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New to credit

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Anonymous
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New to credit

Hello all! This is my first time posting. Let me first say that this website has been very helpful, absolutely love it. I am relatively new to the world of credit and I have so many questions, probably some that have been answered before, sorry in advance if I ask something that has been answered, just drop a link in the reply. Anyway, I have a revolving Fingerhut account and it has raised my credit score close to 100 points, made a couple purchases, made payments on time, everything good. I was also added to my g/f's Jcpenny account as an authorized user recently which has always been in good standing other than one late payment right at a year ago, also, I was just approved for the Chase Freedom card, e-mail said I should receive my card in 7 to 10 days with a CL of $750. I am very excited to have gotten approved for another revolving line of credit but I have a few questions I can't seem to locate answers for, so I thought this would be the perfect place to ask. First question, does anyone know if Chase reports to the bureaus only if you maintain a balance? Can I carry a balance of zero without it affecting my credit? Second question, What is the minimum payment with the Freedom card? I can't seem to find a solid answer, does it simply vary from person to person depending on income? Third question, and this doesn't necessarily pertain to the Freedom card, but how many credit cards are to many? I have interest in applying for the Chase Slate or a Barclay card. That would put me at 3 revolving lines and 1 as an authorized user on a revolving line.

 

I also would like to know if there is anywhere online I can obtain an accurate review of my credit score. I have accounts with Credit Karma, Credit Sesame, Quizzle, Lending Tree, and Credit.com, and their all pretty close to each other, but from what I have researched they are not very accurate. 

 

Once again, I apologize if any of these questions have been answered before, like I said, just drop me link in the right direction to it. I want to say thanks in advance to anyone who can help me. Smiley Happy

Message 1 of 5
4 REPLIES 4
elim
Senior Contributor

Re: New to credit

I was also added to my g/f's Jcpenny account as an authorized user recently which has always been in good standing other than one late payment right at a year ago. I would remove myself from the tradeline as you want 0 late payments on your profile and the TL is doing more harm than good.

 

First question, does anyone know if Chase reports to the bureaus only if you maintain a balance? no, with use, they report every month and report again after you pay the account to $0

 

Can I carry a balance of zero without it affecting my credit? one card should report 1% - 9% and the others 0 for best score. this utilization scoring is dynamic and can be manipulated by you from month to month.

 

Second question, What is the minimum payment with the Freedom card? whatever the statement says (usually $25). but, I suggest paying many times the minimum (I try to make payments of $500).

 

does it simply vary from person to person depending on income? no, it varies by statement amount.

 

Third question, and this doesn't necessarily pertain to the Freedom card, but how many credit cards are to many? "too many" is more than your profile can handle. I suggest starting with what you have (maybe 1 more) and gardening them while increasing their limits for 6 months before adding more.

 

I have interest in applying for the Chase Slate or a Barclay card. That would put me at 3 revolving lines and 1 as an authorized user on a revolving line. Chase slate is a BT card and may be worthless. Barclay would be a good addition and give your profile some safety if Chase ever shuts you down for any reason.

 

I also would like to know if there is anywhere online I can obtain an accurate review of my credit score. I have accounts with Credit Karma, Credit Sesame, Quizzle, Lending Tree, and Credit.com, and their all pretty close to each other, but from what I have researched they are not very accurate. all of those scores are accurate but they are not Fico scores. you can get them here or at "credit check total" for a fee.

 

Message 2 of 5
RonM21
Valued Contributor

Re: New to credit


@elim wrote:

 

I also would like to know if there is anywhere online I can obtain an accurate review of my credit score. I have accounts with Credit Karma, Credit Sesame, Quizzle, Lending Tree, and Credit.com, and their all pretty close to each other, but from what I have researched they are not very accurate. all of those scores are accurate but they are not Fico scores. you can get them here or at "credit check total" for a fee.

 


Either of these 2 are nice because they are true scores. I use CCT myself.



Total CL: $321.7kUTL: 2%AAoA: 7.0yrsBaddies: 0Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping

BoA-55k | NFCU-45k | AMEX-42k | DISC-40.6k | PENFED-38.4k | LOWES-35k | ALLIANT-25k | CITI-15.7k | BARCLAYS-15k | CHASE-10k

Message 3 of 5
Kevin86475391
Frequent Contributor

Re: New to credit

Hi and welcome to the forum!

First off, congrats on your Freedom approval and on taking the plunge into the world of credit.

