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*


Edit Your Comment

  1. tentimesodds says:

    If paul is in college, he should look for college student credit cards from someone who isn’t Capital One. They give notoriously low limits. I had $5,000 by graduation with American Express…

  2. JuliusJefferson says:

    I have a feeling that most credit card companies assume that if someone is 20 years old and has a high credit score, that his or her parents pay the bill.

  3. Two years ago, when I had just moved and was out of work Chase gave me one with a 4 figure limit and just raised the limit last year.

    PS Capital One sucks.

  4. The Bigger Unit says:

    Being Canadian and coming to work in the US, I had to start over with my credit; I started with CapitalOne, then got a Citi card with a higher limit, and then American Express Blue came knocking. I use the Amex card primarily now, and they have been great with upping the limit. My CapitalOne card started with a $300(!) limit…after about 2.5 years b/w these three cards, my Amex card has a significantly higher limit now. In fact, I really can’t believe they gave me the limit I have, since I don’t make all that much money.

    I guess bottom line with credit increases is: (1) Pay large chunks of debt off every month (if not in full), and (2) You simply need time to gain credit history for a limit increase. Like I said, I have had a great experience with Amex Blue, and have more credit than I’ll ever use. They upped my limit 10x in a matter of months, once I showed I would pay off my purchases with large payments.

    And now I get freaking credit card offers every damn day in the mail.

  5. codegrl says:

    I’ve had CapitalOne for years, they STILL haven’t given me a credit line increase, and my credit started out crappy when they issued my first card and now it’s excellent.
    I remember reading a while back that they had some investigations and such into their subprime lending..maybe google that and see what you can find out about that. Try HSBC, they’ll approve almost anyone, the interest rate is super high, but if you keep a little on there month to month (from what I’ve read, paying off a balance in full each month does NOT help your credit rating. creditnet.com).
    Anyway, I’ve had good credit for over 10 years now and I still get turned down because my credit history isn’t long enough (?!). Good Luck…credit is a tricky thing…maybe invest and see if you could buy that land out right?

  6. The Bigger Unit says:

    @The Nature Boy: D’oh…”They upped my limit 10x in a matter of months”…as in, they increased my limit by 1000%.

  7. robbie says:

    I, too, could never get CapitalOne to up my limit, and I needed a big card for a new computer after mine was stolen. I went to my local Bank of America and promptly got a credit card with a huge (huge) limit. They asked for information about my rent and income and went from there.

  8. AtomikB says:

    Remember that credit card companies don’t like you to pay off the balance in full every month. You might try carrying over small balances, so that their computers will see you as a potential source of profit. They’re not making any money off of you if you pay everything off every month.

  9. JohnMc says:

    Ben, some good advise there. Something else Paul might want to do is inquire into his credit history to make sure is appears clean. Mistakes and erroneous data get placed in accounts all the time by the credit reporting agencies.

    I had a capital one CC account for about 5 years. It started at $750, was raised to $1000 in year 2. Hasn’t budged since. I am over 50 and am a seasoned credit history, and have 30x times this on other CC. I finally cancelled. My point is I think it might be COne’s mode of operation more than anything.

  10. mikesfree says:

    How does anyone still use capital one? I had one of thier cards at it was one of the worst. Besides a lost payment that I had to deal with multple times to resolve, you get to listen to ads and sales pitches evertime you call in. I am mainly an AMEX and Discover user now.

  11. MrFoof says:

    A recommendation I would have is to try to obtain a credit card from a business you frequently make purchases from.

    For instance, if you shop frequently at Amazon.com, it might be to your advantage to get an Amazon.com VISA card (I have one, it’s great!). They’re more likely to offer you credit since you’re a regular customer.


    As for the age, creditors are likely being a “bit” more cautious than they were, say, 5 years ago. Paying for your car in cash did save you money by avoiding interest, but you prevented yourself from having a good opportunity to build credit. It seems silly, but as other people have mentioned, you have to show you can earn the creditor a profit.

  12. Juncti says:

    Silly consumer. Don’t you know that to get credit you need to default on cards, carry high balances, and pose a non-payment risk? Do that for a month or two and you’ll get so many pre-approved applications you’ll have a small fortune in credit available.

