A few months ago I decided to build credit and opened my first CC which was a Cap1 secured card. It has a $3000 limit which I deposited. Credit Sesame says my score is N/A because not enough time has gone by. Will I have a score after 6 months has gone by (I have paid off in full every statement) and if so, should I then open a new "real" card at that point and close this secured card to get my $3000 back? Should I keep this one open because my credit will go back to N/A if I close and/or will it hurt my credit? Thanks.

Canadians in general are in much better shape than Americans thanks to being spared the worst of the recession. This will likely change once interest rates rise and/or our housing market goes down, which should be soon (and in fact is already happening in some cities). The average household debt load in Canada is already worse than it ever was in the US.

Negative accts fall off in 7 years. Positive accts fall off 10 years after being closed.


I just wrote a long post about payment history that got eaten. Bottom line, Fico doesn't release their exact scoring model to the public. In my experience total payments has a large cumlative effect, up to a point*. If you're looking to have the best possible score 3 years from now to buy a house and you have 2 three year old credit cards now. By opening 5 accts tomorrow you'll more than double your total positive months reporting by that time. That's not to say you'll double your history score as not having any negatives is a huge issue, but total AMOUNT of history is a big factor as well, and history is by far the most important basket. There are a lot of points on the table here.


*My example is tame and should be totally uncontroversial in the credit building universe. You can get more extreme and still see gains, but you will face diminishing returns with opening new accts at some point.


I wouldn't dick around with opening credit cards for a score boost if you plan on buying a house in the next year or so.

I don't have experience using their suggestions, but those type of "offers" are how the site makes money. Make sure you do your own research.

If you cosigned a car loan then you are already trusting her to do the right thing so I don't think it matters.

Requesting a credit limit increase almost always results in a hard pull and that's why people say it's bad. For the same hard pull you could get a new credit card with it's own limit and new perks. And if you wanted to, you could transfer a portion of that credit line to your old card if it's with the same lender without a hard pull.

According to Wiki, it's a negatively skewed distribution:

The other option is to just keep savings in an "emergency fund" so to speak to add some slack.

650 actually isn't that bad. You need to check the SOL on your debt (varies from state to state) just to make sure they won't sue you. But once that falls off you should be in very good shape. If you need more credit ask for a limit increase or apply for a card with the bank that has your checking/savings account. You may be able to leverage your relationship with the bank to get a larger limit.

Is there a reason your first card is a secured card? Most people who don't have a history but have a income can usually get approved for a basic department store card. I would try to open a "real" card and close the secured card to get your money back. I don't think it's worth having 3k tied up just to keep your credit history. Check creditkarma also to see if they have info for you.

This is actually pretty interesting and I look forward to seeing my score in 6-12 months as my cumulative history adds up. Before I close cards w/ annual fees that is.

Someone's credit score will always be fine if they do two things: pay your bills on time and don't tap out your available credit.

JL, I got the secured card as just a way to guarantee starting building credit with more than a minuscule limit. I'll wait until I have it for 6 months, then close it after I get approved for a regular card, hopefully I can get some kind of reward card. thanks.

So having the highest limit of credit possible with lowest utilization is always best? I think I read having too much available credit while not using much was actually a bad thing.

Please advise if I have any holes in my credit card rewards game:

Chase Freedom - rotating 5% categories
Citi Forward - approx. 4% on restaurants, Amazon purchases (5 TY points for $1, but point redemption is skewed unfavorably for this card)
Citi Diamond Preferred - rotating 5% categories
American Express Costco - 3% gas
American Express Fidelity - 2% on everything
Discover - rotating 5% categories

I guess the big thing is that I'm suboptimal with gas and travel. I'm sure I can find a 5% card for those. Any suggestions?

My professional friends say the amex costco card is the best rewards card by far. You must have some good credit

Costco AMEX card is a jack of all trades. Travel and restaurants @ 2%, gas @ 3%. The Fidelity AMEX is far superior because of its 2% back on any purchase. I feel like I should find a gas-only card.

The US Bank+ card is a good one. It has no AF and allows you to select two of their 5% and one of their 2% CB categories each quarter, but you can pick the same ones each quarter if you wish. The best thing is that one of the 5% categories is "Bill payment" which does not include all possible bills but does include utilities, cell phones, insurance, etc. You can also pick up a bonus $25 if you redeem $100 at a time. The downside is that if you are denied for the Bank+ card, they will substitute a lower-tier card.

It depends what your focus is. If it's just cash back then what you have is pretty good. I would add the PenFed Cash Rewards card if you want a gas only card. You have to pay $5 deposit + $15 to charity to sign up if you're not eligible (armed forces or government employee) but its 5% on gas automatically credited to your statement.

If you have any interest in travel you would probably want a flexible Ultimate Rewards point card like the Sapphire Preferred but you may not like the annual fee from what I can see. Using your UR points from the freedom for cashback is fine but you can get better value by using for travel. For example, 22k points is $220 cashback or a free night in a top level Hyatt, like in Paris, which would retail normally for ~$1k. But without a flex card like the SP or the Ink Bold/Plus, you won't be able to transfer to Hyatt. But as I said, for strict cashback you have a good setup.

