I am curious if adding another credit card or purchasing a car with a car loan would harm my credit or help it (at least in the long run). I currently have one credit card for the purpose of establishing a credit history. It is my first card and it is only about a month old. I also have a secured loan taken out purely for the purpose of establishing credit history as well. Now, I was able to get a pre-approved Buckles store card sent to me (via the shopping cart trick! Thanks to all on myfico who shared the pre-approval trick with me.) It just arrived in the mail, BUT..a few days ago I went onto CreditKarma.com and used their score simulator. Acording to their simulator, taking out a store credit card would actually LOWER my score! So would taking out a car loan. My credit card also has a score simulation service, so I double checked on that one as well. Sure enough, the recomendation from both simulators was to just hang onto my one and only card and make payments on it for 2 years. After two years, my score should rise into the 700's. But nothing, according to the simulators, would cause the score to rise before two years. I do not understand why that would be, so I am hoping someone here can give me an opinion on the matter. All in all, I have a lack of credit history and no loan or credit card debt. My store card arrived...would it be unwise to activate it? Or would it create another line of helpful credit? (I plan to purchase a $10 accessory from Buckles once a month just so I can make a payment on the card. I have no intention of actually using the credit line in a non-pragmatic way. I only want to use this card if it would boost my score) Also, my car is a piece of junk and I'd like to get a new one the next time my current one requires another increadibly expensive repair, if my score allows for a decent interest rate. But would an auto loan really harm my credit?
These are my current credit scores (Experian has an error in the process of being disputed by the way): I don't have much in the way of bad marks against me, just a lack of credit history.
Experian 582 Exquifax 669 TransUnion 635
Starting Score: 630
Thank you Jamie123 for explaining how this works! I have a Visa Capital One Journey Card and, about my Buckle card, I did NOT apply for the Buckle card. It was offered to me by the website (as per the advice on this wonderful message board.) I am pretty sure it did a soft hit (not a hard one) because I never authorized a credit check. They did send the card to me in the mail though and I just have not yet activated it because I wasn't sure if it would do more harm than good. Is it the initial credit check that causes a credit decline, or the activation of the card? I got the card by following what some members here call the "shopping cart trick." I went to Buckle.com, put an item into my cart, filled out most of the ordering information, and then abruptly left the purchase page before giving payment. Upon returning to the page, a popup offering me a pre-approved store credit card appeared. No social security number was ever given. So..do you think it is safe to activate?
Yes, I think it is safe to activate. Believe me, they know who you are. How many Mshellt's live at your address with your birthdate? They did ask for your birthday didn't they? They don't really need your S.S. number. Let's get this straight from here on out though. You want to get credit for a reason and not just because someone offered it to you! You need to formulate a long term plan and stick with it. Your first two cards, the Cap1 and the Buckle card are okay quality wise but you really should app for a Walmart card. The Walmart card, believe it or not, is the perfect card for a person in your position. They might start you out with a really low credit line but they are very generous with CLIs. That is an important part of the history you need to be building. Down the road, when you are applying for a better credit card, the lender will try and match the highest CL that you currently have if they can. Your Cap1 and Buckle card's CLs will probably be close to where they are now, but Walmart can be extemely generous at times. Besides, you want a credit card that you can actually use to buy something useful or use in an emergency. You can buy food at Walmart if you are hungery or a new car battery if you need one. What good is a Buckle card in an emergency? You want 3 credit cards and then you can sit back and garden them for 6 months before you make your next credit move. Any other questions? What do you think about apping for a Walmart card now?
Ok..I'm gardening now! lol 
I just applied and a Walmart card should arrive in 7-10 days! Thank you again for taking the time to provide explanations and advice. The concept of even using a credit card is basically foreign to me. I keep feeling afraid that I'll do something irrepairably "wrong." One more question: If I am ever in an emergency where I really do need to use the credit on one of these cards and can only pay the minimum due at the end of the month instead of the entire amount, would that be harmful to my credit score? Or would it just increase my debt without damaging my credit-reputation so to speak?
