<p>My sister just talked with me yesterday. She said her D had EXCELLENT credit history & score when she graduated college with 3 credit cards. She recently decided to cancel 2 and then because the 3rd one was going to charge her a monthly fee, decided to cancel that one as well. She now has a very low credit score and can’t get ANY credit card.</p>
<p>She’s never been late for a payment, never had any installment credit, never had anything sent to collections. Is this normal?</p>
<p>Sister warned me I ought to be careful about cancelling credit cards & even our line of credit (tho we’ve never drawn on it). I’m thinking of closing some of our credit cards because we have soooo, soooo many at this point and it seems silly. Additionally, some of the companies charge annual fees.</p>
<p>Any thoughts? When we got the Home Equity Line of Credit (HELOC), we got a copy of our credit score–both were in the 800s, with H’s approaching perfect & mine slightly lower since I had applied & gotten a credit card shortly before the HELOC app.</p>
<p>Thanks for anyone who can shed light, especially with the changes that may have occurred to the law since credit reforms have been enacted. Our D is 22 and interested in building her credit history, but she’s still a student and has NO job (we’re slightly lukewarm but are helping her get a copy of her credit report to look at; we have had a few credit cards in both our names & not sure if that has been added to her credit report). S has had no trouble getting credit cards & building a history since he graduated with job-in-hand in May 2010, though he has never had any loans but pays his condo rent on time.</p>
<p>When you close a credit card, you increase your debt to credit limit ratio. That is not good for your credit score. This is not a new rule, but has been a contributing factor to FICO scores for some time now. I wouldn’t ever officially close a no-annual-fee card.</p>
<p>If you have “soooo, soooo many” that you do not use, especially annual fee cards, or store cards (which may downgrade your credit score for insurance rating purposes), dropping a few of them may not be a problem. But be aware not to shrink your available credit so much that your percentage of credit used gets high, as noted above.</p>
<p>Well, our HELOC is for 6 figures–we have NOT drawn on that AT ALL. Does this factor into our debt to credit ratio? If so, we have virtually no debt to credit that is in the 6 figures. Does this matter at all? We all find credit issues confusing.</p>
<p>We prefer to pay for as much as we can with cash and hate having loans; we never carry a balance on our credit cards. We only got the HELOC because it was totally free to apply and has no annual fees or charges AT ALL.</p>
<p>We only have three credit cards that have annual fees–all the others are free. We have never been denied any credit cards we applied for or anything else.</p>
<p>The person who can’t get any credit card does have a job (not high-paing but still a government job). She lives at home with her folks and is >26 years old.</p>
<p>“Well, our HELOC is for 6 figures–we have NOT drawn on that AT ALL. Does this factor into our debt to credit ratio?”
Of course!! you COULD take out $1000000! Right now! Any credit card company/ lender would have to assume that possibility in determining your future credit risk! So if you want to raise your credit scores, go and lower the HELCO to no more than you actually might need to borrow. or close it.</p>
<p>^^No, I don’t think it works that way. If you lower the HELOC, you have less available credit. And God knows, they may never raise it again, the way real estate prices have been. Anyways, it’s 6 figures, not 7, which is not an unusual amount. I would cancel department store credit cards that you never use, and annual fee card that you never use…as long as they aren’t ones with big credit lines and long histories. We have some that we never, ever use, but we have over a 20year credit history with them, and large lines. I’m sure that helps. But just know if you cancel too many little ones, your credit may take a hit, but probably only temporarily.</p>
<p>The bank forced me to close our HELOC because we never used it. I believe my credit did drop but still much higher than 750. You don’t need to be higher than 720 to get excellent mortgage rates. My daughter applied for a credit card when she was 18 from Bank of America without a job, as a matter of fact, Bank of America told us the same thing for D2, she can apply for credit card without having a job, it’s a student card. They won’t give credit card to anybody younger than 18.</p>
<p>OK, we mostly only have credit cards that are free and I guess we can just let them sit around. We have many times in equity what we have for the HELOC, so that should also probably factor in somewhere. We are curious to see what D’s credit history shows, since she’s far more likely to need credit in the near future than we are–to purchase a home down the road and other big ticket items. </p>
