New Credit holder. Suggestions and guidance?

[Anonymous]

I am 20 years old, and opened up my first line of credit (capital one credit card) 8 months ago, in april of 07.


I keep a close eye on my credit reports, and score. I have no late payments.

I have a fairly low credit score (630 avg) and I am wondering how to make sure I am in a place to build good credit.

Part of the low-ish score is due to the fact that I had a tight spot this holiday season (Don't we all?) and I used 90% of my available credit. I Plan to have that balance paid off in the next 3 to 4 months. After that I know my score will climb just a bit.

I also have 3 inquiries from the past year. One from when I was looking to get financed for a car (I decided against the loan, and purchased through a private sale using cash). The other two were from when I was trying to build credit by getting a card. I was denied by Best Buy and Wal-mart, for what I'm guessing was my non-existent credit history at the time.

My questions at this point are as follows:

I know only having one line of credit which is also a juvenile account is doing my score harm at this point in time.

1) how long does a line of credit appear as a "Juvenile" account?

2) I am considering apply for another line of credit. From what I have been reading 1 is not really enough. I know this will lower my score for a bit, but is it worth the payoff when both accounts are "mature" and in good standing?

3) What is a healthy number of credit lines? I have no mortgage, and no loans; I do not plan to apply for either within the next 5 years. How many revolving credit cards should I have? is 2 a good number, or should I apply for a 3rd?
- When I am approved for another line of credit I plan to use, and hold 15-20% of that credit line on the balance, and make the minimum payments. Do I even need to do that? Will an unused line of credit reflect negatively on my score?

4) this is related to question 3. What types of credit should I apply for while trying to build an early credit history? Department store cards? or Major credit cards (Ie capital One, American Express, etc..)


Any help would be greatly appreciated.

My goal is to build a strong foundation for good credit to grow on. All in the hopes of buying a home or property in the next 5-10 years.

[WhirledPeasPlease]

Wow I'm jealous.  I wish I would have been that concerned at your age.  When I was 21 I had 17 cc's and 3 other lines of credit  -- all while making about 10k a year!

I'm still learning the game at age 35, but IMO the only reason to have dept cards is to take advantage of the % off deals they offer when you open (if you can 'take' the inq hit) or to build points to redeem for discounts later (Victoria's Secret, Target, Old Navy, etc).  PIF every month if you open these - it is absurd to carry balances on those because of the high interest rates.

Peas

[TryingVeryHard]

I am jealous too. At the age of 20, I had 2 delinquent accounts already.

[SanFranMatt]

If you want to apply for a new card (which I think is a good idea), then you're better off waiting a few months. If you pay down your current card over the next 3 months, then in April your score should be higher so you'll have more options for good cards to apply for, and will start off with a better Credit Limit.

[Anonymous]

well, I'm became concerned with my credit accidentally.

After the accidental discovery I realized how important it will be in the future.

I was trying to get a cellphone at the time, and they told me I had no credit. So I was offered extremely absurd phone plans. So I got a "Pre-approved" capital one letter, and signed up.

I've been watching closely ever since

[MidnightVoice]

Good on yer mate.  Keep it up and you will be golden in a few years, when you actually start to need things like mortgages!