So... I need to get a good credit history going

[SparkyJJO]

The bolded is 100% FALSE. The only company that would have record of the card's use is the card company. The bureaus have no idea. When it comes to credit bureaus, there is ZERO difference between someone who never uses their card and someone who pays in full before the reporting time. Zero. On the credit report is looks exactly the same-zero usage. So yes, carrying a small amount of utilization (between 1-9%) will not only show you to be more credit worthy, but its been proven you will have a higher FICO than having zero utilization.

You may have a nice FICO, but you apparently have no idea how it works.

1) Tell me then how my reports had various information regarding my account usages? They most certainly did know I was using the card. Not specific numbers, but each one had "warnings" on them that I had charged over x% of the total available credit on the account regularly (it was a low limit card then, it has since been increased but my habits haven't really changed, so no more warnings like that).

2) Again, I am NOT saying you pay off the charges on the account before the billing cycle is over. I'm saying pay the billing cycle's balance on the statement when you get the bill in the mail. One payment per month, paying off the previous month's charges.

Geez this isn't that hard

 

[OCGuy]

This is false. Historical payment data is available.

Historical payment data is not factored in to creditworthiness, nor do I ever see reports that list anything other than derogatory dates.

Sorry, Fannie/Freddie/FHA/VA/Jumbo/FICO/BEACON neither look at nor care about how many times per month you pay on a card.

@Sparky - Yes then, it appears it was a miscommunication, I agree with your post.

What I was trying to point out that you aren't automatically credit worthy for large purchases just because you have 2 credit cards with $500 limits that have been open for 4 years but have never reported a balance. Statistically you are more risky than someone with a lower FICO, maybe a rough patch in their history, but has proven they can pay back large loans.

I rarely see anyone with good scores but lack of credit depth, but it does come up, especially with immigrants and young people.

 

[Aaviel]

Sure - It's not factored into your FICO score, but that doesn't really matter. Being classified as a transactor(Paying in full) is far better than a revolver(partial payments) and underwriters have access to the data and can(see: should) use it. PIF is a fantastic risk splitter.



In fact, here is the TransUnion study:
http://newsroom.transunion.com/pres...ard-payment-patterns-can-1038580#.UsIbEfRDuKs

 

[DrPizza]

If I borrow over the course of the month, and pay it off entirely the next month when the bill arrives, and repeat that process over and over, then that should prove I very well am trustworthy to pay my debts. Actually, it does, given how good my credit score is.

There certainly is record of the card being used. You don't have to carry a balance for that. Not sure where you got the idea that they cannot see that you use a card if you don't carry the balance. They have record of every single transaction you make.

So, no, you absolutely do not have to carry a balance and pay interest on your purchases to have a good credit score. They WANT you to carry a balance and pay interest as that benefits them, but there is no reason to from the cardholder's standpoint. Carrying a balance and paying interest just raises your costs. Why would you want to pay more than the asking price for everything?

Actually, afaik, it depends on which day the credit is reported to the major credit bureaus. I didn't think the credit bureaus monitored every one of your purchases with a card, but rather, once per month, look at your balance vs. credit limit.

Thus, afaik, it's possible to hurt your credit even if you pay off your entire balance each month. That is, if you have a $5k credit limit and charge $4900 during the month - but pay off the entire thing 3 days early each month, if the day they check it's the day before you pay, it appears that you're utilizing 98% of your available credit: not good. If they pull it the day after you pay it off, it looks like you don't use your credit at all.

 

[OCGuy]

Only on AT can you say "This is what I do for a living, and do it well", yet people armed with Wikipedia and other off-topic links will still try to convince you they know better. Haha.

 

[Aaviel]

Only on AT do people claim to "Do this for a living" and think they know what they are talking about.

As an analyst:
1. I don't look at single accounts
2. I don't look at actual credit reports
3. I do look at millions of accounts
4. I do look at the hundreds of variables that are used to assess credit worthiness that are stored in our data warehouse.




You're likely a front line agent dealing with customers.

 

[esquared]

Sorry, this is false. Having open credit that does not report a high balance (different than limit and current balance), why would you be more credit worthy for a house than someone who from time to time carries balances?

Not only does it factor into the score, but from a practical standpoint, how have you proven to me as an underwriter that you have the ability to pay back money that you borrowed, since I cannot see that you do actually use the card between reporting periods?

Edit: In reality this is taken care of when you get a car or some other installment loan that shows you have the willingness to repay debts, I was being very specific as far as correcting your statement

That's not really correct unless I am misunderstanding what you wrote.

