topic Re: Student with no credit history in Credit Cards

Student with no credit history

Anonymous — Thu, 21 Apr 2011 22:15:45 GMT

I recently turned 18, and I am new to this whole world of credit. I have researched all over about credit cards and how to manage them. But I need some help, I am new here. I applied for a couple of student credit cards (I am a freshman in college), and got rejected, the only one I got accepted for was the capital one MTV rewards card. I have no credit history. My credit limit was 300, I started using my card as soon as I got it, however I plan to pay my balance in full every month; (I am enrolled in paperless billing). I read that I should use only under 10% of my credit line. i have a couple of questions, should I use only 10% of my credit line, and how long would it take for me to establish some credit with this card, I plan on checking my credit score every month to check if capital one is reporting my credit. Also, what is the best strategy I could go with to get my credit limit increased, and should I keep this card for as long as I can, or should I cancel it once I get a better one. Sorry for all the questionsand your help is greatly appreciated. Thank you!

Re: Student with no credit history

andre181 — Thu, 21 Apr 2011 22:59:33 GMT

You can use as much of your credit limit as you want, just make sure that you pay it down to at least 10% BEFORE the statement comes out.

Do that and make sure you do not go above your credit limit, and you will be in good shape in about 6-12 months. Also, your Capital One account is probably a "credit steps" card, which means capital one will increase your credit limit after so many months (usually 5 or 7 months) of using the card, paying on time, and staying under your credit limit. If it is a credit steps card, you should get a letter explaining the program in the mail with a month or two of getting your card.

As long as this card doesn't have an annual fee, keep it for as long as possible, even after you get some bigger and better cards.

Congrats on your first card!

Re: Student with no credit history

Anonymous — Thu, 21 Apr 2011 23:18:38 GMT

@andre181 wrote:
You can use as much of your credit limit as you want, just make sure that you pay it down to at least 10% BEFORE the statement comes out.

Can you please elaborate on this. I am enrolled in paperless billing; so I can pay off my balance online anytime (not sure if this would help my credit score). Would it be fine if I pay off my whole balance when my statement comes out/my due date, or should I pay it down beforehand. Thank you

Re: Student with no credit history

trumpet-205 — Thu, 21 Apr 2011 23:23:07 GMT

Ideally, PIF before next statement period starts.

Re: Student with no credit history

Anonymous — Thu, 21 Apr 2011 23:30:12 GMT

@trumpet-205 wrote:
Ideally, PIF before next statement period starts.

that would be by the payment due date, correct?

Re: Student with no credit history

andre181 — Thu, 21 Apr 2011 23:33:58 GMT

@Anonymous wrote:

@andre181 wrote:
You can use as much of your credit limit as you want, just make sure that you pay it down to at least 10% BEFORE the statement comes out.

Can you please elaborate on this. I am enrolled in paperless billing; so I can pay off my balance online anytime (not sure if this would help my credit score). Would it be fine if I pay off my whole balance when my statement comes out/my due date, or should I pay it down beforehand. Thank you

Your account has a statement cutoff date, which is the day that Capital one will create your statement and send it to you. It is usually about 3 weeks before your payment due date.

You should try to pay your card down to below 10% two or three days before this statement cutoff date, so that the statement they send you does not have a high balance on it. The amount on each statement is the amount that capital one will report to your credit reports, so you want it to be as low as possible.

For some people, it is easier to just pay off their credit cards every week or two when they get paid. That is always an option too.

Hope that makes a little more sense!

Re: Student with no credit history

Anonymous — Thu, 21 Apr 2011 23:37:47 GMT

Your account has a statement cutoff date, which is the day that Capital one will create your statement and send it to you. It is usually about 3 weeks before your payment due date.

You should try to pay your card down to below 10% two or three days before this statement cutoff date, so that the statement they send you does not have a high balance on it. The amount on each statement is the amount that capital one will report to your credit reports, so you want it to be as low as possible.

For some people, it is easier to just pay off their credit cards every week or two when they get paid. That is always an option too.

Hope that makes a little more sense!