 


@Anonymous wrote:

I was also added to my g/f's Jcpenny account as an authorized user recently which has always been in good standing other than one late payment right at a year ago

 

I agree that you may want to be removed as an AU from this account at some point. It may not seem like a big deal, but unfortunately 1 late payment can ding you, especially as you establish credit for yourself without any late payments. Late payments stay on a credit report for 7 years. So it's really important not to be late. The reality is that your girlfriend's credit score won't fully rebound for another 6 years at this point! Bottom line, always make paying at least the minimum payment every month a top priority in order to maintain a good score.

 


@Anonymous wrote:
I was just approved for the Chase Freedom card, e-mail said I should receive my card in 7 to 10 days with a CL of $750. I am very excited to have gotten approved for another revolving line of credit but I have a few questions I can't seem to locate answers for, so I thought this would be the perfect place to ask. First question, does anyone know if Chase reports to the bureaus only if you maintain a balance? Can I carry a balance of zero without it affecting my credit? Second question, What is the minimum payment with the Freedom card? I can't seem to find a solid answer, does it simply vary from person to person depending on income?

 

Chase will report as long as the card is active and will simply report a $0 balance. You'll want to occasionally allow at least a small balance to report to the card to show that it is active. However, please note that this DOES NOT mean you will ever need to pay interest to do so. That's a common misconception but actually you can allow a balance to report, pay that balance in full before the next due date, and not pay anything in interest since you'll still be within your grace period. You may choose to revolve a balance and pay interest, but it's never necessary to build/maintain a good credit score and won't help you.

 

Regarding the minimum payment, it isn't based on income; it's based on the balance on the account. I believe it's a percentage of the balance, and for some reason 2% is sticking in my head, but I may be completely wrong. The caveat is that there's usually a $25 minimum. So for example if your balance is $300, 2% would only be $6, but they'll still charge you a minimum of least $25. In fact since your full limit is $750 and 2% of $750 is only $15, then I believe even if your account were maxed out you'd still only be charged a $25 minimum. However I very well may be wrong about 2% being the percent figure. I am pretty sure, however, that $25 will be the minimum (unless your balance is less than $25 of course). This is definitely a question Chase could answer for you if you give them a call or simply inquire when you call to activate your card.

 

However, please try not to think in terms of minimum payments, especially right now when you're just getting used to credit cards. Always try to treat the card just like a debit card. Expect to pay the balance in full every month and don't swipe unless you already have enough money to pay it off. This will save you a great deal of money in interest and fees in the long run AND be better for your credit score.


@Anonymous wrote:
Third question, and this doesn't necessarily pertain to the Freedom card, but how many credit cards are to many? I have interest in applying for the Chase Slate or a Barclay card. That would put me at 3 revolving lines and 1 as an authorized user on a revolving line.

 


 

It definitely is a matter of how many your credit profile can support - just starting out you won't want to add too many too fast. Take it slow - but it's also fundamentally a question of how many you want and can responsibly manage. Some people have 1 or 2 cards, others have 20 or more. Personally I have 7 and indeed while I may open or close accounts generally tend to keep about 5-10 active cards. That's just my number. You may want more or fewer.

 

Regardless I don't recommend opening a bunch at one time and my personal rule of thumb is to not open more than 1 new card ever 1-2 years, but I think 1 new card about ever 6 months is okay too. I wouldn't personally recommend doing more than that, but some people do. Since you're just staring out, however, I definitely strongly recommend not going too fast and not add a bunch at once. If in about 6-12 months you want the Slate or Barclay then go for it, but I'd just go for one, not both. Wait another 6-12 months after that to get the other.

 

Also, it is indeed true that the Slate is primarily a balance transfer card. If you don't have a balance you need to transfer, which it sounds like you don't, I wouldn't recommend that card. The only other value it offers is a free Fico credit score, which is nice, but there are other cards that will do that and offer more benefit - the Discover It or Citi Double Cash for example.

 

Anyway good luck and let us know if you have other questions!

Message 4 of 5
takeshi74
Senior Contributor

Re: New to credit


@Anonymous wrote:

I was also added to my g/f's Jcpenny account as an authorized user recently which has always been in good standing other than one late payment right at a year ago


+1 to the comments about removing yourself. Accounts where one is an AU are not always considered but when they are they basically factor in like any other tradeline. Given that Payment History is the biggest factor:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

...and that derogs like lates can kill Payment History you don't want to be an AU on an account with issues like that. Being an AU is not inherently beneficial. It all depends on the condition of the tradeline. You want 100% positive Payment History, low Revolving Utilization (balance[s] / limit[s] and falls under Amounts Owed) and a aged account. Derogs, high Revolving Utilization and new accounts are generally not beneficial.