1) That may be true if pulling that credit report exactly when he hit the day where the CC was paid and the balance actually reflected zero, and you stop using the card for awhile. (I hope I am making myself clear). I have multiple cards I use every month, and I pay them all off every month. I never carry balances from any month to the next. Yet, when I check my credit reports I have never seen zero balance on any of those cards on the reports.

I am constantly using the cards and even when I pay off the balance due, there is always a balance accruing from the purchases I am making that will be in the next month's bill.

I pay zero interest on CCs.

2) Plus, a credit report will show that a card has been used by its indication of largest balance. Even if the card hasn't been used for months.

 

[OCGuy]

As an analyst:
1. I don't look at single accounts
2. I don't look at actual credit reports
3. I do look at millions of accounts
4. I do look at the hundreds of variables that are used to assess credit worthiness that are stored in our data warehouse.

You just admitted you have no idea what you are talking about.

Unless you can tell us how analyzing the performance data of a pool after the security is already on the books has anything to do with consumer credit....haha.

This is actually quite funny.

 

[OCGuy]

That's not really correct unless I am misunderstanding what you wrote.

1) That may be true if pulling that credit report exactly when he hit the day where the CC was paid and the balance actually reflected zero, and you stop using the card for awhile. (I hope I am making myself clear). I have multiple cards I use every month, and I pay them all off every month. I never carry balances from any month to the next. Yet, when I check my credit reports I have never seen zero balance on any of those cards on the reports.

I am constantly using the cards and even when I pay off the balance due, there is always a balance accruing from the purchases I am making that will be in the next month's bill.

I pay zero interest on CCs.

2) Plus, a credit report will show that a card has been used by its indication of largest balance. Even if the card hasn't been used for months.

When a credit report is pulled, it doesn't pull that day's balance. The creditor reports to the bureau once per month (some creditors are terrible and report it less frequently), and whatever your balance was that day, that is what will show up.

Some creditors report the balance you had at the end of the previous billing cycle, so if you ALWAYS paid it off, as was suggested originally, and had no other debt, you wouldn't be a strong borrower for a home loan.

Once you have a balance a couple times and it reports that, it is not going to hurt you to keep them at "Zero". Like you said, the High Balance will be persistent. I was responding quite literally to the suggestion of "never show a balance it is bad", so I guess that was my fault.

 

[esquared]

What I do involves determining creditworthiness. Believe me, if Bank of America reports to Transunion/Equifax/Experian that you have a zero balance at the end of every month, then nobody else has any idea what you do between cycles.

I'm not advocating paying interest or carrying a balance intentionally. In the real world people carry debt, so they don't have to actually try. Rich people carry even more debt.

In the world of ATOT, I know nobody has to stoop to that level.

Sure they do. The only way you would have a zero balance is if you paid the card off and stopped using it for awhile.

Using the card every month and paying the balance off every month does not reflect zero balance. There are ongoing transactions that are being applied to the next billing cycle.

 

[Aaviel]

You just admitted you have no idea what you are talking about.

Unless you can tell us how analyzing the performance data of a pool after the security is already on the books has anything to do with consumer credit....haha.

This is actually quite funny.

Person A gets credit card with issuer xyz
Transunion collects data about xyz including payment history (pif, partial, etc.)
issuer abc buys data from TU
issuer abc uses some of the hundreds of variables supplied by TU to create credit policy
Person A applies at issuer abc
issuer abc approves and assigns terms based on TU data

Are you really that dense? I thought you were good at your job...

 

[OCGuy]

Person A gets credit card with issuer xyz
Transunion collects data about xyz including payment history (pif, partial, etc.)
issuer abc buys data from TU
issuer abc uses some of the hundreds of variables supplied by TU to create credit policy
Person A applies at issuer abc
issuer abc approves and assigns terms based on TU data

Are you really that dense? I thought you were good at your job...

I don't work with issuer "ABC", sorry. If you read my posts, it correlates directly to what I am actually experienced with, which makes up the vast majority of my industry's product that is originated in this country.

What is an analyst worth these days, anyway? Just for my knowledge.

 

[Red Squirrel]

Credit card is a good start. Should be able to build enough credit so you can buy a house once you graduate, that will further improve your credit. Of course you have to pay off your debts in time.

I got my own credit card as soon as I was able to. Think it was at like 18? Or maybe it's 16, I forget. Was great as I was able to put my domain names and hosting on it instead of bumming my mom's card all the time. :biggrin:

 

[esquared]

When a credit report is pulled, it doesn't pull that day's balance. The creditor reports to the bureau once per month (some creditors are terrible and report it less frequently), and whatever your balance was that day, that is what will show up.

