please help! credit won't go up

please help! credit won't go up
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#1

Hello everyone! I’m 26 so my credit history is fairly young but I’ve taken great care into building it. I started using NerdWallet at the beginning of this year and I’ve followed my credit score closely on CapitalOne’s Credit Wise since about 2016. I have 5 student loans, never been late, no derogatory marks, no mortgage or car payment, all that jazz. I’ve paid off two small loans and have 3 larger ones remaining that total $16k.

My junior year in college my dad got a credit card offer through our bank that was meant to help young people build their credit history responsibly, by basically “sharing” with a parent, so my and my dad were on the credit card. I used it a few times a year to show that I could keep my credit usage ratio down (the limit was $2,00) and make monthly payments. Early 2018, our bank cancelled the card, due to my dad’s credit challenges. While there’s nothing “negative” on my report obviously it looks bad now because I have no credit.

When I first got on CreditWise I had a 707 score, which climbed up to 747. When they closed the card I plummeted to 681. Obviously, I was devastated. A few months later it returned to 707 and I was fine. I didn’t have a job at the time so the interest on my student loans climbed a bit, but I was on an IBR plan and making payments, but my score returned to 681 because my “loans increased.” I got a new job at the beginning of this year and I’ve been paying the loans down but my score has only gone up to 684.

Whenever I check things to do to increase it on NerdWallet and other places they say “Your credit report is squeaky clean, which means there’s nothing here for you to do. Nice!” All of the tips don’t work for me because I don’t have anything “bad” on my report. I want to get a credit card again but I’m limited with my options because of my score and I’m really discouraged because I’ve done everything right to this point. Something that wasn’t even my fault brought me to low and nothing right that I do now will take it any higher. Even when I simulate opening a card to have credit it’s only going to boost me 4 spaces. Please help.


#2

Hey @cjhowze15! Thanks for that detailed info.

The good news is, your score in the upper 600s is pretty decent — you’re pretty close to crossing over into the “good” credit range again (690-720). But, I hear you, you want to build your credit even more. And you’re smart to be thinking about it now, so that you’re well-situated when you want to more credit in the future (a car loan, say, or a mortgage).

So, there are credit cards for people with fair credit. You won’t get high-end rewards with them, but they’ll do the trick of expanding your credit profile and letting you build up a record of responsible credit usage (paying on time, using less than 30% of the credit limit).

If you decide to go for one of those, apply strategically — that is, check the qualifications required to get the card and make sure you’re applying for one you can get. Each credit application can cause a small, temporary drop in your score regardless of whether you’re approved, so you don’t want to apply for something you’re not going to get.

If you want to be ultra-safe, you could simply go for a secured card. With those, you put down a deposit first, so they’re easier to get (if you flake out, the card issuer has your deposit money as collateral, essentially). Some secured cards will let you “graduate” to a regular, unsecured credit card after a certain period of paying on time.

Check out our guide to How to Build Credit for more on secured cards and other options.

Finally, I see that you had checked out the credit simulator to see how opening a card would affect your credit. Any simulator is an estimation, not a prediction of exactly what will happen. Keep in mind, that 4-point boost the simulator estimated for opening a credit card is likely just for exactly that: opening up a new card. If you go on to use that new card in the best possible way — never missing a payment, always paying on time, using just a small portion of the credit limit — over time you will likely grow your score much more.


#3

Thank you @khinson! This was very helpful and encouraging. I’m still learning this whole credit system thing so that means a lot. I checked out the credit cards list and I’ve been leaning toward the CapitalOne Platinum since it’s essentially for people just like me.

I never thought about it as a whole process…getting the card and using is wisely overtime to boost back up. I need a little more patience :joy: Thank you again!


#4

@cjhowze15,

That’s great to here you’re in upper fair credit score area. I have a suggestion for you to help boost your score. Experian offers Experian Boost for free(I strongly suggest getting it before Experian decides to charge for it). What Experian Boost is, it’s a way to raise your credit score through on time payments of you utilities. Qualifying utilities are Gas & Eletric, water bill, cell phone/home phone, etc. You need 3 months of on time payments on any one of those utilities. It will raise your score up to 16 points on one utility. All you need is a valid checking account(hopefully yours is listed-I had to wait a couple months for them to add mine, it was worth it). They have an app for the phone for it(I don’t know if there’s an iPhone version, I prefer and use android). The only downside is, it only applies for Experian.

Another suggestion is, if you rent where you live, there’s rent karma dot com. Not sure what they charge per month but it’s reported to all 3 credit bureaus. And for an additional fee you can add back rent up to 2 years back.

I’m NOT a financial adviser. I’m just an average Joe trying to repair my credit due to a fabulous disaster. The things I share are from this site and abroad. My hope is, by sharing this knowledge someone may benefit(like I have)from this!

Sincerely,
DeadManMoshing


#5

Hi again, @cjhowze15.

Related to what @deadmanmoshing said about rent reporting. If you want to go that route, you’ll want to check to be sure that the agency you choose reports to all three credit bureaus. We’ve updated our guide to rent reporting. To the best of my knowledge, Rental Kharma reports to TransUnion.

It’s important to know that you can build excellent credit without rent reporting, and that it is not considered by the credit score most often used in credit decisions. With a new credit card in hand, you may not need it. Only you can decide if it’s worth it.

Hope you’re doing well and beginning to see good results.