    Pssh, paying on time and only spending money you have? It’s just not the American way!

  13. Sandtiger says:

    Get a store card to start with. Sears card is one of the easiest to get. make a small purchase each month and pay it off. After about 6 months of that try for a regular credit card. Thats how I got my credit started.

  14. mikesfree says:

    I got off on my capital one rant and forgot why I started writing. If you can find a local bank and talk to them about your finances, and your goals in a few years, you should. Having a realtionship with a small banks loan officer is a real help sometimes. They may know of things that will help you to get moving. Dont be scared of banks. They are a business. Be upfront with them, tell them how you arent getting a lot of chances and if they will help you, you will help them by being loyal to them.

  15. aka Cat says:

    paul: I pay off the card every month before I even get the bill, but no increase.

    I think this may be your problem. You never owe them interest, so there’s no profit for them in increasing your limit.

  16. zaq2g says:

    Sounds strange to me. I got my a Capital One Mastercard a little after I turned 18 and by the time I turned 20 I had a Visa and an AMEX with a total of around $10,000 in credit.

    Capital One was my fastest growing card, I started at a $300 limit which slowly increased to approximately $750, then quickly jumped every month or two to $4,000. I don’t know the reasoning or logic that cap1 uses to increase limits. But I know I almost always paid my bill in full. Once in a while I let a small balance ride, but I was never late.

    I also didn’t have any credit history outside of credit cards, my car was in my parents name, I lived at home and didnt have any bills until I got a cell phone when I was 20.

    Additionally the handful of people I knew that recieved Cap1 cards when they were 18, also started low in the $200 to $300 and quickly raised if they paid thier bills on time.

  17. Notsewfast says:

    I agree with AtomikB. It might seem counter-intuitive, but carrying a balance a few times might get it bumped quickly. I paid my Wells Fargo CC off every month for the first 2 years I had it and it was stuck at $1,000, then one Christmas season I let around $200 slide for a month and have since had exponential gains, even though I still pay it off frequently.

  18. virgilstar says:

    Something else to be aware of…

    Every time you apply for credit, a “hard-pull” on your credit record is performed by the company you’re applying to, and the pull itself gets recorded in your history. A few hard-pulls all at once around a single theme (e.g. auto loan) followed by actually taking out an auto-loan, is not too bad. A consistent string of hard-pulls on a single theme (auto loan) eeked out over a 2-3 year period indicates that you’re still shopping for that item, which can be a turn-off for some lenders.

    You should also consider approaching your credit union, for when you finally come to get a loan for land/house – get in their good books now and it will come in handy later.

  19. chrismar says:

    I was in the same boat as Paul a few years ago. What really helped me was getting a credit card under my parents. They called Amex, said “My son wants to start building his credit”. They said “Ok”, and a few days later I had an Amex green card. After a few years with that I had no problems getting credit anywhere else.

  20. glomm says:

    I have had a pretty good experience with CitiCards. I am a college student with limited credit history and they gave me a dividend card with $1000 limit last year. Since then, I have paid in full every month, and every few months I am able to request a credit line increase which is automatically fulfilled. I now have a $5500 credit line with them, which is reasonably high for someone who is also 20.

    There is one very good reason to get a Capital One credit card, assuming you already have some credit elsewhere: no fees on foreign transactions. They even cover the 1% Visa/MC charges, so they are great for use when traveling. Their online money-market is also good for travel, since you can make 6 ATM withdrawals per month and there are no ATM fees or foreign transaction fees.

  21. jameslutz says:

    This may sound like a commercial, but its not:

    Why do really need the credit? Use your debit card spending the money that you have. I am finally paying off my last credit card now and it feels so nice. I now only buy what I can pay for and save money to buy larger items. Use the debit card in place of the credit card.

    You should go to http://www.daveramsey.com
    Dave explains how to do these things without credit. Example, buy a house from a mortgage company that uses manual underwriting, etc…

  22. Saeculorum says:

    Here’s the strategy I took:

    Background: When I was 20, I had absolutely no credit record (no student loans, no credit cards, obviously no mortgage). Worse, I lived on my campus at my college, so I didn’t even have bills to verify my address. It really was a pain!