 


@Anonymous wrote:
First question, does anyone know if Chase reports to the bureaus only if you maintain a balance?

They do not. I have accounts with 0 balances reporting.

 


@Anonymous wrote:
Can I carry a balance of zero without it affecting my credit?

If the balance is 0 you're not carrying a balance. You carry a balance if you do not pay a statement balance in full and a portion of the statement balance remains into the next cycle -- i.e. carried from one cycle to the next.  Scoring impact of balance is mostly about the impact to Revolving Utilization though number of reporting balances also plays a part.

 

General advice is do not exceed 30% Revolving Utilization though that is far from ideal.  Generally speaking, the lower the better.  Ideal is well under 10%.  From a number of balances perspective, fewer is generally better.  If you want to eke out as many points as possible when applying for new credit, requesting CLI's etc then allow only one balance to report at under 10%.  Both your individual and overall Revolving Utilization matter.

 


@Anonymous wrote:
Second question, What is the minimum payment with the Freedom card?

Your terms will indicate how minimum payments are calculated. You can also call Chase to verify.

 


@Anonymous wrote:
Third question, and this doesn't necessarily pertain to the Freedom card, but how many credit cards are to many?

It's up to you to determine that. Number of cards isn't really the important factor. Creditors will have a limit on what they're willing to extend to any given credit profile but it's not simply a matter of number of cards on its own but your entire credit profile and income that matter. Your credit will play a part in determining how many cards you can open but that limit can vary from creditor to creditor. In that specific sense, you won't find out unless you run into a denial that cites number of cards.

 

This is an extremely common topic so don't overlook the many existing discussions on number of cards as resources. I know I just replied to one last week.

 


@Anonymous wrote:

I also would like to know if there is anywhere online I can obtain an accurate review of my credit score. I have accounts with Credit Karma, Credit Sesame, Quizzle, Lending Tree, and Credit.com, and their all pretty close to each other, but from what I have researched they are not very accurate. 


As stated above, all scores are accurate.  It's your assumption that is not.  You cannot simply assume that one score is accurate and others are not. There are many scoring models used by creditors out there. You need to first determine what you're specifically looking for from a score. If you want to know what a creditor will pull for you then you need to know the model and CRA and pull that specific score. E.g. creditor uses a TU FICO 8 and you want to know what they will pull for you -- pull your TU FICO 8.

 

You cannot use a score generated by a given model to determine a score generated by another model. Do not try to use the VantageScores from Credit Karma to determine your FICO 8's or any other score other than your TU and EQ VantageScores. Your VantageScores from CK are only relevant to creditors that use them.  Vantagescores are not designed to mimic a FICO or any other scoring model.  Their accuracy is not determined by how closely they approximate another model and that also applies to most scoring models out there aside from some FAKO's -- however, again, you cannot rely on a score generated by one model to determine a score generated by another model.  Different models use different algorithms that evaluate report data differently and can have different scoring ranges.  Two models can produce numbers that are close and even the same in some cases but that is coincidental.  Keep in mind that coincidence and causality are not the same thing.  Don't assume causality based on coincidence.

 

If you're just monitoring trends with your credit you can use just about any scoring model but you need to look at broader trends and not specific data points or specific pairs of data points. However, I recommend learning to assess your reports versus just fixating on numbers for the reasons I mentioned in the prior paragraph. FICO 8 is the most commonly used scoring model but it is not used by all creditors/products. Trying to rely on a single scoring model can lead to disappointment if you run across a creditor that doesn't use the model you've been relying on.

 

This is also an extremely common topic so don't overlook existing discussions as well as the Understanding FICO Scoring subforum and its stickies.  Make sure you're always considering the speciic scoring model when referring to scores.

 


@Anonymous wrote:

Once again, I apologize if any of these questions have been answered before, like I said, just drop me link in the right direction to it. I want to say thanks in advance to anyone who can help me. Smiley Happy


I don't keep links handy and I'd also have to search to find the resources that I've mentioned.  I have to Google the link to the FICO scoring page I linked about every time I post it.  The stickies in every subforum, including this one, are useful resources with links.  I find site restricted Google searches very useful.  To search this site just add site:ficoforums.myfico.com to your keywords.  Here's an example based on one of your topics.  Play with the keywords, use the date filtering, etc.

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=how%20many%20cards%20too%20many%20site%3Aficoforums.myfico.com

Message 5 of 5
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