Established Contributor
Posts: 760
Registered: ‎02-11-2012
Re: BUILDING Credit advice?

One area where people make a mistake is that they believe the more they charge/pay off, the higher the score. Incorrect. When starting out, charge small amounts, like $ 25. or so and pay off each month. Department stores, like to see the "turn.", meaning how you charge and then pay off. Doing that consistently, will get you more credit line increases sooner rather than just charging every several months or so. Do not charge what you do not have the money in a savings/checking account to pay in full when your bill comes. At todays interest rates, the interest adds up fast. Ditto to waiting one year or more to open another cc account. You will then have a full year of history plus your AAOA (average age of accounts ) and account inquiries won't tank your Fico score as bad. The final note to consider, do not open too many new accounts each year. Remember, at your age, your plans may change. You may need a different car, apartment, or house. All of these items are usually hard pull inquiries which stick on your credit report for 2 year. You do not want a bunch of these when you get ready to apply for a new home mortage. The best credit scores come with time, proven payment history, and patience. Good luck!

Starting scores 01/02/2012 EQ 707(Fico) TU 733(Fico) EXP 735 (FAKO)
Updated scores 06/01/2014 EQ 797(Fico) TU 768(Fico) EXP 769 (Fico), EQ 849 (Next Gen 5/27/14 Penfed)

Remember the Three P's: Pay early in Full, Pay on Time, Patience