    Solution: After quite a few rejection letters, I opened a checking account at Bank of America (for a $150 bonus). The representative asked if I wanted a credit card. When I said I’d be rejected, she said that “they don’t reject anyone.” Of course, they did reject me. So, I pestered the representative to fix her lie and in a month, I received a Bank of America Gold card with a $500 limit. Six months later, I applied for a Amazon.com card (received $2000 limit) and a American Express Blue (received $1500 limit). Every three to six months after that, I applied for credit increases and by the time I was 22, I had a $7500 limit on my Amazon.com card. This required carrying no balances and playing no tricks, just persistant and repeated credit line increase requests.

    I don’t believe that carrying a balance influences the credit card company at all – realize, the majority of the profit that a credit card company makes is from the fees they charge merchants. Quite a few people on fatwallet.com agree with me.

  23. ldnyc says:

    I’d suggest opening up a department store credit card, which will help build a credit history. Think Macy’s, etc… You’ll be approved on the spot and all you have to do is charge something inexpensive and carry a balance for a few months (paying the minimum, which is better than paying off in full for these purposes) and then pay off the balance and hang on to the card for future use if you need it.

  24. muddgirl says:

    The best way to get a credit limit increase is to call during business hours, get a real person on the phone, and mention that you have a specific high-dollar purchase in mind, but your credit limit is too low to cover the whole amount. In my friend’s case, it was a couch.

    I had the same problem, though – after I got my first job, I could only get student credit cards, which had a $600 limit and a 17% interest rate. After a few months, I applied for and recieved BofA’s AmEx rewards card, with a higher limit and a better rate, and a decent Rewards structure.

  25. techgeekwill says:

    I am in a similar boat.

    My credit score is not that high, but it is higher than most. However, it is close to impossible to get a Credit Card or a loan.

    I am 21, I have two paid off car loans, 3 paid of credit cards. I have had several utilities in my name. When I do get a loan, I get an awful interest rate.

    One of the biggest factors that weighs against me is that one of the Bureau’s (not sure which) does not accurately report my income. I have asked them to update it, but they still report the income I had from 3 years ago. I have more than quadrupled that.

    The most prominent reason for being declined though is still the fact that I have only 3 years of credit history. Even though my credit is in better shape than most my age, and most people period.

  26. mac-phisto says:

    assuming you’re trying to obtain a “bridge loan”, credit cards aren’t going to help you (a whole lot) in this department anyway. even ppl with excellent credit history run into issues trying to obtain a bridge loan b/c they are very risky investments for creditors. my parents had a real hard time building a house even though they had extensive credit history & two previous mortgages.

    imo, focus on accumulating assets – savings acct., retirement acct., etc. b/c you may need to proffer them as collateral.

    you say your income is “documentable”. are we talking paystubs or p&l sheets here? if it’s paystubs, this is a non-issue, but if it’s p&l sheets for a company, do you only retain a small income from the business to reduce your tax burden? this can hurt you when trying to obtain credit b/c your reported income is significantly lower than your actual income. a work-around might be to use the business to purchase the property (with an sba or micro loan) for development & then sell it to yourself when it’s completed.

  27. lore says:

    @CatMoran: That’s not entirely true. If he had a higher credit limit, that meant that more money (more transactions) would be charged to this card. Each transaction results in additional profit for the credit card issuer since the merchant has to pay a transaction fee for each swipe of that card!

  28. Scazza says:

    Kinda feel bad for him. When I turned 17, I got a Credit card (yeah, early) from my bank because I have someone who works there. After a year of work, they upped my limit from 500 to 2500cdn. When I hit 20, I got a call offering me 5000. My brother has worked non stop for 7 years now and his limit is only 2000, so I think there is some sense of randomness. Plus every time I open up a new bank account (i have moved a few times) they always give me 500 dollars overdraft… even the relative that works for CIBC said they don’t get that). I have decent credit (i have missed a payment).

