topic Re: How to build credit with a new card? in Credit Cards

How to build credit with a new card?

Anonymous — Sun, 14 May 2017 23:48:11 GMT

recently was approved for my new card for 99$ with a cl of 200$. What's the best and fastest way to start building credit with this card. btw I'm new here and my first post.. all tips help

Edited for title clarity --Rev

Re: NEW CAPITOL ONE SECURED CREDIT CARD

Anonymous — Sun, 14 May 2017 15:39:01 GMT

Welcome to MyFico,

Eagles207 wrote:
recently was approved for my new card for 99$ with a cl of 200$. What's the best and fastest way to start building credit with this card. btw I'm new here and my first post.. all tips help

Don't look at it like a credit card, look at it like a Debit card.

Make a purchase, pay it off immediately.

Over the last month I have read more than three posts where individuals have a Secured card, and then post that they "missed" the Due Date for a payment, with all kinds of excuses for missing it. Don't do that.

Best Wishes!!!!

Re: NEW CAPITOL ONE SECURED CREDIT CARD

Aduke1122 — Sun, 14 May 2017 19:24:31 GMT

Exactly I totally agree with Sebastian , only throw a small charge on the card like a tank of gas or Netflix monthly payment and when it post pay it off , you ideally want to leave a balance of less than 9% on just one of your credit cards to maximize your fico scores . Also to achieve the best Credit mix you need 3 revolving credit card accts open and one installment loan open on your reports . Just be responsible with it and remember not to charge anything you don't have money in the bank to cover

Re: NEW CAPITOL ONE SECURED CREDIT CARD

thummel — Sun, 14 May 2017 19:27:35 GMT

Just use it and pay it in full basically and only let a small balance report. That's really all there is to it.

Re: NEW CAPITOL ONE SECURED CREDIT CARD

Anonymous — Sun, 14 May 2017 23:39:20 GMT

Let 9% of your CL report, then pif. Get 3 total ccs and keep utilization at 9% on one and leave the other two unused for the most part.

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 01:05:49 GMT

1. Link the cc with a subscription. (Netflix, Hulu, Amazon, My Fico, etc)
2. Set up automatic payments With the card and your bank.
3. Enable text/push/email alerts or notifications with the cc. (Payments/Transactions)
4. Place cc in SD.

Consider adding additional TL if this is your only card. Three cc and one installment is optimal for your score. If you need an installment loan reporting you should look into a shared loan; this is also sometimes referred to as a credit builder loan.

Re: How to build credit with a new card?

HeavenOhio — Mon, 15 May 2017 03:22:16 GMT

@Anonymous wrote:
recently was approved for my new card for 99$ with a cl of 200$. What's the best and fastest way to start building credit with this card. btw I'm new here and my first post.. all tips help

Which bank is this card with? If it's with a "good" bank, I wouldn't hesitate to suggest that you give the card a good workout as long as the balance ultimately reported to the credit bureau is kept at 8.9% or below. If it's with one of the more predatory banks, I'd use it for only a small charge or two per month.

Re: How to build credit with a new card?

Uncle_Money — Mon, 15 May 2017 03:55:40 GMT

The rules are quite simple. Follow Uncle Money's "5 NEVER rules" to build a solid credit history:

Never ever be late on making a payment. Never. Did I mention never be late? This is the most important part of the scoring model, which is your payment history, it actually accounts for 35% of your score.

Never max your card out.

Never go too close to your credit limit. But since you limit is only $200, it may be difficult to only charge $20 at a time and pay it off.

Never submit a payment that will not clear. This is obviously frowned upon and some banks will penalize you for it by raising your APR, flagging your account, adding fees, etc. Avoid this at all costs.

Never go for extended periods of time without using your credit card. In order to build credit history, one must use their credit. Just it responsibly by following the rules above.

And there you have it!

Uncle Money

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 09:35:07 GMT

@Anonymous wrote:
1. Link the cc with a subscription. (Netflix, Hulu, Amazon, My Fico, etc)
2. Set up automatic payments With the card and your bank.
3. Enable text/push/email alerts or notifications with the cc. (Payments/Transactions)
4. Place cc in SD.

Consider adding additional TL if this is your only card. Three cc and one installment is optimal for your score. If you need an installment loan reporting you should look into a shared loan; this is also sometimes referred to as a credit builder loan.

#2 is such a nice feature that every card has now. My first foray into the CC world was in college in the late '90's. Dealing with mailed statements and having to write checks to pay, it didn't go well (more importantly, of course, I was a stupid kid).

Autopay and the general ease of keeping up with accounts online are such nice things to have these days.

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 10:53:08 GMT

My advice is to be careful not only with this card but with applying for credit in general. Many people make the mistake of loading up on a bunch of low limit credit cards and store cards when they start, this hurts the average age of accounts, mutlple new accounts are not a good thing and because the limits are low the cards are not terrible useful. The advice above is excellent, use the card lightly and make sure you pay it in full each month or allow a very small balance (under 9%) to report. One credit card isn't going to build a solid credit history but it sure can mess it up if you are late, go over the limit or maintain high utlization. I would suggest joining a good credit union or two like Alliant, NFCU, Penfed or a local credit union. Build a relationship with them and they will likely give you a credit card that will have better terms and no annual fees. To help with your credit Alliant offers a share secured loan that would give you an installment history, basically you deposit 500 bucks, take a loan out using that 500 as security and pay off the vast majority of that loan back in payment 1 or 2, you end up paying no interest but and it doesn't cost you anything really but it gives you a nice boost to your credit score and profile making future credit much easier and lower interest. I would plan on getting 3 total credit cards over the first year and that installment loan and leave it at that for a while. Slow and steady wins this race. Life will happen so be cautious because lates and collections stick with you for 7 years which is a steep penalty.

Best of luck and welcome to Myfico, you made a great first step coming here. The more you read the more prepared you will be for success.

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 17:47:42 GMT

thank s everyone

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 17:48:24 GMT

it is with capitol one

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 17:55:03 GMT

what does leave a balance of less then 9% mean? use less then 9% of the card or say I use 40$ too only pay 31$?

Re: How to build credit with a new card?

Aduke1122 — Mon, 15 May 2017 18:14:23 GMT

You can use as much as you like , pay in full by the due date and then bf your statement cuts make a very small charge of less than 9% of your CL . Learn your due dates and statement dates well , almost all of my credit cards report whatever balance I have when the statement cuts for the mth

Re: How to build credit with a new card?

Anonymous — Mon, 15 May 2017 18:18:37 GMT

gotcha thanks

Re: How to build credit with a new card?

HeavenOhio — Mon, 15 May 2017 18:36:28 GMT

@Anonymous wrote:
it is with capitol one

Capital One falls into the "good" bank category. I wouldn't be afraid to use the card a lot as long as you keep paying as you go along in order to stay away from your limit.

Do as Aduke1122 suggests. Make payments throughout the month as needed. When it's time for the statement to cut, bring your balance down to 8.9% of the limit or lower. Statement cut time shoud be the only time you might want to give your card a rest. That way, you avoid having pending charges sneaking through.

Re: How to build credit with a new card?

HeavenOhio — Mon, 15 May 2017 18:43:18 GMT

I forgot to mention this. Avoid statement balances that are zero. That'll cause a score ding. Leave a balance of at least $5 (but below 8,9%). Rather than bothering to bill you, some lenders forgive tiny balances and report zero to the bureaus.

Once you have more cards, zero balances on most of them — but not all of them — will be a good thing.