New on here

Question

I've been reading on here that Credit Karma isn't good to look at the score, just use it for the data in the TransUnion and Equifax reports.  I was wondering though, why it said a negative factor for me was "no inquires for credit?" I haven't applied for anything for over three years.  My cards are listed below, all opened between ages 18-21.  I just turned 25.  I also have a paid off auto loan with Tower Federal Credit Union.   Would that mean my fico score would be negatively affected if I haven't applied for anything in a couple years? Sorry I'm 25 and learning what I'm supposed to do.  I'd like to be able to afford a home or townhome by the time I'm 28/29 (3-4 years). Thank you

Answer 1

jamie123 wrote:
Welcome to the forum! You have done a great job so far! If you plan on buying a house in 3 to 4 years these are my suggestions on what you can do now to improve/maximize your scores: 1. Apply for 2 more really good quality credit cards right now. Credit cards are the foundation to really high and rock solid credit scores in the future. You want to end up with 5 to 8 credit cards that you can keep open for the rest of your life. Don't ever close a credit card unless you think long and hard about it. One of the credit scoring categories is age of accounts and good scores in this category can only be achieved with time. You are young, time is on your side! 2. Shift your day to day expenses to your credit cards but ALWAYS PAY THEM OFF IN FULL EACH MONTH! Do not carry balances month to month on credit cards! 3. WHEN APPLYING FOR NEW CREDIT you need to groom your scores to achieve the highest scores you are capable of getting. You do this by having one card report a small balance of less than 10% of its credit line and all your other cards report $0. You NEED to have one card report a small balance. If all your cards report $0 your scores will actually drop for not using credit. In my case my scores drop 18 points when all my cards report $0 versus one card reporting a small balance. You have plenty of time between now and your mortgage application to work on building some really high and rock solid credit scores. If you post which credit cards you currently have along with their credit lines I can suggest which new credit cards I think you should apply for. You want to get quality credit cards from the so called "prime" banks which are: American ExpressBank of AmericaChaseCiti BankDiscoverWells Fargo Credit cards from these banks will grow with you for life. Long standing customers of these banks can expect credit lines in excess of $20K. EDIT: Oops! I saw your credit cards listed in your siggy! I would suggest you apply fot the following cards: Bank of America - Cash Rewards Card         You get cash back on your purchases Discover - Discover IT Card          You get cash back on your purchases And perhaps if you shop on Amazon... Amazon - The Amazon Store Card          You get 5% cash back on all your purchases done on Amazon Thank you for your help also!