Some creditors report the balance you had at the end of the previous billing cycle, so if you ALWAYS paid it off, as was suggested originally, and had no other debt, you wouldn't be a strong borrower for a home loan.

Once you have a balance a couple times and it reports that, it is not going to hurt you to keep them at "Zero". Like you said, the High Balance will be persistent. I was responding quite literally to the suggestion of "never show a balance it is bad", so I guess that was my fault.

I just said that I have never seen zero balance on any of my credit reports for my CCs. There always have reflected a balance. And even if what you suggested was true (end of the month reports), as I said, being paid off every month doesn't mean zero.

For instance, my banks (CCs) are going to report to the credit agencies that I show a balance every month because of the way they are used. I pay what is due in full, but I am constantly using the cards after that billing cycle date that's says you bill is $xxx due on such and such a date.

Say I charge 1000 one month. Billing cycle ends on the 25th of each month and the due date is the 20th of the next month. Well, after the 25th starts a new cycle and by the time I am ready to send in that 1K payment, I've charged up another 700. I now owe 1700 but my pay in full for this month's bill is 1000. So when my payment in full payment of 1K is paid/recoreded, say on the 10th, I still have 700 outstanding. I never have seen a zero balance on any active card I was using in a credit report.

 

[OCGuy]

I just said that I have never seen zero balance on any of my credit reports for my CCs. There always have reflected a balance. And even if what you suggested was true (end of the month reports), as I said, being paid off every month doesn't mean zero.

For instance, my banks (CCs) are going to report to the credit agencies that I show a balance every month because of the way they are used. I pay what is due in full, but I am constantly using the cards after that billing cycle date that's says you bill is $xxx due on such and such a date.

Say I charge 1000 one month. Billing cycle ends on the 25th of each month and the due date is the 20th of the next month. Well, after the 25th starts a new cycle and by the time I an ready to send in that 1K payment, I've charged up another 700. I now owe 1700 but my pay in full is 1000, so when my payment in full payment is done, say on the 10th, I still have 700 outstanding. I never have seen a zero balance on any active card I was using in a credit report.

Because you are always carrying a balance but paying off everything within the grace period, or your creditor reports on a day that does not coincide with the end of your billing cycle.

You are probably a little further along as far as borrowing maturity if you can manage to do to the first part, so the reporting date not being the end of the cycle is much more common for most people.

I was responding as if someone was to zero-out their card completely right before the reporting time.

 

[esquared]

Because you are always carrying a balance but paying off everything within the grace period, or your creditor reports on a day that does not coincide with the end of your billing cycle.

You are probably a little further along as far as borrowing maturity if you can manage to do to the first part, so the reporting date not being the end of the cycle is much more common for most people.

I was responding as if someone was to zero-out their card completely right before the reporting time.

That scenario actually would require a little effort. Let's say their due date was the 15th or the 20th (really, it could be any of the days of the month). They would have to pay whatever balance in full, and not use that card between, in this example, the 15th/20th and the end of the month. That's the only way I see getting to zero balance. But again the credit report will still show the card being used by showing a maximum balance over the life of that card.

 

[Aaviel]

I don't work with issuer "ABC", sorry. If you read my posts, it correlates directly to what I am actually experienced with, which makes up the vast majority of my industry's product that is originated in this country.

What is an analyst worth these days, anyway? Just for my knowledge.

Not sure what you are cryptically trying to say without saying.


Non-managing analysts are anywhere from 50-120ish (maybe higher?)
Managing analysts are 100+

Coming out of college you could make 100 in 2 years working 40-50 hour weeks and make managing analyst in 2-3 years (uncommon).

 

[cuafpr]

I'm using one to help get used to a major income reduction and rebuild my score and so far its working great. Its a visa secured one and it does help.

As for other credit cards ones from Major banks help as long as they show some use, store cards tend to hurt, at least that is what i was trained when i did some time in car sales.

 

[tortillasoup]

TridenT, any secured card should work, just make sure the fees aren't a lot or even existent. I found when I started my credit that even just 3 months after getting a secured card, I was able to apply successfully for unsecured credit which is worth more.


I don't know how much money you have but keep in mind that the more money you put in a deposit for the secured card, the larger your credit limit will be, giving you a big boost in your credit profile. Had I known or thought about this, I would have put the maximum of $10K down as that would have been a better starting point than $500 like I did. Not to mention at the time interest rates on the secured card were 5% when everybody else was <1%.

 

[Aaviel]

Go to all of the major credit issuers (Discover, Amex, Capone, Chase, etc.) and put in your info to see if there are any pre-quals. That would be an easy way to get a fairly good chance at getting a card. Citi is also fairly liberal with handing out student cards IIRC

 

[blackangst1]

This is false. Historical payment data is available.