Only thing I would mention is to make sure you are using shopping portals as much as possible to get additional %. Always check a site like www.evreward.com for what portal is paying the best wherever you are looking to shop and clickthrough them. There are some very good opportunities at some places through portals. For example, through the Chase UR portal Sears will occasionally go to 10x points. Sears is one of the few retailers that will pay out points for buying a gift card, and for using a gift card. So you go to the portal, buy a $500 gift card, and you will get 10x points (roughly $50). Then you go through the portal again, and buy a washer or whatever it is you need, and use the giftcard to pay, and you will get another 10x points. All of the sudden, you just got 20% off some appliance you wanted to buy anyway.

I don't have the Bank+ card because there are too many other valuable opportunities for me at the moment, but a lot of people really like it and are very excited about it. I would wait a few weeks until a couple of ideas are tested. Basically it looks like you can use it for 5%, but with the $25 bonus its actually 6.25%, and potentially even more. This is a card to keep an eye on, especially if your focus is cashback.

I'm assuming that once you get up above a certain number x, increasing your credit score won't really matter. What is x? Mine was at 777 a year or two ago, haven't tried to look it up since. Have a card, always pay it off in full every month; I've also been on my mother's card since I was 17-18 or so and she has flawless credit. As long as the number stays good, will it matter if I want to buy a house in a few years' time? Or is there anything to be gained from gaming it to go even higher/

Yes, that's pretty much the gist.

Most financial institutions will have their highest credit tier somewhere around 720-760 (talking about FICO scores). Some (USBank is one) have tiers that go all the way into the 800's but the differences between them are basically negligible. Maybe rate differences of .05% or less.

Which brings me to one more thing to talk about:

Credit scoring. One of the most confusing topics that come up all the time recently and, at least in the US, the government has tried to do things to make it easier to understand, but of course failing.

The most confusing portion of credit scoring is that there are so many types of scores that have algorithms that vary slightly and most importantly have scoring ranges that vary as well.

For example there is FICO, Beacon and Vantage - probably the top 3. Vantage is typically the score you'll receive if you buy a TU credit report from a site like annualcreditreport.com.

Ok so why is that confusing? Well FICO scores typically range from 350-850, whereas Vantage scores range from 500-990. So a 770 on one score model is not the same as a 770 on the other.

To make things even more confusing most of the major scoring models have industry options as well. The most popular example is FICO. The most popularly used credit scoring model is still "FICO 2004 Classic" with the 2008 model likely a close second (talking about TU credit reports).

However there is also "FICO 2004 Auto Industry" score models which range from 253 - 893.

What's the difference? Well the basic idea is that a FICO classic score is supposed to predict the likelihood that a consumer will default on a new credit account within the next 24 months. However the industry options, like auto (there are others - mortgage, revolving account etc etc), are supposed to predict the likelihood that a consumer will default on a new auto loan in the next 24 months.

There is probably more that I should add to this but this is what I've got for now.

bookmarked. I really need help on the matter, so thanks for sharing your knowledge, OP.

650 isn't terrible and you'd get approved for an auto loan with that but probably pay for it with a higher interest rate.

As far as $11k in hospital bills - the only thing I'd worry about is SOL and where they are in the collection process. Have they gotten a judgment against you? Have they done anything with it? Most states the statute will bar them in around 6 years or so. In Ohio they can buy themselves 15 years if they follow certain procedures and obtain judgment in court. So the debt is collectible long after it is gone from a credit bureau.

In addition to what I already said, make sure you activate your 2 amex's for small business saturday, to get $50 free. Also, I'd make a fake facebook & twitter (with your real name though) and sync them with the cards to activate the Amex sync bonuses / statement credits. And if you have an xbox, sync the amex there too.

I think the way equifax writes it is a bit weird. I saw that same distribution, but I also saw this distribution:

How lenders see you:
Up to 499: 55%
500-549: 33%
550-599: 21%
600-649: 11%
650-699: 5%
700-749: 2%
750-799: 1%
800-900: 1%

I know this adds up to more than 100% but thats what it says; chart is titled "Delinquency rates: Delinquency Rate is defined as the percentage of borrowers who reach 90 days past due or worse(such as bankruptcy or account charge-off) on any credit account over a two year period."

One is a distribution of the total population, the other is a list of odds for independent groups. The latter doesn't need to equal 100%.

JL514, thx for the heads up on the Amex offers. Clutch as hell.

is there an explanation for why uk cashback offers are so meagre compared to american ones?

Yes. In the US the interchange fees charged by the banks are much higher. According to that wiki, they (Visa & Mastercard) make over 30B a year in interchange fees.

If you don't want to click over, the interchange fee is the fee the card issuer charges the merchant for processing the CC transaction. Typically it's a fixed amount plus a % of the sale including tax. A lot like what you pay to use paypal.

If the card issuer makes the bulk of their money from the interchange fees, and these fees are controlled and kept low, they can't offer great rewards. The customer they would offer great rewards to would be the customer who is not going to make them money in late fees and interest payments anyway so they don't have a good way of offsetting the costs of a rewards program.

This has nothing to do with the distribution of credit scores which is what Jim15Qc is talking about.

The chart you are quoting is the percentage chance someone with a given credit score will default. That is why it adds up to more than 100%. You are not supposed to add those numbers.

What Jim15Qc is talking about is the fact that Equifax Canada claims that 57% of Canadians have Excellent Credit which they define as a Beacon score between 760-900. They also claim that only 4% have Poor Credit and only 10% Fair Credit. I agree with Jim15Qc that this seems very strange to me. I assumed more people would have bad credit. I figured at a minimum 20% of the population.

They are pretty bad in Canada as well. I think the US is the abnormality with more generous rewards.