  29. Scazza says:

    Okay, I just realized I didn’t really offer any help at all in my post…

    Goto your branch and talk to a personal banker. Ask how they can help you (they get credit for trying to sell you anything, even if your turned down, so they will help you). Go to a bank your NOT at and talk to their PBs, see if they can get you hooked up if you open up an account there.

  30. Tallanvor says:

    I haven’t had any problems with Capital One. They’ve raised my limit many times without me even asking. I was stuck with a high interest rate for a while, but back around September, I called them up, and they lowered it right away (something I still can’t get Discover to do, even after I zeroed out my balance with them).

    It sounds like you’re not worth anything to them. –You’ve never carried a balance (which is a good thing for you, and is admirable), but when you’re trying to build up credit history, it seems like it’s a necessary evil to maintain at least a small balance from time to time so they feel like they’re getting something more from you than just the fees they charge the merchants when you use the card.

  31. squikysquiken says:

    “I pay off the card every month before I even get the bill”. For my cards, if I do that, the payment doesn’t get reported and I get a $0 balance. It looks like I’m not using the card at all. You don’t have to carry a balance but at least waiting for the bill and paying during the grace period might help. Also, I wouldn’t be too worried about getting a loan with collateral in the future (for a house for example). The collateral, a sizeable downpayment and a good score (even without much record) makes the lender much less nervous about issuing the loan.

  32. Oh man well there’s a whole lot of stuff that people have asked that I’ll try to hit.

    1- I’m no longer in college, I work as a Network Administrator, so the student card wouldnt really work since I’m not a student. Because I have a full time job my documentable income is in the form of paystub documentation.

    2- Why do I need credit? Well at some point I’d like to maybe buy a new car, or at least a new-er car. I’m riding around in a company truck at the moment, so chances are good that I’ll buy a fun car at some point as well. I’d also like to buy a large tv at sometime in the near future. I don’t spend money that I don’t have, so any purchases I make get paid off nearly immediately, but if I understand correctly it’s good for people to see that hey, he made a 3000 dollar purchase and then paid it off. I also don’t get points for using my check card, and when I make 4000 dollar laptop buys for work on my check card, I can get into a heap of shit awful fast if they don’t reimburse me in a timely manner. It’s a shame to have to shuffle money to and from savings to cover stuff like that, but it’s all I can do. It’d make me sleep a whole lot better at night if I had a credit card that I could put stuff on while I waited for my reimbursement (and I’d get points that way as well, you can never earn too many 100 dollar home depot gift certificates.)

    I suppose that my problems stem from my a-typical approach to spending. I budget, and my budget works out to about 50% savings and 401k, and the rest to bills and fun. If I don’t have the money to pay for something I don’t buy it and its that simple. I would like to have that option though, because there will likely be a time in my life when I’ll need to borrow money for one reason or another. Anyhow if anyone has any other ideas, post em up.

  33. case1984 says:

    I ran into a very similar problem when I was 20, and Paul mentioning college leads me to believe he might be in the same situation. If you put on a credit card application that you are in school, then they sift you over to some other department with different rules. I made more than a regular student (by a lot) while I was in school, and every time I tried to build credit by getting a credit card I was denied. As soon as I said I wasn’t in school anymore, I got the first two cards I applied for.

  34. gorckat says:

    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

    Is that accurate? At MBNA, the only time an authorized user was reported to the credit bureaus was when they were a spouse.

    Now, a coapplicant is a different story and could still be added over the phone (at least at MBNA).

  35. tremorchrist says:

    Going off my personal experience working in a call center, something you should be aware of is you may have an ‘NP’ or alternate priced account with capital one. This happens mostly if you applied when you had little to no credit score. NP accounts cannot go above certain limits and have different guidelines. Alternative pricing allows cc companies to give a card to anyone even if they don’t mean their typical guidelines, its just they have lower credit limit caps and much higher interest rates.

    That being said, you could always look into a secured card. If you have the money to pay it off every month anyway, you could put a few thousand down and get whatever credit limit you wanted.

  36. 20 years old and you’re already planning to buy land and build a house? Did the doctor tell you you wouldn’t live to see 30, or something?

    Good for you for keeping an eye on your credit, and doing things right, but fergawdssake get out and live a little! Don’t settle down before you’re even old enough to drink.

