Archive for January, 2013

Establishing credit: update

Now that we’ve all figured out how the system works and how it wants to be gamed, we can use it to our advantage.

As mentioned, Capital One offered me an initial $300 credit line. For six months, I was very disciplined and regularly spent small-ish amounts, never exceeding a balance of $200. Remember, never get too close to your limit! I redirected some of my subscriptions (Kindle, Netflix) to it so there would be small and, most importantly, regular amounts. Also, I paid every balance always in full and always on time. Also very important! After six months they quietly raised my credit limit to $500. W00t! Still not much but at least I’m moving up. I’m guessing they will keep going up if I stick with it.

Now for my prepaid Amex. There is no way of “upgrading” this prepaid card to a real one; so much for that. So I just kept spending and reloading; I typically have a $100-$150 positive balance on it (no interest of course). It’s a bit of a pain because reloading takes several days–yeah, the money is gone from my bank account but Amex gets to play with it for a couple of days! Not cool. I also tried to contact Amex several times regarding a “real” card but every time I was referred to their general website where I could apply along with everyone else. So, I decided to give up on it. Keep in mind that you shouldn’t request too many cards at the same time or too frequently as this is negative for your credit.

Along with the $500 credit line from Capital One I started getting my first credit card solicitations. Never anything major, but I think I was offered the Discover card twice. With a $700 credit limit. Yeah, whatever.

Then, I applied for an Amazon Store Card in November–about 6 months into my experiment. To my surprise I was immediately accepted. And with a $1,400 credit line no less. So, I have started spending on that. I bet that after six months they will raise that limit, too.

And now for the big news… Today, 8 months into my experiment, I received an offer from Amex: for a real card (yep, the green one). I’m contemplating applying for it, but I have two good fires going right now (Capital One credit card, Amazon Store Card), so I wonder if I should. It’s free in the first year but $95 as of year two. Also, I want to apply for the Amazon Credit Card once they set their welcome gift back to $50 instead of currently $30. Don’t apply for too many things, remember!

I will report back 🙂

PS Oh, I should also mention that I requested my annual credit report from in December, the only legit source. Alas, both Equifax and TransUnion screwed this one up: Apparently, if you haven’t been in the system long some random information pops up including on your verification questions, so both were inaccessible and hence completely useless. Plus, there is no point trying to correct it because it’s a system flaw. Experian was great, however, giving me full and accurate information. I didn’t request my score as it’s probably very low anyway, but I will request it later on this year.

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