Building Credit

What I really wanted to title this was “Building credit is a giant pain in the ass and sometimes you have to cry on the phone to get what you want.”

This terrifying finger puppet is probably what credit would look like if it had a face.

This terrifying finger puppet is probably what credit would look like if it had a face.

Now that I am like an adult or something, I have decided I need to build my credit.  While I started my interest in personal finance after doing Financial Peace University and watching Dave Ramsey‘s show, I have since concluded that while I do believe in not carrying “bad debt,” I am not going to swear off credit cards or loans for some things.  It’s necessary in our society to have and maintain credit and use it responsibly.  Would I like to be able to pay for things outright all the time?  Of course, but that’s not always an option.  Sometimes you need a more reliable car or a furnace.  The trick is to be smart about credit and loans.  Part of that is making sure credit is available when you need it, and thus comes the credit building process.

I have always had excellent credit, but not much credit history.  I started out with a few store cards and a mortgage in my previous life.  Then I got a car loan, and with the history with my previous mortgage and car loan, I was able to get a mortgage for our current house.  A few months after buying our house, the furnace went out and I applied for, and received, an American Express Blue Cash Preferred card.  I chose this card because of the sign up bonus and the cash back rewards on groceries and gas–what I primarily use the card for.  It is also interest free until 2015!  While it does have an annual fee, the sign up bonus was twice that and the cash back rewards easily cover the fee in about three months of my regular spending with it.  Half the furnace was paid by my emergency fund, and half went on the card so that I wouldn’t completely drain my emergency fund.  My one complaint with having an American Express card is that it’s not accepted everywhere because of their high merchant fees.  I can’t depend on this one card in my wallet if I happen to have some sort of emergency while I’m building my emergency fund back up.

I had thought a lot about getting a Visa or Mastercard credit card so that I would continue to build credit and have something more widely accepted in case of an emergency.  I knew, though, that I wouldn’t be approved for a new card until the furnace was paid off because my credit utilization percentage was high and was knocking my credit score down.  Once the furnace was paid off (Wooooo!), I decided it was time to find another card.  I read up on the best cards on sites like Nerdwallet, and picked the Chase Freedom card as the next card in my credit arsenal.  It has a great sign up bonus, good rewards (not as good as my Amex card, but still pretty ok), and has a cash back option.  It also has no annual fee, no interest for a year, and is generally available to people with limited credit history.  So I applied online.

Rookie mistake #1: I failed to realize that it takes American Express about a decade to report to the credit bureaus so it still showed I was carrying a high balance in relation to my credit limit.

Instead of getting the “congrats, we’re sending your new card” message I was expecting, I got the dreaded “your application needs further review because we’re too polite to just say you got denied” message.

Another ding to my credit score as a hard inquiry on my credit report and nothing to show for it.  But as it turns out, according to my good friend Google, many people have had success calling credit card application reconsideration numbers and talking to a real human.  I called the Chase reconsideration line, followed all the tips, and tried to charm a lovely girl who confirmed that she was denying me also.  But she did say that American Express tends to be late in reporting and I should call back in a week or so because they keep my application open for 30 days.  I tried to explain my situation and that it was all paid off.  Then she quizzed me on why I no longer use my Maurice’s card or my Victoria’s Secret card.  Because I’m not 17 anymore and I’m all good on undergarments, thanks.  (Pro tip: Never mention you only got the card for the discount back when no one thought about those things and then never used it again.)

Rookie mistake #2: calling back too soon, but not soon enough.

I read forums about other people’s experiences with Chase reconsideration, practiced my plea, called back after about a week, and talked to another lovely customer service agent who once again denied me because of my lack of history with credit cards and a high utilization rate on the one I do have because Amex STILL hadn’t reported updated info to the credit bureaus.  I explained my situation once again, and emphasized that I already have an auto loan with Chase that I am paying back ahead of schedule so I was already deemed creditworthy by them once.  The lovely customer service agent told me that that did not matter because they only look at actual credit card history.

THIS IS WHY BUILDING CREDIT IS A GIANT PAIN IN THE ASS.  You can buy a car and a house, but we don’t think you’re responsible enough for a card.

Because I had called back before Amex had reported, but after their last credit inquiry had expired, I had another hard pull on my credit.  Goodbye, halfway decent credit score.

I used Credit Karma to then monitor my credit report to see when Amex finally reported.  And my new credit utilization ratio came through at the beginning of the month!  Hurray!  I celebrated by pulling my credit reports from Transunion and Experian to verify that they both reflected the change as well.  Then this week I got brave and called back.

Rookie mistake #3: thinking there is anything logical about how credit card companies work or that they have access to up-to-date information in the digital age.

I talked to a third customer service agent who confirmed that she would have to pull my credit report again (that’s three hard inquiries that will be dinging my credit score).  That’s ok!  I checked and it should be all good now!  WRONG.  Their systems evidently need an ADDITIONAL 15 DAYS to get access to updated reports because they are on the slow boat from Transunion headquarters and then they depend on a really unenthusiastic cat to type the report into their computers whenever he gets around to it.

It looks a little something like this.

So what did I do?  That’s right, I cried on the phone.

Pro tip: If you EVER cry on the phone with a customer service agent make sure to say, “I know this isn’t your fault and you’ve been really helpful.”  This will get you everywhere.

I said the magic phrase, explained the entire saga, as well as how I have a loan with Chase and I am just trying to build my credit with a company I already trust (remember, you have to charm them), and she responded with, “I know this is frustrating.  Let me see what I can do.”

Less than 30 seconds later, she gets back on the phone and says, “Congratulations!  I was able to approve your application and you’ll receive your card in two weeks.”

Holy hot damn!  Not only was I approved, but I was approved for a higher limit than I ever expected.  I told her that she just made my week, thanked her profusely, and hung up so I could celebrate with some awkward dancing and arm flailing.

Pro tip: PERSISTENCE.  Bother them enough and you’ll get what you want, or something like that.

If you aren’t using Credit Karma, sign up now.  It is a free and secure way to access and monitor your credit report and score.  It also has a credit score simulator so you can see how certain decisions (both positive and negative) will affect your score.  My score at the end of this whole debacle is projected to be a 718, which is respectable.  I won’t need to apply for any more credit anytime soon and I’ll have the tools in my wallet to build my credit, so it will only go up from there!

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