    There’s a big world out there, go be young for a while. There will be plenty of time to settle down and hammer in that picket fence when you get back.

  37. Don Roberto says:

    Depending on Paul’s level of maturity, he could be very lucky. Right out of HIGH SCHOOL, FirstUSA (now bank1) gave me two cards, one with 7500 and another with 3500. The rest is history.

  38. some_stupid_nut says:

    Thats odd. I am a 19 year old freshmen in college. I got a credit card when I first got here. In only like four months my limit raised from $1,000 to $1,500. Got a nice little letter in the mail. Seems like my CC company (Chase), wants me to spend more money.

  39. mac-phisto says:

    @paulcrist: ok, since i made some assumptions about you that proved entirely false, you can disregard almost my entire post. see what happens when someone assume? everyone’s time is wasted.

    open an account with bank of america *cringes* & apply for a credit card…they’ve upped the limit on my us airways *cringes again* dividend card 3 times in the past year alone.

  40. Coder4Life says:

    Really good recommendation is:

    Get American Express Blue card which one is for college students.

    I was not able to get like a best buy or a compusa card in the past…

    got a college american express card made 1 single $80 payment.

    SHAAAZAMMM… Got approved for compusa & best buy credit card..

  41. InsaneNewman says:

    @squikysquiken: This is a very good point, and I wonder if you may have hit the nail on the head.

    I got a Citi student Visa when I graduated high school ($1000 limit), and within 6 months called them to enquire about their Rewards cards (I use my card for convenience, and pay off my bill in full every month, so interest rate wasn’t an issue for me). They changed my acount over to their “standard” rewards card: A “Diamond Preferred” Mastercard, and I’ve continued paying off my balance in full every month, and have gotten an automatic credit line increase every 3-4 months. I’m at a limit of $6,400 approx. 2 years since getting the rewards card, and I’m just turning 21 next month.

    Bottom line, be presistant, and you will (eventually) get what you want.

    BTW, Citi’s Thank You reward system isn’t half bad (travel is handled through a direct interface with Expedia, which is rather nice, and they offer tons of different kinds of rewards. Plus, they have the best customer service I’ve experienced with any company – short calls, no annoying IVRs, and problems always resolved.

  42. Yogambo says:

    I’ve dealt with CapOne for nearly 10 years and I can’t believe I still have this one nastly low limit card. I was overseas for about half that time so maybe I’ll use that as an excuse. Anyway, after requesting and getting a few tiny credit line increases while overseas, I set my mind to getting what I deserve when I got home. I found out that CapOne has a number of “programs” with varying credit line caps. My card was in a starter, or credit builder, program. After awhile I reached the max of that program. No matter how good I am, I was told, I will never get a limit beyond my current one in this program.

    Stuck because I didn’t want the credit hit of closing the account, I’ve kept it around. The latest advice I got from someone at CapOne was to try to open an account with a different CapOne program — like the cash rewards program. If I got through that — and she offered no guarantees I would — I was told I could “combine” the two cards and credit limits, opening up to a new credit limit threshold and bumping my new card’s credit limit by the amount available on the nasty old card (and leaving it behind).

    One other point of note, paying off every month is not the smart move when building credit. Leave a little ($100 or so) on there just to show you know how to carry a balance. Banks care about these things. It shows you can manage debt. Paying off those card/s, and rarely getting loans of any size or shape combined with being in one of the “credit builder” card programs with Capital One is likely why you can’t get a higher credit limit.

    I’d also suggest holding off on the applications for unsecured cards for at least six months. That’s hurting the credit rating. Go with a guaranteed thing: open a savings account at your bank with say $1000, then approach them about getting a credit line on a card with that $1000 serving as collateral. That’s usually a lock and will help build you up.

  43. @permissionmag: In the area where I live (and I’d like to stay) land prices have been going up nearly exponentially in the past few years. I’d like to get a few acres while the going is still reasonably good. Hell I don’t even need to do anything with it right away. Chances are I’d log what I wanted to from it on weekends, sell off the wood to make a few bucks on the side, and work on it slowly. Any house I’d build I’d build myself, so it wouldn’t exactly be a 3 month job. My goal is to be in my own place by the time I’m 25, so I need to start into this stuff in the next couple of years.