Not on a credit report its not. For example I use Amex for just about everything and make 4-5 payments/mo. All my credit report shows is the balance at statement date. THATS IT. It doesnt show utilization in between payments, nor does it show how many or how much in payments were made. The ONLY thing a credit report shows is the balance at statement cut off date. THATS IT.

@Sparky - Yes then, it appears it was a miscommunication, I agree with your post.

Me too

Only on AT do people claim to "Do this for a living" and think they know what they are talking about.

As an analyst:
1. I don't look at single accounts
2. I don't look at actual credit reports

Then you have absolutely nothing to add to the thread, since FICO's and credit reports are what we're talking about.

That scenario actually would require a little effort. Let's say their due date was the 15th or the 20th (really, it could be any of the days of the month). They would have to pay whatever balance in full, and not use that card between, in this example, the 15th/20th and the end of the month. That's the only way I see getting to zero balance. But again the credit report will still show the card being used by showing a maximum balance over the life of that card.

Well, sort of. Due dates as reflected on your statement are irrelevant for reporting purposes. You would nee to find out when your statement or cut off date is, which is typically a couple of weeks before your due date, and before the statement is cut. So if your statement date is the 23rd, and you PIF on the 22nd and resume charging on the 24th, your credit report will show a zero balance regardless of activity. If you always did this, it would appear on your credit report that you arent using your card.

 

[Ferzerp]

That scenario actually would require a little effort. Let's say their due date was the 15th or the 20th (really, it could be any of the days of the month). They would have to pay whatever balance in full, and not use that card between, in this example, the 15th/20th and the end of the month. That's the only way I see getting to zero balance. But again the credit report will still show the card being used by showing a maximum balance over the life of that card.

Exactly. All my expenses go on a card, and the way it works it the following.

January: I charge $3,000 in expenses
February: I get billed for that $3,000
February: I charge another $2,000 in expenses, total is now $5000
End of February: I pay the last bill of $3,000, leaving $2,000 for the next statement.
March: I get billed for that $2,000
March: I charge another $2,500, total is now $4,500
End of March: I pay the $2,000, owed is now $2,500


There is literally never a day where the balance is $0 because it is nearly a month between when the statements are generated and when payment is expected. If you just use the card and pay off the billed balance every time, you won't be showing a $0 balance every month. As an "expert" you should really know this. Example dates on one of my cards is that the bill is due on the 9th, and then 3 days later they generate a new bill giving you 28ish days that you would have to not charge a single thing in order to ever to have a $0 balance show.

 

[Metron]

OP, let me share a quick method to establishing a credit history that I stumbled upon in college...

Join a gym.

I joined a small local gym when I was just out of high school, and after a few months I was getting credit card offers.

Apparently most gym "memberships" are reported to the credit bureaus. Go check out Lifetime or 24 hour fitness, and ask them.

Good luck

 

[CLite]

Because you are always carrying a balance but paying off everything within the grace period, or your creditor reports on a day that does not coincide with the end of your billing cycle.

You are probably a little further along as far as borrowing maturity if you can manage to do to the first part, so the reporting date not being the end of the cycle is much more common for most people.

I was responding as if someone was to zero-out their card completely right before the reporting time.

I carry massive utilization on my credit card when looking at my reports but I pay it off completely (I use it extensively for work and it pings 80% utilization fairly consistently). I have never carried over a balance, sometimes even paying mid-month if I near the limit.

I actually once got a negative note because of the high utilization despite never once carrying a single cent over the statement end period.

I honestly think you are working with outdated information or something, somehow my credit card company is reporting a quasi-averaged utilization despite me paying it off completely. This is a chase - visa card.

 

[OCGuy]

@CLITE - Then it appears Chase reports your balance on a date other then the end of your cycle when it is $0, which with large banks who have multiple products with multiple cycle end dates is common.

When viewing a credit report, the major bureaus will give risk codes as to what may have hurt the credit score. Again I am not saying your 800 score will turn to 700 because of this, but it is absolutely a factor > 0%. The highest score I have ever seen with the standard 850 cap even had risk codes, but here are a couple:


#17 - No recent non-mortgage balance information

#24 - No recent revolving balances

#29 - No recent bankcard balances

http://www.creditinfocenter.com/creditreports/credit-report-codes.shtml

Not sure what you are cryptically trying to say without saying.


Non-managing analysts are anywhere from 50-120ish (maybe higher?)
Managing analysts are 100+

Coming out of college you could make 100 in 2 years working 40-50 hour weeks and make managing analyst in 2-3 years (uncommon).

Thanks, was genuinely interested, nothing cryptic!