@Mshellt wrote:Yes, I think it is safe to activate. Believe me, they know who you are. How many Mshellt's live at your address with your birthdate? They did ask for your birthday didn't they? They don't really need your S.S. number. Let's get this straight from here on out though. You want to get credit for a reason and not just because someone offered it to you! You need to formulate a long term plan and stick with it. Your first two cards, the Cap1 and the Buckle card are okay quality wise but you really should app for a Walmart card. The Walmart card, believe it or not, is the perfect card for a person in your position. They might start you out with a really low credit line but they are very generous with CLIs. That is an important part of the history you need to be building. Down the road, when you are applying for a better credit card, the lender will try and match the highest CL that you currently have if they can. Your Cap1 and Buckle card's CLs will probably be close to where they are now, but Walmart can be extemely generous at times. Besides, you want a credit card that you can actually use to buy something useful or use in an emergency. You can buy food at Walmart if you are hungery or a new car battery if you need one. What good is a Buckle card in an emergency? You want 3 credit cards and then you can sit back and garden them for 6 months before you make your next credit move. Any other questions? What do you think about apping for a Walmart card now?Ok..I'm gardening now! lol
You can pay only the minimum amount due each month and it won't affect your credit at all long term. Utilization has no memory so as soon as you get the balance paid back down your scores will rise. Do not make a habit of not paying in full! Some people's definition of "emergency" is rather liberal and they end up living above their means. I know that would never happen to you because you already have a Credit Union savings account where you stash a few bucks from every paycheck for those emergencies we are talking about. Am I right?
Pay in full every month if at all possible! Pay at least 3 days before the due date in case something should happen with the payment!
You actually want the Walmart card to report a small balance every month and your other cards to report a zero balance to get your optimal scores. This means you need to pay your Walmart card twice a month perhaps.
And hey...Congrats on the Walmart card! You will get a free TU FICO 08 score every month after you sign up for electronic billing. Do some research on how to get a CLI every 4 months from Walmart on this site.
What was the credit line that Walmart gave you?
You can pay only the minimum amount due each month and it won't affect your credit at all long term. Utilization has no memory so as soon as you get the balance paid back down your scores will rise. Do not make a habit of not paying in full! Some people's definition of "emergency" is rather liberal and they end up living above their means. I know that would never happen to you because you already have a Credit Union savings account where you stash a few bucks from every paycheck for those emergencies we are talking about. Am I right?
Lol I won't be abusing the cards. I'm fine with buying my groceries with my debit card and using the credit card to purchase a single item like a candy bar or mop or something, and then paying that off immediately online as soon as the balance displays.Say, that's another thing--Does there need to be a substantial balance? For instance, is it enough to just purchase a couple of dollars worth of snacks or something every month just so something reports? Or are they more apt to raise my credit limit if I spend more (but under 30%) per month?
You actually want the Walmart card to report a small balance every month and your other cards to report a zero balance to get your optimal scores. This means you need to pay your Walmart card twice a month perhaps.
How does paying twice a month cause Walmart to report a balance? If the Walmart account is paid off in full twice a month, then wouldn't that be a zero balance?
And hey...Congrats on the Walmart card! You will get a free TU FICO 08 score every month after you sign up for electronic billing. Do some research on how to get a CLI every 4 months from Walmart on this site. What was the credit line that Walmart gave you?
Thanks! It was only a 250.00 credit line(I think it was 300 on the Buckles as well as the Visa Journey). Hmm. If TU is TransUnion, what's FICO 08? (I'm still learning the FICO lingo Sorry for all these questions! You are greatly helping me learn the credit building ropes though.
Great advice and I am noticing this exact thing with my own score that it's going to be an up-down ride while I am building credit. Almost like a stock, going up, ticking down, reaching new highs, ticking down, reaching new highs, etc. periods of going sideways until new gains are made, etc.