Sorry for all my questions, I am very new to this, and thank you for helping me. One last thing, considering the fact that I am enrolled in paperless billing, (my statement isn't mailed to me), how would I be able to find out the exact date my new statement is generated by capital one.

Re: Student with no credit history

andre181 — Thu, 21 Apr 2011 23:43:59 GMT

@Anonymous wrote:

Your account has a statement cutoff date, which is the day that Capital one will create your statement and send it to you. It is usually about 3 weeks before your payment due date.

You should try to pay your card down to below 10% two or three days before this statement cutoff date, so that the statement they send you does not have a high balance on it. The amount on each statement is the amount that capital one will report to your credit reports, so you want it to be as low as possible.

For some people, it is easier to just pay off their credit cards every week or two when they get paid. That is always an option too.

Hope that makes a little more sense!
Sorry for all my questions, I am very new to this, and thank you for helping me. One last thing, considering the fact that I am enrolled in paperless billing, (my statement isn't mailed to me), how would I be able to find out the exact date my new statement is generated by capital one.

That's ok! Learning this stuff can be tricky!

You can call Capital One and ask them what day your statement will come out, and they will tell you (and it should be the same date every month). Or you could just wait until the first statement comes out, and then you will know it will be that same day every month.

Re: Student with no credit history

Anonymous — Thu, 21 Apr 2011 23:47:54 GMT

That's ok! Learning this stuff can be tricky!

You can call Capital One and ask them what day your statement will come out, and they will tell you (and it should be the same date every month). Or you could just wait until the first statement comes out, and then you will know it will be that same day every month.

Thank you so much. so here's my plan: I will pay my balance in full every week until my statement comes out, for future months 2-3 days before the date when my statement comes out I will pay my balance in full. Is there anything else I need to know to help my credit score.

Re: Student with no credit history

Anonymous — Thu, 21 Apr 2011 23:48:01 GMT

@Anonymous wrote:
I recently turned 18, and I am new to this whole world of credit. I have researched all over about credit cards and how to manage them. But I need some help, I am new here. I applied for a couple of student credit cards (I am a freshman in college), and got rejected, the only one I got accepted for was the capital one MTV rewards card. I have no credit history. My credit limit was 300, I started using my card as soon as I got it, however I plan to pay my balance in full every month; (I am enrolled in paperless billing). I read that I should use only under 10% of my credit line. i have a couple of questions, should I use only 10% of my credit line, and how long would it take for me to establish some credit with this card, I plan on checking my credit score every month to check if capital one is reporting my credit. Also, what is the best strategy I could go with to get my credit limit increased, and should I keep this card for as long as I can, or should I cancel it once I get a better one. Sorry for all the questionsand your help is greatly appreciated. Thank you!
Hi whoqwerty & welcome aboard!

Congrats on taking your first steps into the world of credit! Stick with your plan to pay in full every month (charge only what you can pay for) to stay out of debt, and don't ever, ever, EVER pay late. Did I mention to never, ever, ever pay late? Yeah... don't do it. Ever. Not E-V-E-R. Never, never, never, ever...

Ahem... I'm just sayin'.

Without any prior credit history, it'll take approximately six months of reporting before you have a score.

You can use as much of your credit line as you like (don't go over the limit!), but PIF to avoid interest

The "Less than 10% rule" applies to when you're working to maximize your FICO score, or to avoid reporting balances that may make your other lenders nervous. You can use as much (up to the limit) of the credit line as you like, but you have to be aware of a) the due date, and b) the statement or reporting date. The goal is to have no more than 10% utilization on any one card, and overall (revolving) report on your reports. Utilization is the your balanced owed divided by your revolving credit line; AKA "Amounts Owed" in the graphic below. And, as you'll see, utilization makes up 30% of your credit score, only 2nd to payment history... which is why you will never, ever, ever, EVER, N-E-V-E-R pay late.

Re: Student with no credit history

Anonymous — Fri, 22 Apr 2011 00:04:17 GMT

Hi whoqwerty & welcome aboard!