<p>I’m assuming S has stellar credit because he was given a gold AmEx with no annual fee for the 1st 2 years. He now has several other CCs, no expenses and pays all his bills on time. He has no debt. He has a secure job with a good employer, where he has worked for nearly a year now. He also has significant savings, though I understand that is not included in credit history.</p>
<p>Does anyone know if kids get a credit history if they aren’t the primary cardholder, but just another user? My sister said that her daughter’s credit was over 800, and that the only credit cards she had were her parents, as an additional user. But I barely can believe that.</p>
<p>Thanks, Insomniac–is that still the case since the more recent credit reforms? If so, that bodes well for D, who has been listed on my card(s) for several years now; we have carried no balance & always repaid on time.</p>
<p>I’ve read some articles that say the legislation of 2009 makes just being an authorized user insufficient but being a JOINT ACCOUNT HOLDER or JOINT APPLICANT would help build a credit score.</p>
<p>Have requested a credit report for D, just to see what is and is not on it, so we have a better idea of how things look and if she wants to perhaps apply for any joint accounts this summer.</p>
<p>Yes, that is still the case. My cousin who just turned 19 has been on her parent’s credit card for a year and it reflected well in her credit scores.</p>
<p>You can use <a href=“http://www.annualcreditreport.com%5B/url%5D”>http://www.annualcreditreport.com</a> to get a free credit report once per year from the three major credit reporting companies. Note: they may try to sell additional stuff, but you can still see your credit report without paying for any of the additional stuff.</p>
<p>D has been on my credit card at least since 2009, so that should be helpful to her. Did use the website you listed, UCB, to order an Experian free credit report. Will see what comes up.</p>
<p>I actually just tried to order my free credit report from annualcreditreport.com earlier this morning and it wouldn’t let me. I answered the identifying questions on experian’s website and they told me they couldn’t honor my request. I am finding this a little bit disturbing… but I have identity theft on the brain, I’ve been trying to help my boyfriend get a fraudulent card taken off his report for weeks. :(</p>
<p>You can also use creditkarma.com to see if anything looks fishy. It’s not a full credit report, but it’s enough to see if something looks wrong. Plus you can update it daily rather than only once per year.</p>
<p>The credit raising game is tricky at best. If you never use credit, carry zero balances your score can suffer. Just keeping a $20.00 balance is better than not using it at all. NEVER cancel cards that have long histories, it can drop your score significantly.
An authorized user gets the boost of the age of account. Timely payments/debt to utilization are what carry the most weight.</p>
<p>YOu can get a secured card thru most local banks that offer it. Deposit an amount(not sure if there is an minimum amount) into the bank, the deposit is the collateral, they issue you a card. Utilize the card, for small purchases, pay the bill. Each month that goes by the credit score will increase.</p>
<p>Credit reports do not indicate whether you are carrying a balance or paying interest on credit cards. A credit card used once per month and paid in full within the grace period will show a nice record of paid on time every month.</p>
<p>I have had many credit cards since I was in college in the 1970s. I have NEVER carried a balance but always paid off in full EVERY month (we do regularly use our credit cards, which give cash back and/or other benefits). I have always had excellent credit & gotten the most favorable terms. I only had a small educational loan when I graduated, which I paid off regularly every quarter when billed. I also have had a mortgage which we paid off every month, including pre-paying a significant amount.</p>
<p>It is NOT necessary to ever carry a balance to get/have excellent credit. Our S has great credit & has NEVER carried a balance in his life or paid ANY loans. Probably the only loan he is likely to pay is a mortgage when he buys property.</p>
<p>When D tried to get a credit report on the website listed on a prior post, she was informed she’d get information by mail to get her credit report. She only tried one agency. After she gets the results from that agency, she’ll try the others.</p>
<p>My D was credit averse and did not get the easy cards while in college. She also didn’t have college loans. She had a heck of a time getting a credit card later on, though securely employed. Finally did the secured card about two years ago. That seemed to be enough, as when she and BF recently applied for a mortgage, her credit score was fine. </p>
<p>It really did perplex me that, because she’s so careful with money, she had more trouble getting a card than someone who’d run up a bunch of debt.</p>
<p>But she has her house now (moved in last week! :)), so it shouldn’t be a problem again.</p>