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Help me start my credit off right please!!
Good Morning Everyone,
Thank you for taking your time and reading my post, I am 28 years old and i am now trying to start building my credit up. I have never had credit cards, auto loans or anything that reports to build credit. In the past month I have gotten 3 Secure credit cards because everywhere i have read 3 is the best # of cards to start with.
I have a Discover IT Card with a $200 Limit, a Capital One Platinum Card with a $200 limit and a BOA Card with a $300 Limit.
What I need to know is how much of each i should be using and when i should pay that balance off to be able to generate the best results for my credit score? Any help at all I will seriously appreciate.
Thanks again,
Coach K
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Re: Help me start my credit off right please!!
To grow and graduate those cards, you should definitely use them but pay mid-statement so that you don’t end up with a statement closing where you have it maxed out because utilization that high is very bad for your score. Don’t let anything report as over 30% utilized of you credit limit and you’ll be fine. Within a few months you’ll see your scores are quite decent; I started out the same way!
Started my credit journey August 2016, after abstaining from credit for years after some poor financial choices in high school. Started with scores in the 580s. Current scores 11/6/18 - EQ: 754 TU: 757 EX: 743
From oldest to newest: DuPage CU Visa Platinum, SL 500 now 3750, Cap1 Platinum SL 300 PC'd to QS now 1600, Alliant Credit Union Share Secured Loan $500, Amex BCE SL 5000 now 600, Neiman Marcus SL 700 now 10000, Target RedCard SL 400 now 2900, Amex ED SL 10000 now 500 (combined with Cash Magnet), Chase AARP SL 800 now 3300, Chase Amazon Prime SL 1000 now 10000, Honda Lease, Discover it SL 1000 now 7000, Synchrony PayPal 2% CB SL 3000 now 10000, Barclays Uber Visa SL 800 now 2100, Citi ThankYou Preferred SL 3300 now 5300, Chase Ritz-Carlton SL 10000 now 1500 (moved to other cards to get annual fee refund), Comenity Total Rewards Visa SL 2000 now 3250, US Bank Cash+ SL 500 recon'd to 10000, US Bank Reserve LOC 1000, Union Bank Rewards Visa SL 5000 now 5000, Amex Cash Magnet SL 9900 now 20000, Cap1 Venture SL 10000 now 10000, Discover it 3000 SL now 4000, Amex SPG Luxury 3100 SL now 3100, Amex Amazon Business Prime 10000 SL now 10000, Amex Gold NPSL, US Bank Premier LOC 5000, US Bank Visa Platinum 5400 SL currently reconning
Combined revolving CL $135,300
Goal: Spring 2019 800+ club, $50,000 combined Amex limit
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Re: Help me start my credit off right please!!
$944,008 Amex BRG
$91,953 Amex SC
$58,351 Discover It
$50,046 BofA CR
$36,146 Amex PRG
$6,774 Cap1 QS
$963 Amex CM
$1,188,241 Yearly Spend
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Re: Help me start my credit off right please!!
Here is the link for the Share Secured Loan Technique. Although Alliant no longer offers SS loans, we feel confident that we will eventually find some good options in our Quest for an Alternative to Alliant.
Note that the "all zero except one" technique for credit cards (also called AZEO) only really comes into its own in the 40 days before an important application for credit. By implementing AZEO 40 days before you apply for your next loan or card, you will get all the extra points from AZEO that you can.
In the meantime, there is nothing wrong with allowing cards to report a small balance each month. Be sure that you are only using your cards to buy stuff you really need: gas, groceries, cell phone bill, etc. Keep your total utilization (all credit limits combined) very low (less than 9%) and each card considered by itself at less than 29%.
And don't apply for any more cards for at least 13 more months.
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Re: Help me start my credit off right please!!
Someone educate me. I started off life well because I was an authorized user on credit cards via parents and I just kind of slipped right into knowing how to properly use a credit card. I am nearly 30 as well and have never paid interest on a credit card.
I advise people new to credit that department store cards like JCPenny or Kohls are easy to get and a good way to build credit. Am I wrong? A friend of mine started with a $500 unsecured captial one card then got a department store card. Recently they applied for an Amazon Prime Visa Signature and are around a $5000 credit limit. This all took place within about 3 years.
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Re: Help me start my credit off right please!!
coach, sounds like a great start. Good quality cards that can grow with you. One thing to decide is when you need good credit by, and what you need credit for.