Congrats on taking your first steps into the world of credit! Stick with your plan to pay in full every month (charge only what you can pay for) to stay out of debt, and don't ever, ever, EVER pay late. Did I mention to never, ever, ever pay late? Yeah... don't do it. Ever. Not E-V-E-R. Never, never, never, ever...

Ahem... I'm just sayin'.

Without any prior credit history, it'll take approximately six months of reporting before you have a score.

You can use as much of your credit line as you like (don't go over the limit!), but PIF to avoid interest

The "Less than 10% rule" applies to when you're working to maximize your FICO score, or to avoid reporting balances that may make your other lenders nervous. You can use as much (up to the limit) of the credit line as you like, but you have to be aware of a) the due date, and b) the statement or reporting date. The goal is to have no more than 10% utilization on any one card, and overall (revolving) report on your reports. Utilization is the your balanced owed divided by your revolving credit line; AKA "Amounts Owed" in the graphic below. And, as you'll see, utilization makes up 30% of your credit score, only 2nd to payment history... which is why you will never, ever, ever, EVER, N-E-V-E-R pay late.

Thank you so much. If let's say one month I didn't have money to pay my balance in full by the date the statement is generated, and had to wait for my paycheck, this might be a stupid question but would it hurt the "payment history" part of my score if I payed by the due date, or would it only hurt the "amount owed" part if I went above 10%?

Re: Student with no credit history

andre181 — Fri, 22 Apr 2011 00:08:02 GMT

As long as you paid at least the minimum payment by the due date, the payment history part will not be affected.

Re: Student with no credit history

android01 — Fri, 22 Apr 2011 00:27:24 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
I recently turned 18, and I am new to this whole world of credit. I have researched all over about credit cards and how to manage them. But I need some help, I am new here. I applied for a couple of student credit cards (I am a freshman in college), and got rejected, the only one I got accepted for was the capital one MTV rewards card. I have no credit history. My credit limit was 300, I started using my card as soon as I got it, however I plan to pay my balance in full every month; (I am enrolled in paperless billing). I read that I should use only under 10% of my credit line. i have a couple of questions, should I use only 10% of my credit line, and how long would it take for me to establish some credit with this card, I plan on checking my credit score every month to check if capital one is reporting my credit. Also, what is the best strategy I could go with to get my credit limit increased, and should I keep this card for as long as I can, or should I cancel it once I get a better one. Sorry for all the questionsand your help is greatly appreciated. Thank you!
Hi whoqwerty & welcome aboard!

Congrats on taking your first steps into the world of credit! Stick with your plan to pay in full every month (charge only what you can pay for) to stay out of debt, and don't ever, ever, EVER pay late. Did I mention to never, ever, ever pay late? Yeah... don't do it. Ever. Not E-V-E-R. Never, never, never, ever...

Ahem... I'm just sayin'.

Without any prior credit history, it'll take approximately six months of reporting before you have a score.

You can use as much of your credit line as you like (don't go over the limit!), but PIF to avoid interest

The "Less than 10% rule" applies to when you're working to maximize your FICO score, or to avoid reporting balances that may make your other lenders nervous. You can use as much (up to the limit) of the credit line as you like, but you have to be aware of a) the due date, and b) the statement or reporting date. The goal is to have no more than 10% utilization on any one card, and overall (revolving) report on your reports. Utilization is the your balanced owed divided by your revolving credit line; AKA "Amounts Owed" in the graphic below. And, as you'll see, utilization makes up 30% of your credit score, only 2nd to payment history... which is why you will never, ever, ever, EVER, N-E-V-E-R pay late.

Thank you so much. If let's say one month I didn't have money to pay my balance in full by the date the statement is generated, and had to wait for my paycheck, this might be a stupid question but would it hurt the "payment history" part of my score if I payed by the due date, or would it only hurt the "amount owed" part if I went above 10%?

