Credit Score Questions

How do your credit reports differ? In particular, what negative items are on one report, presumably the lower score one, and not on the others?

 

If all of your accounts are reporting paid as agreed, never late, then your main limitation is that you have limited existing accounts with limited available credit, all recent with history under a year, and are still showing the inquiries from opening them. Almost any balance on your CC accounts, even if paid off monthly, will use up your credit lines, and you have your car loan balance on top of that.

You look very "new", with credit limits at "starter" levels. In addition you are carrying a large balance on your car loan, and have only begun to pay it down and establish your ability to do so.

Think in terms of building longer term credit relationships, for later goals such as home purchases on good terms, etc. Thus you put your efforts into opening only accounts with better terms, dealing only with banks with good reputations. With your current limits, your next step might be to limits of 1000 to 3000. Ratchet your way up.

Make sure all accounts are paid on time, make sure they are reporting accurately, and as you approach a year on your newer accounts, you should start to get some offers. Choose only the better ones, with the lower rates, no fees, etc. No more than one new account in 6 months to a year, but don't let your total balances rise. In fact, you have no reason to want to carry balances at these levels anyway. Your goal is to let your existing accounts age positively, and start getting larger credit lines, not to actually use this credit at this time.

Or you might open an account with a credit union, and get a CC there. You would also establish an additional credit relationship that might be useful in the future for car or home loans.

 

Two is not yet a sample to be able to know what you are likely to be offered, but start tracking the terms. Although you might get better terms with a new Chase offer than your existing card, you might want to open an account with an additional creditor first. That way, you will have less chance that any change in how one company views their risk with you will impact your overall access to credit. Diversify.

See what offers, and particularly what interest rate terms you get over the next several months. Anyone will offer 0% for some period, but what does it go to? Variable at what % over prime? Fixed, how low? What are their fees? Are they selling "rewards" that you may, or may not ever benefit from, but you pay for them with high interest either way?

The fees and default terms will also give you a clue to how they view you as a source of business. Do they value the volume of transactions, and merchant fees, they expect you to generate, or are they offering you some teaser rate, hoping you will screw up so they really make their profit on their fees.

You may never make a late payment or default, but if their terms in these areas are excessive, it might indicate you would have problems if a dispute occurred. They would rather have their fees than your business. And those with the worst records of legal compliance in payment posting will probably have the highest fees. By contrast, credit unions will probably have the lowest fees.

They screen you based on your profile as a consumer and borrower, you screen them based on their terms, and any reports of problems.

Some creditors think you are an inexperienced dumb consumer. Others will value your payment record, and realize their business with you will grow. Which would you choose?

In our society, you do need credit. Certain transactions, such as home purchases, and travel, depend on it, and you are safer using credit than cash or checks, or debit cards.

But you don't need to borrow to buy everything, and you don't need to pay interest to a bank on every purchase you make.