Option a: "Hit the garden"
Short term. Open up a SSL and don't do anything else for 6 months. This will peak your score, and it will continue to grow over time, but if you ever use your credit to get new credit you will have a large downward spike.
Long term. You can even hit 850, but it could take 20 years.
Option b: :spree".
Short term. Your score will stay in the gutter because every few months new accounts are added.
Long term. You will have a thicker profile, and as time goes on your score will be more resistant to new credit lines being added.
These are the two extremes, most people pick a path inbetween.
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Re: Help me start my credit off right please!!
@Anonymouswrote:Someone educate me. I started off life well because I was an authorized user on credit cards via parents and I just kind of slipped right into knowing how to properly use a credit card. I am nearly 30 as well and have never paid interest on a credit card.
I advise people new to credit that department store cards like JCPenny or Kohls are easy to get and a good way to build credit. Am I wrong? A friend of mine started with a $500 unsecured captial one card then got a department store card. Recently they applied for an Amazon Prime Visa Signature and are around a $5000 credit limit. This all took place within about 3 years.
You are not wrong. But it's important for a person to be aware of two implications of opening store cards:
(1) They can be harder to keep active, because you can only use them at that particular store. A major credit card (anything with an Amex, Visa, MC, or Discover logo) can be used thousands of places, and so it is easy to make sure you are only using the card to buy stuff you absolutely need anyway (groceries, gas, cell phone bill, etc.).
(2) Some credit scoring models (notably the non-FICO models used by the insurance industry) penalize you for the simple presence of store cards on your report. Even closing the store card might not eliminate the penalty.
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Re: Help me start my credit off right please!!
@Anonymouswrote:
@Anonymouswrote:Someone educate me. I started off life well because I was an authorized user on credit cards via parents and I just kind of slipped right into knowing how to properly use a credit card. I am nearly 30 as well and have never paid interest on a credit card.
I advise people new to credit that department store cards like JCPenny or Kohls are easy to get and a good way to build credit. Am I wrong? A friend of mine started with a $500 unsecured captial one card then got a department store card. Recently they applied for an Amazon Prime Visa Signature and are around a $5000 credit limit. This all took place within about 3 years.
You are not wrong. But it's important for a person to be aware of two implications of opening store cards:
(1) They can be harder to keep active, because you can only use them at that particular store. A major credit card (anything with an Amex, Visa, MC, or Discover logo) can be used thousands of places, and so it is easy to make sure you are only using the card to buy stuff you absolutely need anyway (groceries, gas, cell phone bill, etc.).
(2) Some credit scoring models (notably the non-FICO models used by the insurance industry) penalize you for the simple presence of store cards on your report. Even closing the store card might not eliminate the penalty.
3. Stores are more likely to close (especially in todays economy) which would lead to problems with profile growth in 10ish years.
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Re: Help me start my credit off right please!!
@Anonymouswrote:
Good Morning Everyone,
Thank you for taking your time and reading my post, I am 28 years old and i am now trying to start building my credit up. I have never had credit cards, auto loans or anything that reports to build credit. In the past month I have gotten 3 Secure credit cards because everywhere i have read 3 is the best # of cards to start with.
I have a Discover IT Card with a $200 Limit, a Capital One Platinum Card with a $200 limit and a BOA Card with a $300 Limit.
What I need to know is how much of each i should be using and when i should pay that balance off to be able to generate the best results for my credit score? Any help at all I will seriously appreciate.
Thanks again,
Coach K
Let 2 cards report a zero statement balance and 1 report a small balance. That will optimize your credit utilization factor across all FICO scores.
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Total revolving limits 586020 (520820 reporting) FICO 8: EQ 706 TU 701 EX 692
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Re: Help me start my credit off right please!!
@Anonymouswrote:Someone educate me. I started off life well because I was an authorized user on credit cards via parents and I just kind of slipped right into knowing how to properly use a credit card. I am nearly 30 as well and have never paid interest on a credit card.
I advise people new to credit that department store cards like JCPenny or Kohls are easy to get and a good way to build credit. Am I wrong? A friend of mine started with a $500 unsecured captial one card then got a department store card. Recently they applied for an Amazon Prime Visa Signature and are around a $5000 credit limit. This all took place within about 3 years.
I was given similar advice when I was starting out and I wish I hadn't followed it.
IMHO the only time to get such a card would be if you have no FICO score at all yet. Then I would get one and only one such card, and I would get rid of it, or at least cut it up, as soon as I could get a regular credit card.
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Total revolving limits 586020 (520820 reporting) FICO 8: EQ 706 TU 701 EX 692