Need help

Anonymous · ‎08-26-2018

Hello, i am new to this whole credit thing, i just need some advice. I have 2 secured cards and was wondering what is best for me to do. Should i pay off balance every month, or carry a small balance to eventually graduate to unsecured? Any advice is greatly appreciated😁

Anonymous · ‎08-26-2018

Without knowing more about your background such as credit negatives, installment loans (i.e.- car leases/loans, student loans, mortgages, etc) and any other credit “history,” I’ll just start with the premise you are a blank slate just beginning credit. As such, you are now trying to build a history (pattern) of good, low risk behavior for creditors to see. So whether you PIF and not let a balance report, or allow a small balance report before PIF is not really a big deal. Once you’ve established a history (6 months will generate FICO scores), you can then use techniques such as AZEO to optimize your scores prior to applying for new credit cards or loans. You’ll also want to diversify your portfolio to the extent possible, but I wouldn’t worry too much about that until you’ve graduated from secured credit cards to unsecured. As you will find from reading and participating in discussions here, building and maximizing credit is a process, and one that most describe as a marathon rather than a sprint. Be patient, ask questions, do your research, and then go for it! One thing you’ll quickly find here is that there are many opinions, and most everyone is friendly and nonjudgmental. Welcome and good luck!

Anonymous · ‎08-26-2018

Thank you

Appleman · ‎08-26-2018

You will of course read many cautionary tales here on the myFICO boards of people who have had credit card problems in the past (myself included). Take time to read the difficult stories and even venture into the rebuilding area of the forum. You are at a pivotal time where you still control your future.

Take time to read about budget strategies. Dave Ramsey (not my favorite), Suze Orman, YNAB (you need a budget, my personal favorite) and any other reading you can find related to budgeting money. The biggest trap I fell into was thinking credit limits meant the ability to spend. While technically that is true, I did not have a plan to pay back my purchases in a reasonable amount of time. Now, I enjoy my miles, hotel points and cash back for using credit cards...

Good luck, and please ask a lot of questions. The people on this forum are ever helpful.

Credit is great but you need to control it or it will control you.

Anonymous · ‎08-26-2018

@Anonymous wrote:
... Should i pay off balance every month, or carry a small balance to eventually graduate to unsecured?

My unscientific opinion is that a lender issues a secured card instead of an unsecured card because they see a greater risk to not get their money returned to them. Therefore it makes sense to me if one wants to graduate from a secured to unsecured card, it's imperitive to demonstrate a habit of promptly returning the lender's money in full. Thus: Pay in full, the sooner the better.

SouthJamaica · ‎08-26-2018

@Anonymous wrote:
Hello, i am new to this whole credit thing, i just need some advice. I have 2 secured cards and was wondering what is best for me to do. Should i pay off balance every month, or carry a small balance to eventually graduate to unsecured? Any advice is greatly appreciated😁

1. Do not carry any balances.

2. Let one card report a zero balance (i.e. pay it off before statement cuts) and let the other card report a small balance (and then pay it off promptly after statement cuts).