  44. @mac-phisto: It’s understandable. It’s tough to make educated guesses when you don’t know all the info.

    Unfortunately the closest BoA to me is nearly an hour away. I’m with M&T right now, and as I mentioned in the talk with Ben, they won’t give me the credit card because its not really theirs. They use MBNA, and from what I’ve heard it’s not very easy to get a card through M&T with them.

    One of the things that I did mention when I spoke to Ben but that wasnt included in the article is that M&T doesnt report any info to credit agencies. I’ve discussed it with them. I wish I’d have known that when I opened my account there, because I’d have gone with someone else. Problem is that M&T is really the only decent sized bank in my area other than BoA, and there aren’t really any BoA branches handy.

  45. krunk4ever says:

    The problem is with Capital One. My credit rating’s awesome, but last time I requested a raise in my credit line on their credit card (which is currently at $500), I got denied.

    First off, I have a few credit cards which are all around the $10,000 credit line. The only reason I have a Capital One is their policy in not charging any fees for foreign exchanges.

    My suggestion, try a different bank/company for your credit card.

  46. benn09 says:

    I have a student card from Chase, and my credit limit started at $1,000 and is now $2,000 — doubled in less than a year. I didn’t have a credit history before this, except for my debit card. I’d recommend them as I wasn’t pre-approved for the student card, so they are probably more open to taking someone on who has a short credit history.

  47. wildhobo says:

    I would say don’t follow the advice of the people that are saying to keep a balance. I got a Citi card the day I turned 18 and have had it ever since. When I graduated from college (at 20) my limit was already over 10K without ever paying late. I’m 22 now with no late payments and I have one 15K card, one 8K card, and one 5K card. I do make a good salary but didn’t when I first got the card.

    My only piece of advice would be to try and get a Citi card, they allowed credit increases every 3 months (I think I can’t remeber) without pulling a credit report or verifying anything. If you just hit the “Credit Line Increase Request” tab the next screen would say they could up the limit by $xxx click yes or no.

  48. juniper says:

    Another option that worked for me: CareCredit, the “credit card” issued by GE MoneyBank. These are usually offered by cosmetic surgeons, dentists, veterinary clinics. They’re a form of medical loan geared towards medical needs which are not covered by standard insurance.

    I got a cosmetic procedure done, and the office called CareCredit for me. I was offered $1000 credit immediately, with no interest for a year if I made the minimum payments. I pay out $100/month like clockwork, and I’ll be done before the year is up with no penalty.

    My credit history has improved (and my FICO score went up by 100+ points) since signing up with CareCredit. It is a line of credit (and you do get a card).

  49. RichAndFoolish says:

    Apply for a loan at Prosper.com.

    Pay it back on time and keep it for at least a year (don’t pay it all off too early).

  50. RichAndFoolish says:

    Get a loan at Prosper.com.

    Pay it back on time and keep it for at least a year (don’t pay it all off too early).

  51. RichAndFoolish says:

    Sorry for the duplicate post. Site glitched.

  52. cynu414 says:

    I agree with wildhobo, I got a Citi card just after I turned 18 and they started me off with a $2500 limit. I kept a balance with a rate of %18.25 so i called a year later and they knocked it down to %11.9. In my experience they are great to work with.

  53. FLConsumer says:

    Plenty of opinions here, but I don’t see anyone picking up on the poster’s problem — the pre-approved cards. Pre-approved cards are notoriously higher-risk, but almost always have low limits. You’re not going to get very far if each CC you apply for is only willing to give you a $500-$1k limit.

    Go to a REAL bank/credit union which you have an existing relationship and get a card through them. Also try AmeEx. I’ve seen them issue ridiculously high limits to people I wouldn’t loan $1000 to.

  54. EtherealStrife says:

    Go to a REAL bank/credit union which you have an existing relationship and get a card through them.

    Excellent advice. With no credit history whatsoever I was able to pick up a credit card from my credit union (9.9 and 2k). This was six months into college, when I was seeing significant amounts of money passing through my savings and checking for paying tuition, parking, books, etc. Parents were not connected in any way, other than providing shelter.

