20 And No One Will Give Me Credit, What's Up?

Paul is chasing the American Dream, looking to buy land and build a house on it in the next few years. He works hard, pays his bills on time, and has a good credit rating, but no one will actually give him any credit.

CapitolOne won’t raise his credit limit past $750 and nobody will give him a better credit card.

The roadblock might be because he’s 20. We chat with Paul by IM and offer some ideas for improving his situation.

(Photo: Sam Wilkinson)

paul: I have a good job and a credit rating of 720-730 depending on who you check it with, but I can’t actually get any credit from anyone.
paul: And capital one seems to think that $750 is plenty of credit. I can’t rent a u-haul on that, let alone buy anything more than the gas that gets put in the truck every month.
paul: I pay off the card every month before I even get the bill, but no increase.
paul: I make more than the average household income in the area where I live (documentable), yet noone will take me seriously. Any suggestions?
benpopken: What happens when you ask capitol one to raise your credit limit?
paul: I tried last night, its an automated process, and the recording I got was “We review this account periodically and will notify you when we want to raise it. At this time there is no other evaluation process available”
paul: To be fair they did raise it in February from $500, but still how do they expect me to use the card when most of my business purchases are over the 750 dollar mark. I end up using my check card most of the time and covering all of my purchases with money that I shuffle over from Ing.
paul: I don’t like doing it that way, and that doesn’t help my credit at all, but unfortunately it’s the only option that I’ve got.
benpopken: have you tried opening a credit card with anyone else?
paul: Yep
paul: I’ve been denied with everyone who hasnt sent me a pre approval letter first
benpopken: Considering your age, it might be a lack of credit history
paul: Even my bank won’t give me a card after 3 years of loyal usage
benpopken: Well you’re young, credit-wise
paul: I’ve been trying to do this myself, but it looks like I’ll need some help
paul: I intend to buy some land and build a house in the next couple of years so I’m trying to focus on this now so that it isn’t a problem later.
benpopken: right, that’s going to be hard without a credit history
benpopken: See if you can get a parent to sign you on as an authorized user on one of their credit cards, that should boost your credit history
benpopken: Do you have a car?
paul: Yes, paid for in cash
benpopken: take out a loan using your car as collateral
benpopken: put the loan in a high yield online savings account, or a CD
benpopken: then pay back the loan all nice and it will help build your credit history
paul: Sounds like a good idea. I’ll look into it.
paul: I’ve made it through college and most of my life by working hard beforehand and only spending money I have thinking that that was what would get me ahead later.
paul: Turns out it hasn’t really helped me at all for credit, although it is nice to not have thousands of dollars worth of school loans to pay off.
benpopken: Yeah unfortunately that kind of excellent ethic doesn’t show up on paper
paul: *shakes fist*