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Established Member
Dunadan
Posts: 19
Registered: ‎12-10-2009
0

Got the card, aiming for the credit.

In starting, i'd like to thank everyone who helped me out in my last post (joys of hunting for a credit card...).

 

Since then, i've joined and opened a savings account at a local Credit Union (Mazuma Credit Union in Missouri) as well as recieved a "New borrowers Visa card."  I'm pretty stoked because though my starting credit line is quite low (300), the card is unsecured!  I didn't think i'd find one due to my lack of credit history.  I have also become an AU on my mom's Citi card.

 

So if anyone's got any hints as to what is a proven method of building credit, please fill me i!  I've heard regular purchases like gas and such are a good way to go, of course also things like a car loan...  Any more suggestions?

 

Thanks guys, and keep enjoying the holidiays!

 

-Jordan

Super Contributor
marty56
Posts: 5,696
Registered: ‎10-06-2007
0

Re: Got the card, aiming for the credit.

I would just add PIF, dont apply for credit very often snd your good to go.  Never ever pay late, never.

 

Remember it takes time to build a good credit history.  I would also stay away from quick fixes like being an AU on someone else's CC and asking for CLIs just to have a higher CL.  Give it six months to a year of good use and you will be happy with the results.

11/28/2014 FICO: EQ: 796 EX:788 TU:803
Valued Contributor
nothingman02
Posts: 1,072
Registered: ‎02-15-2009
0

Re: Got the card, aiming for the credit.

+1

 

OP, what are your scores. Best thing to do right now is to build payment history. You could app for a good card at one years time and you should get a good prime card. You could, based your profile, app for an appropriate one at 6 months time too, preferable a store card. But thats that. Concentrate on building a payment history.GL.

Established Contributor
okstatefan5945
Posts: 517
Registered: ‎04-13-2009
0

Re: Got the card, aiming for the credit.

I dont recall the previous post so if this was in it forgive me but do you have an installment loan? Either mortgage, auto loan, student loans, anything of that sort? If not adding one will help your credit score because FICO likes a credit mix. If you dont have an installment loan I would wait until the 6 month mark of having that card and being a member of the credit union and then apply through them for a personal installment loan. Even if you dont need money borrow like $500 and put it in savings and take the money out each month to make the payment. This shouldnt cost much because creidit unions usually have low interest rates on their loans. Take that and the money it will make sitting in savings and it shouldnt be much. Just make sure it is paid in full and on time of course and that will give you an instant boost adding the account even with it being a new account with inquiry you will see an instant net on points and as the account and inquiry age and you build payment history your score will continue to climb. Good Luck on it.
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2011 Credit Goals
1. No Lates
2. Join the 700 club
3. No inquiries
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Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: Got the card, aiming for the credit.

Congrats on qualifying for an unsecured card! That's great to skip that step.

As for advice, mine would be to treat it as if it were a debit card. Always have more than your current credit limit in easily accessible form (savings, second checking account, etc.) Don't put anything on the CC that you can't immediately turn around and PIF, if something came up. But do use it, a lot, if you are disciplined enough to stay on top of it. Don't carry a balance from one month to the next! Pay your balance off every month, either before or after the statement drops (that's just a FICO score deal, not something the CU cares about.)

I would only use it for things that you already have to buy using cash, check or debit card --gas, groceries, recurring bills like cell phone, internet, etc. Brisk usage of the card plus prompt repayment should make your CU happy. With a $300 limit, you may well find that you'll be paying it off twice a month --for instance, if you have high gasoline or grocery bills.

Use the CC as a tool that works for you, earning rewards, building a good credit history, etc., not as a crutch to help you get stuff that you really can't afford right now. It's that crutch thing that gets people in credit trouble, and fast.

Good luck!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Established Member
Dunadan
Posts: 19
Registered: ‎12-10-2009
0

Re: Got the card, aiming for the credit.

Hey all,

thanks for the responses, sorry for my tardiness, i've been "away" for the Holidays.

 

Marty56, 100% agree with your tips, instead of going for the quick fixes, it's going to be smarter to use the CC for consistent payments, like gas.

 

nothingman02, whats so good about store cards, that's had me confused for a while.  Is it just that they are considerably more easy to use?

 

Okstatefan5945, is it worth it to make the installment loan, the rep i was talking to at the CU didn't talk about it as much as i would have liked.  to me it's frustrating that you end up losing money even if a very nominal amount.  It's surely worth it if it pays off, but i don't really know how well it does, any info on that?

 

haulingupthescore, haha, it's funny you said to treat it like a debit card.  That's what my dad has told me consistently.  I think it's to my (and our for everyone on myfico who cares about the valuable tool of  the credit card) advantage to understand that concept.  Having the funds to back up the purchase on the spot build credibility with banks and CU's.

 

"Use the CC as a tool that works for you, earning rewards, building a good credit history, etc., not as a crutch to help you get stuff that you really can't afford right now. It's that crutch thing that gets people in credit trouble, and fast."

 

A nugget of truth, awesome statement.

 

Thanks everyone

Established Contributor
okstatefan5945
Posts: 517
Registered: ‎04-13-2009
0

Re: Got the card, aiming for the credit.

The problem with the installment is FICO likes to see one open. So while you have the account you gain points for the mix. Once its paid off you will lose a few points because your mix isnt up to par anymore. So its a pain in the a** trying to make FICO happy. Lucky for me right now we have an auto loan so I am not worrying too much and by the time the auto loan is gone I hope to have a mortgage and that will satisfy it. I wouldnt spend alot of extra money on it especially if you will be buying a car or house later but to tweak your scores to the highest possible you have to have a installment account open as well as revolving. But for the rebuilding prupose I dont know that you need to worry about tweaking your score. Just make sure you take care of that credit card really well.
----------------------------------------------------------------------------------------------
2011 Credit Goals
1. No Lates
2. Join the 700 club
3. No inquiries
----------------------------------------------------------------------------------------------

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