Example: My score was 571 when I joined, I needed to get some cards as I have no revolving accounts(never owned a CC my whole life, 29yrs old now), I got a little app crazy so my score dropped to 564, then took another leg down to 558, then my student loan reported a few days ago and it went up to 562 which is where I currently stand.
I am sure my score is going to nosedive temporarily once my cards are recived and start reporting for the first time, but over 6 months I should reach record highs for my own personal credit history and so I am okay with the short term dips.
@Mshellt wrote:You can pay only the minimum amount due each month and it won't affect your credit at all long term. Utilization has no memory so as soon as you get the balance paid back down your scores will rise. Do not make a habit of not paying in full! Some people's definition of "emergency" is rather liberal and they end up living above their means. I know that would never happen to you because you already have a Credit Union savings account where you stash a few bucks from every paycheck for those emergencies we are talking about. Am I right?Lol I won't be abusing the cards. I'm fine with buying my groceries with my debit card and using the credit card to purchase a single item like a candy bar or mop or something, and then paying that off immediately online as soon as the balance displays.Say, that's another thing--Does there need to be a substantial balance? For instance, is it enough to just purchase a couple of dollars worth of snacks or something every month just so something reports? Or are they more apt to raise my credit limit if I spend more (but under 30%) per month?
You actually want the Walmart card to report a small balance every month and your other cards to report a zero balance to get your optimal scores. This means you need to pay your Walmart card twice a month perhaps.How does paying twice a month cause Walmart to report a balance? If the Walmart account is paid off in full twice a month, then wouldn't that be a zero balance?
And hey...Congrats on the Walmart card! You will get a free TU FICO 08 score every month after you sign up for electronic billing. Do some research on how to get a CLI every 4 months from Walmart on this site. What was the credit line that Walmart gave you?Thanks! It was only a 250.00 credit line(I think it was 300 on the Buckles as well as the Visa Journey). Hmm. If TU is TransUnion, what's FICO 08? (I'm still learning the FICO lingo
Okay, now you need to learn how to use credit to your advantage and buying candy bars isn't really on the list!
Listen up...This is important.
When you plan on applying for new credit in the NEXT month you need to groom your scores which means you want the reporting balances on your credit cards to look like this:
Walmart = $25 or less than 10% of this card's credit line.
All other cards = $0
YOU ONLY NEED TO DO THIS IF YOU WANT TO SEE HOW HIGH YOU CAN GET YOUR SCORES OR ARE PLANNING ON APPLYING FOR NEW CREDIT! This will get your scores as high as possible. Otherwise, you want to gently use your cards each month allowing all your cards to report a balance. Since all your credit lines are pretty low I would suggest staying under $125 reporting balance for any of the cards.
You need to sacrifice your scores for reported usage history in the months that you are not planning on applying for new credit. The month before you are planning on applying for new credit, groom your scores.
Okay...more important stuff!
How do I do this you ask?
You need to understand a few things about credit card billing and reporting practices.
1. The due date is when your payment is due.
2. The statement date is the day a new monthly statement is generated and your statement balance is USUALLY the balance that is reported to the CRAs. Your statement date is USUALLY 3 to 5 days after your due date.
So, this is how it works:
At least 3 days before the due date, pay the credit card down to the amount you want to see reported. You then CANNOT use that credit card until the statement date which is about 3 to 5 days after the due date. If you use the card they might report the higher current balance. Once the statement is generated and reported you can go back and pay the balance to zero.
Get used to using your cards for everyday purchases and paying them in full each month. Buy groceries, gas and candy bars. You want to demonstrate to the credit card companies that you can use credit responsibly and they will reward you with CLIs. Walmart REALLY likes to see a small balance report each month.
Sorry I am still new to credit cards but wouldn't we get lates on our report by not paying until after the due date?