    Three years later I’m at 2.9k, and receiving 1-2 cc offers in the mail every day. I paid the balance off in full every month and never missed a payment, so the only money they made off me was interest on savings/checking accounts and transaction fees for cc. They did bump my % up to 10.9, but that was a 1 point bump for all members.

    I should also add that the mail offers are getting better every year, so the monthly full payoff must be positively altering my credit (somehow).

  55. thrillhouse says:

    benpopken: What happens when you ask capitol one to raise your credit limit?
    paul: I tried last night, its an automated process

    What is your first clue that they don’t care?

    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

    Ben, that is just about the worst advice I have ever seen on this site, and you’ve had some real steamers, but this… Take a paid-for car and borrow money against it? Have you ever had a paid for car? That you paid for yourself? I cannot imagine taking a depreciating asset that the owner smartly paid cash for or at least paid-off, and then using it as collateral for a loan. All in the name of boosting what Paul has self-described as good credit score. Its stupid on top of stupid.

    You never asked “Why?”. Why are you trying to raise your credit score? You have a paid-for car, you’re cash flowing your business, you have a better than average income, you’re young, and obviously a bit of a go getter. So what on Earth do you need all this credit for? You don’t need to bring this risk into your life. Young Paul, with no car payments, no credit card payments, no student loan payments, no car-as-collateral loan payments, could own a home and have no HOUSE payments in a relatively short period of time. He could be totally debt-free by 25 or 27 or 30 and own his home. But noooooo. No, no. Quick-draw Ben is dragging him back to the land of payments so he can be average.

    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.

    But it HAS gotten you ahead. You don’t know how far ahead you are Paul. You are rockin’ financially in a way that most only dream about. Paul you are well on your way to the American Dream. If you want a mortgage, then go down to the credit union and get pre-approved. If they deny you, then I’m sure they’d be happy to explain why. But do yourself a favor and slow down for a minute. Don’t get caught in the go-go rich lifestyle. Rent cheaply, and pile up cash for a down payment. The more you can put down, the better. We’d all like to build. I’d like to be driving a Cadillac. I’d like to do lots of things. When it comes to buying real estate, you don’t always end up getting what you initially set out looking for.

    And building? Man, I think its a mistake to build before owning a few houses. Have you ever walked thru a house and said, “What were they thinking”. They weren’t thinking. Once you live in one for a while you’ll see what works and what doesn’t. Building sounds like a lot of fun, but its typically a long, difficult process even when all goes well.

    Seriously, Paul, download the Dave Ramsey Show podcast and you’ll realize just how well you’re doing. And don’t let these debt-mongers drag you down.

  56. FLConsumer says:

    @thrillhouse: I whole-heartedly agree with owning a place or two before even considering building. If everyone thinks banks & car dealers are scum & conmen, they’ve never worked with the construction industry. After a couple of remodels, you learn what works, what doesn’t, what’s worth spending money on, and what quality work looks like. After you’ve done this a few times, you learn real quickly that a $5,000 AC costs less than a $2,500 one, and a $350 toilet is less expensive than a $100 one. Likewise, the highest-priced and lowest-priced bids probably both have shoddy workmanship involved.

  57. garf12 says:

    I dont understand how all this works. I am 23 years old and it seems like I get a letter from AMEX every month saying they have raised my limit. Just got a letter last night saying that they had raised it to $27,500. I guess just my past history of having a high balance that is paid in full every month.

  58. mac-phisto says:

    @paulcrist: i applied for all my BoA stuff online. they love that. plus, i think radioshack is on a debt binge lately…getting a store card there might not be too hard (but it might not help you too much either).

    i would tend to agree with thrillhouse though. if you’re looking at taking out a mortgage in 3-5 years, that’s plenty of time to rack up a down payment. if you have 20% or more to plop down on a house, don’t worry so much about what your credit history is like. a good loan officer will recognize your ability to handle debt & will secure a mortgage for you.

  59. Canadian Impostor says:


    It’s a nice thought to say “continue living credit free”, but when push comes to shove a crappy credit score means you’re going to get terrible mortgage rates.