It would not hurt the "payment history" part of your report. Payment history refers to paying your bills on time, not how much you pay. I believe the smallest "baddie" you could see in payment history would be 30 days late. These (30,60,90,120,180 days etc). will severely impact your credit score and will remain in your payment history for 7 years, and will affect your ability to obtain credit of most kinds. Even if you don't pay by the due date (which you will NEVER do) payment history will not be affected until a 30 day period has passed. However, if your payment is NOT paid by the due date, the company that issued your card will charge you a "late fee" and could hike your interest rate to the default APR indefinitely, or if paying late is habitual, will close your account entirely.

Any time your "amount owed" changes, your credit score will likely go up or down several points. The <10% people talk about has been observed by many here as the ideal "amount owed" to keep optimal (higher) credit scores.

Re: Student with no credit history

Anonymous — Fri, 22 Apr 2011 00:23:41 GMT

Thank you all for the help it is very greatly appreciated

Re: Student with no credit history

Anonymous — Fri, 22 Apr 2011 03:13:25 GMT

I have cap1 and just a few heads up from my experience if you make too many often payments they will Lock your card ...security purposes ..because your new to them and they don't know how your spending and paying patterns are. So yea just heads up....BUT STILL PAY BEFORE STATEMENT DAY!! ....i would recommend paying a WEEK before statement day because I pay with my debit card and they update your account the day after you make a payment but take like 3-4 days to take the money out of my account ...!?!?.so idk it's weird FOR ME. Idk other ppl if it's the same.

Re: Student with no credit history

Guava — Fri, 22 Apr 2011 06:07:51 GMT

That is what I do as well. I'm paying my credit card with BoA online and it always takes about 2 business days to deliver payment (wait for 1 day and payment shows up at the end of the 2nd day)

@Anonymous wrote:
I have cap1 and just a few heads up from my experience if you make too many often payments they will Lock your card ...security purposes ..because your new to them and they don't know how your spending and paying patterns are. So yea just heads up....BUT STILL PAY BEFORE STATEMENT DAY!! ....i would recommend paying a WEEK before statement day because I pay with my debit card and they update your account the day after you make a payment but take like 3-4 days to take the money out of my account ...!?!?.so idk it's weird FOR ME. Idk other ppl if it's the same.

Re: Student with no credit history

Anonymous — Fri, 22 Apr 2011 07:40:22 GMT

Yea I don't like to do the automatic online payment from my account I feel more in control when I call the CSR and just make sure and get a confirmation number ..idk just me.

Re: Student with no credit history

Anonymous — Sat, 23 Apr 2011 00:50:03 GMT

I contacted capital one, and I was told that my payment due date is 8th of each month, and my billing cycle date is 11th of each month. Is that possible? and just to make sure; so if I pay in full by the 8th, I wouldn't have to worry the 10% of my credit limit rule correct? since my billing cycle is the 11th and around that time is when capital one will report to the credit bureaus (which will be after my payment due date)

Re: Student with no credit history

Anonymous — Sat, 23 Apr 2011 01:20:03 GMT

@Anonymous wrote:
I contacted capital one, and I was told that my payment due date is 8th of each month, and my billing cycle date is 11th of each month. Is that possible? and just to make sure; so if I pay in full by the 8th, I wouldn't have to worry the 10% of my credit limit rule correct? since my billing cycle is the 11th and around that time is when capital one will report to the credit bureaus (which will be after my payment due date)

Since the statement date (or billing date. It's the same thing) is the 11th of every month try and make sure whatever balance ( and thus utilization) you want to report is achieved by the 11th because that amount is what is used to calculate utilization for the month. And then pay the balance in full by the 8th of the next month and you'll never pay any interest.

Cap 1 IME (In My Experience) reports to the CRA's within a day or 2 of the statement (billing) date.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Student with no credit history

Anonymous — Sat, 23 Apr 2011 16:30:47 GMT

I have question, I have currently used over 10% of my credit limit, I was told by capital one that since my account is new, my first statement will be generated on 5/11/2011. And that I can pay once my statement is generated; this won't affect my credit score, as the initial reporting to credit bureaus takes place 60 days from the date of approval. And after the initial reporting (first 60 days); reporting is 1 day after each billing cycle. Is this correct? can anyone please help me