Help with building credit.

Okay folks, I need help building my credit. I'm 23, and have never had a loan. I have one credit card that I've had for over a year now, and I've never been late on a payment. I recently asked for a $5,000 loan from my credit union, and was denied. And this is what was stated.

MY credit score: 751 Key Factors that adversely affected my credit score: Length of time accounts have been established, too few accounts, too many inquiries in the last 12 months, and lack of recent loan information. I don't even know what that last one is.

My question. How do I become able to get a $5000 loan? How do I become able to get a mortgage? Do I just keep getting more credit cards, or do I ask my credit union for a secured loan (pointless to me)

 

You may find that you can get close to your loan request limit or more with a credit card and may have a more competitive interest rate on the card, especially for the first 12-18 months. For people who are responsible with their money, and it sounds like you are, there's no harm in having a couple credit cards.

Sounds like the credit union you deal with is pretty picky.

There's quite a few web sites that list the top 10 or 20 credit cards with links to apply. Also, you may have seen commercials for Credit Karma. I use that site and while it is free and does not require credit card info, you will get bombarded with credit card offers on the site.

I get the impression that a lot of credit card companies simply look at your credit score and base their decision on that, which works in your favor. Your credit score is good.

I have tons of open accounts on my credit report and as long as the balances, if you have any, aren't high I don't think it is detrimental to your score. My score is 718 and my biggest hit is likely number if inquiries as well.

Disclaimer - I am not a credit counselor and the info above is simply my experience.

Good luck!

 

I would try another bank. When I was out of college I had 1 credit card the whole time and never missed a payment, never paid a bill late, never bounced a check. I had 20% down and I tried to get a new car loan from my bank (of America), and they denied me and said I had to have a co-signer cause I had no credit history. I ended up getting it financed through the dealership with no problems.
You might want to contact your local power & water companies or landlord and ask them to provide a "Letter of good credit". It is just a letter head note stating you are a good customer and have never missed a payment. I used these to waive deposits when I moved back home after college. I am sure a bank would take these into consideration.

I am not a credit counselor...just my too cents trying to help out a young man that seems to be on the right track when so many aren't!

Good Luck.

 

I agree that should you try another bank as well. I'm really surprised you got denied in the first place.

 

try a different bank, I'm 20 have 2 credit cards and a credit score around 770. I work for the govt (secure job) and was putting 20% down on a house and still got denied for a loan from my credit union under the terms of my job isnt secure, i could get hurt at work and not pay bills, and short credit history (my neighbor told me she peobably didnt even run it by her manager)

went to a different lender got the same interest rate and now im in a house

I also had a car loan i took out for 1000 and just let sit in my savings and set up automatic payments

 

Consider yourself somewhat lucky.

I am 22 and have paid for EVERYTHING I have in cash. My house, my cars, all paid in cash. I recently applied for a $500 credit card and was denied. I am thinking that my plan to take out a home equity loan and build a big garage will be put on hold because no one will loan me anything.

Bummer.

 

Try to get the credit limit raised on your credit card. It will make you credit card usage % drop and it will show the credit card company trust you with more money. Every time Ive got my credit limit raised its always bumped my score up from 4 to 15 points

 

I have 6 credit cards is it bad ? I only use use 1 credit card my score 750

 

Thanks for the advice guys. One specific question though. Say I have a $700 limit on my card. Is it bad to max it out for a 6 month promotional offer even if I pay it off within the 6 months?

 

How so??

If you paid cash for your home, and I assume it's paid in full, you'll have absolutley NO problem securing a home equity loan.

Did you really get denied a HE/HELOC loan?

 

im more amazed that there are 20 year olds in this thread who claim to own a house

makes me feel like a bum

 

It's not a bad thing to have many credit cards as long as theres no debt on them. However, to build credit faster I would recommend buying small things on each credit card and paying them off each month, just forthw additional credit history.

The reason its not a bad thing to have all those cards is that part of your history is based partially on how much credit you have available to you. Having 6 cards with say, $15,000 total usable credit is always better than 1 card woth $5,000.

Hope that helps.

 

Short answer: yes.

Long answer: credit scores are partially based off what precentage of credit that you use out of what you have available. If you have a $700 limit and you max it out then your percentage of use is 100% (bad for your score). The recommended usage of all your credit at any time is 30%.

Cheers and good luck!

 

27 here... Yep feeling that hobo vibe.

 

shot yourself in the foot.

 

751 is a pretty decent credit score for someone with little history..

Before I bought my Taco I got a secure (you pay upfront for how much) credit card for $500. (so you're basically using your own cash) and used that for 6 months for all purchases. Never spend more than 50% of limit (on any card) and always pay it off a few days before date. in 6 months my credit jumped nearly 90 points.

Then I got my taco.. booms

 

Pay for everything in CASH, fuck credit.

more of a hassle to appease the credit report than it is to save and pay cash.

 

While I agree and very wish to do it your way, theres no way Id be able to save 200k for a starter home in CA before Im 40. Credit is unfortunately a necessity sometimes.

 

A home is the only reason in my eyes to build credit.

Something about paying 5k at once to pay off a student loan and it dropping my credit makes me want to flip a big middle finger to the whole system.

If paying off a loan isn't showing financial responsibility i don't know what does.

And getting denied a home loan for a $10 dispute.

Fuck the system lol.

 

thanks! I want to keep most of the conversing in the thread to help others that are in my situation. I will pm you if need be though

another question: Since one of the reasons I got denied was because "too many inquiries in the last 12 months", should I hold off on doing anything for a year?