:
I am starting a business and plan to put a lot on the cards (paying off in full every month of course),
What business are you going into? Will this be after you finish college? Or are you going to build some wealth first? (I ask because many people get this wrong, it depends on your own financial goal - ie, do you want a million? Or $10million? Or $100million?) What's your major in school? STEM other?
I am trying to get the business underway right now but it might be a few years before I get where I want it to be. (I also plan to wait a few years before I lay too much on the line, as I am hoping for the economy to improve first). To answer your question, I have built up a lot of wealth (imo), though definitely not as much as I'd like to have. I have around $22,000 since I graduated two years ago from HS. I have it invested in a wide range of ways such as stocks, loans (to my mother when she really needed the money - I can trust her to be good for it. She is honest but she is just not good w/ money and got in deep in CC debt [I am now managing her finances and working on a plan to get her out of debt]), etc. I am hoping to accelerate my wealth growth going forward as I just took on a second job in November (I had been working part-time for awhile and looking for more work) and all of the money I make at that job is deposited into an account, half of which goes into my roth ira, and other half of which is funds for my business. (I have made a vow not to touch it until I have $10,000 in the business account - an arbitrary goal perhaps, but just what I decided).
I have not put too much on the line for the business yet, and I'm certainly not ready to do that yet (but I would like to have credit available to me when I am ready). In its current state, my business has barely any overhead, which reduces the risk by a lot. My father and I look for bargains in thrift stores and sell the items on ebay/amazon at market prices (they typically sell somewhere from 10%-20% of market price in the thrift stores. This can be anything from books to CDs to hifi stereo equipment. As you can see, it is a very small-time operation right now, but because we have barely any overhead we have been very profitable with it. I hope to (in the future) get into dropshipping/wholesaling/other forms of arbitrage. I have always been interested in the concept of buying an item when someone offers it at a low price, and selling it when someone is willing to pay top dollar. This is probably why I have always been interested in the stock market.
Anyway, my whole point in this is that I am not quite ready to get the business underway how I'd like it to be, but I like to plan things out and would like to have credit available to me when opportunities arise. I also would like to take advantage of any deals the credit card companies are offering in the meantime. My goal since I have been 12 (and learned about dividends) is to have $1,000,000 and be invested in a diversified portfolio of stocks where I could simply live off of the dividends every year (instead of dipping into the principal). Of course, that is kind of outdated goal. And going forward, it may not be feasible, depending on inflation. I guess my main goal is have enough passive income coming in where I don't have to get up and go to work (but I still will work, and grow my business because I would enjoy it). Admittedly, I may need to spend a little time and decide exactly what my goal is for wealth if I am going to put the plan into action... My major is business admin. and I hope to be a CEO of a fortune 500 company some day (:
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Sun Jan 29, 2012 10:26 pm |
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oldguy
Senior Member
Cash: $ 309.10
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Joined: 21 May 2006
Location: arizona
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You have a well reasoned plan - a miilion (plus an inflation correction), passive income, a business education. You understand these things at age 20, that is an awesome advantage. When Einstein was asked about the most important equation he said "compound interest".
So if you simply invest your $20,000 now at 11%/yr (the market average), it will be $458,000 in 30 yrs and $1,300,000 in 40 yrs. (the advantage of 'time').
Or, you could work at a Fortune 500 company and invest $5000 per yr into an 11%/yr fund, that would be $1,100,000 in 30 yrs and $3,230,000 in 40 yrs.
Or, do both and have $4.5M. The $5000/yr investment is pretty straight forward, not much risk - the probability of a good outcome, while not a mathematical certainty, is high. Yet most people seem to miss this method - instead they go with the idea that the only way to be wealthy is to start a business - ironically, most fail at the business. Odd.
If you accomplish your goal of CEO of a Fortune 500 Corp, your $1,000,000 will be in the bag in about 3 months. And it can happen - some would say that your odds are 500 to 300,000,000 (the US population). But that's not true - there are 10's of millions that do not have the intellectual capability, 10's of millions who do not have the leadership personality, and 10's of millions that do not have the desire or the ambition.
2009 Average CEO Pay at S&P 500 Companies
Salary $1,041,012
Bonus $203,714
Stock Awards $2,630,574
Option Awards $2,284,595
Non-Equity Incentive Plan Compensation $1,790,703
Pension and Deferred Compensation Earnings $1,060,867
All Other Compensation $235,232
Total $9,246,697
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Sun Jan 29, 2012 11:23 pm |
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cohan99
New Member
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Joined: 14 Feb 2012
Location: Arad
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In a free credit score there are three digit numbers generated by a mathematical algorithm based on data in your credit reports. These numbers are showing how responsible you have been in paying off your car loans, mortgages, cards and other lines of credit. Lenders use credit scores to assist them in figuring out the “credit worthiness” of consumers applying for loans, lines of credit, or cards. The applicant’s credit score will most likely be used for figuring out whether or a person qualifies for credit, and if so, what terms and interest rates the person will receive.
edited to remove subject line
Free Credit Score
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Thu Feb 16, 2012 4:36 pm |
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Flipyourdebt.com
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Location: Kansas City
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I think 750 used to be good enough, but the economy/housing situation has made lenders skiddish.
The credit score number that "opens any door" is probably closer to 780 today.
www.flipyourdebt.com
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Wed Feb 22, 2012 12:21 pm |
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asapcc
Contributing Member
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Joined: 23 Feb 2012
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750 is definitely a good credit score...
As 'coaster' mentioned, I wouldn't worry so much about it -- you're 'sitting pretty'. You have several credit cards already and a very good credit score, so there's really no need to keep applying for more. At most, I would probably only consider one more credit card.
Just keep paying on-time with your existing credit cards, and maybe request a credit limit increase in 12 months or so. This way, your available credit limit will increase (which is good for your credit score) but you won't have to worry about managing so many cards...
Just my 2 cents... GOOD LUCK!
Jeremy P
Compare Credit Card Offers
ASAPCreditCard.com on Twitter / Facebook
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Thu Feb 23, 2012 5:45 am |
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