    I’m 23, with an excellent job. I don’t want to divulge salaries, but I alone make more than the average household income in Fairfield County, CT. I paid for my brand new 2006 German car in cash because noone would give me a loan. I have one credit card, from Capital One, with a $500 limit.

    I have no negative marks on my credit report, it just doesn’t really exist. I have no financial worries other than “When I want to buy a house, will I be able to?”

    It’s really unfair that people who earn considerably less money than I do get approved for these cards and I don’t. I feel like I’m being denied for cards since my history shows I don’t need them and therefor won’t ever pay late. That would be fine if my credit score was a convenience, but like I said: mortgage rates. :

  60. thrillhouse says:


    No. Mishandling your money will get you into terrible mortgage rates. A credit score is not, not a measure of success. And if the only type of loan being offered to you hinges on your crappy or non-existing credit score, then you need to walk out the door and find a place that looks at the person, and not just a number. Thats assuming that you do handle your money well, and have the ability to prove it, such as paying your landlord early or on-time for 2 years.

    That being said, every lender will try to run your mortgage based on your FICO score first. Its just easier. And thats ok. But if they have a brain and know how to use it, then they will be able to offer something called manual underwriting, which looks at the person. No loan officer in his right mind will deny someone with their financial life under control and who is trying to buy something appropriate. Also, you may need to look at and FHA loan. There’s nothing wrong with them, but they are a little different and geared towards first-time buyers.

    As for the cards, if you don’t need them (and it certainly sounds like you don’t), then why do you want them? This need to play the game of ‘building the credit score’ is a myth.

    This can be done. You don’t need credit cards. You can live debt-free. Go read Dave Ramsey’s books, or heck, just call his radio show. He’ll be more than happy to explain how to do it and answer all of your questions.

  61. lakai says:

    I have a capital one card since I was 19. I am 27 now. I was given a $300 limit until I was about 24 when they raised it to $500, in January they upped it to $1000 where it is today. I have 3 CC’s with limits in the $100,000-175,000 range. 3 cards with bofa all above $20,000 and a few that are a little under $10,000. I couldn’t get any credit cards over $2000 until I paid off my car. After that I did an app-o-rama and got 6 out of 8 credit cards that I applied for.

    This guy seems responsible enough and is looking for some buying power with his credit, but the problem is he has no credit record.

    Alot of you who are actually responsible with their money who refuse to use credit cards will almost always end up with the short end of the stick when they decide to buy a home or something. Credit score itself is not everyting. Credit history is everything. I charge everything I can and always hold a balance on a few cards, not HUGE balances, but enough to be using it but not more than I can afford to pay off in a few months. There are way too many great rewards and offers that credit card companies give to people, yet many responsible people who can actually benefit a great deal hate credit cards.

    Go figure

  62. potskie says:

    Hmm that bites here in canada i got a 5000 limit on my CC when i was 19. mind you it was a month after i was approved for a Goverment held student loan (OSAP).

  63. eligiblebachelor says:

    I’m also 20 and this just happened to me. I was with a Credit union for over 10 years and I have had direct deposit for 4 years and a checking account since I was 16. Never bounced a check, have a ridiculous amount of money in the account. I asked to sign up for a credit card because I needed one for a business trip to Denmark for an employer where I have worked for 4 years. Everyone I had ever talked to said that credit unions will just give you a card, and mine wouldn’t.

    The loan officer had this look that she didn’t care from the get go and said well I can get you a co-signer sheet. So I reluctantly got the sheet filled out and the week of my trip the lady calls me and says the co-signer form was not the Visa application, and that I would need to get 2 references that were not family members prove my income (which is a joke because I have direct deposit with them) and then the kicker. My parents who cosigned would need to get 2 references and prove their income. They have been at the branch since they were 16 and have direct deposit.

    So I left work sped across town pulled out my money market, and opened up an account with another credit union that was all to happy to get me the 4 figure credit card limit my trip required. So now I’m in the process of shutting off direct deposit closing out automatic withdrawals etc.

    What I did learn from this is that even credit unions will screw you, and that supposedly the best way to build credit is to get attached to high dollar cell phone bills which is supposed to build credit quickly.