What's the best way to get your first CLI?

[Anonymous]

I've just been approved for a CapitalOne Journey card, the first time I've been extended credit. However, the credit limit is impractically low, only $300. Knowing I can apply for an increase in six months, what's the best thing to do before then? I was thinking of trying to get a small installment loan with my (fairly generous) credit union to increase my mix of credit, or maybe even applying for another card (with better cash back), but I wouldn't want the inquiries to affect a credit limit increase. What about utilization; do I need to keep my utilization below 10% for the greatest CLI even if I don't try to get any other credit?

[Chris679]

Use the card as much as possible and pay on time

[Exonumist]

Wait six months. Are you in the credit steps program? If so they will auto increase. If not request one after your sixth statement cuts.After you get an increase apply for one or two more cards. Discover it and Chase Freedom are both likely to be approved. No need to worry about utilazation until the month before you are going to apply. If you have to since it's such a small limit you can make multiple payments every month so you don't go over your limit. That's about all you can do. Time is the biggest thing with credit.

[Exonumist]

Also no need for an installment loan. Why pay interest on something when you don't have to? You already have one account and In time your credit will go up. My profile only has 3.5 years of history. My oldest card is Cap1 and it's been open 3 years and 1 month. 

[bada_bing]

---

@Exonumist wrote:

Also no need for an installment loan. Why pay interest on something when you don't have to? You already have one account and In time your credit will go up. My profile only has 3.5 years of history. My oldest card is Cap1 and it's been open 3 years and 1 month. 

---

If the OP wants to groom their credit report for something like a mortgage app, then getting a 

shared secured installment loan can help thicken a file and provide some points in score

boost. It isn't instant, it takes 6 months to a year for good effect and maximum effect at the end

of the loan term. It will cost about $50 over the life of the loan. Depends on individual situation

whether its worth the effort and expense. Time is the biggest factor in credit, especially young

profiles and it is useful to get the maximum benefit for the time passing.

I helped my Niece, who was new to credit, with opening a shared secured loan last fall. I deposited the

expected interest for the 4 year term ($50) and provided the initial deposit ($700). I recouped

the $700 from the loan proceeds and the loan pays itself back from the security account automatically.

Between the loan and putting her as AU on my Amex, her CR is on its way and I expect she'll be able to

get a prime card on her own by this coming summer.

[Anonymous]

Or if you're someone like me and NEED a car more than another credit card, an installment loan is very helpful.