Question on Credit Cards

[Anonymous]

I have started my rebuilding journey to improve my fico scores.

I have been reading through the forums and taken some measures based on my findings.  Here is where I am.  I joined myfico and got my scores:

Equifax:  634, Transunion:  633 and Experian 619

I had zero credit cards, so I applied for and was approved for the following:

Capital One Secured MasterCard ($49 deposit) with CL of $200

Credit One Platinum (for rebuilding credit) with CL of $300

Aadvatange Citi Gold with CL of $3500 (Equifax pulled a 650 on my approval notice)

So, here is my big question for clarification.  Should I never use the Capital One or Credit One Card?  Just let them forever print zero on my credit report.

I should only use the Aadvantage Citi Gold card and keep my utilization rate under 10% for the best possible boost to my fico scores?  Is that right?

My second question.  Can I just maintain a balance of $250 on the Aadvtange Gold card and just keep making my minimum payments, or should I pay it off after I receive each statement?

Thanks in advance for your help and to all posters who I've read that got me this far, some of these measures were counter intuitive to what I thought would build my credit.  I am hoping to buy a home in the next couple months and any boost will help.

[Gunnar419]

Congratulations on making a good start!

Question one: You should definitely use all your credit cards, at least occasionally. You can pay them to zero before the due date to ensure that they report at zero$$, but you're showing the lenders that you're using their cards. Many lenders will close cards if they're not used for a certain time (time varies between lenders). CapOne is known for not closing cards for inactivity, but still you'll establish a more favorable history with them by using the card.

Use the CreditOne card as much or as little as you like, but also get rid of it as soon as your credit is well established and make sure you've paid off any fees they might have charged; some people miss those when they close beginner/fee cards.

Question two: Whatever else you do, don't ever get into a pattern of just making minimum payments. Always pay at least 2-4X the minimum to show that you're financially solvent. Whether to keep running a balance on the Aadvantage card of pay it off after each statement cut is up to you. Paying it off is good because it saves on interest, and MyFicoans will probably say you should do that, but at such a small amount, it's not that big a deal.

[Anonymous]

Thank you so much for your reply.  I haven't received the Credit One card yet in the mail.  I don't think there is a way out of it.  My plan is to pay the $75 annual fee when it arrives and to never use it.  Is it okay to never use the Credit One card?  I read a lot of horror stories after I applied.

[Gunnar419]

You're welcome! Don't worry too much about that CreditOne card. It WILL help you establish your credit. Keep it for now, then cancel it before the next annual payment is due, check carefully to make sure there are no fees or charges on it that you might not have noticed, and go on your merry way. It won't hurt you not to use it in the meantime.

It's very good that you got in with CapitalOne. They're not only very good for credit card newbies, but they'll be good to you in the long run, also. Have a great credit journey.

[Anonymous]

---

@Anonymous wrote:

I have started my rebuilding journey to improve my fico scores.

I have been reading through the forums and taken some measures based on my findings.  Here is where I am.  I joined myfico and got my scores:

Equifax:  634, Transunion:  633 and Experian 619

I had zero credit cards, so I applied for and was approved for the following:

Capital One Secured MasterCard ($49 deposit) with CL of $200

Credit One Platinum (for rebuilding credit) with CL of $300

Aadvatange Citi Gold with CL of $3500 (Equifax pulled a 650 on my approval notice)

So, here is my big question for clarification.  Should I never use the Capital One or Credit One Card?  Just let them forever print zero on my credit report.

I should only use the Aadvantage Citi Gold card and keep my utilization rate under 10% for the best possible boost to my fico scores?  Is that right?

My second question.  Can I just maintain a balance of $250 on the Aadvtange Gold card and just keep making my minimum payments, or should I pay it off after I receive each statement?

Thanks in advance for your help and to all posters who I've read that got me this far, some of these measures were counter intuitive to what I thought would build my credit.  I am hoping to buy a home in the next couple months and any boost will help.

---

"usage" and "balance reported" are two completely separate things. I was putting $2K of usage through my Cap One cards each month while maintaining a reported balance of under $50.

I would suggest apping for a second Cap One card as soon as the first one is six months old and kicking Predator One to the curb.

Regarding Capital One - You can call and have QS rewards added to a Platinum account. It will still be no AF, but you'll get the 1% cash back. AND you should request CLI's every month on it.