New to credit, I have a few questions.

[Anonymous]

Thank you for helping, seriously. I've been lurking and trying to learn on my own, but sometimes you need someone to just sit you down and tell you this. Especially advice specific to you.

[TheGardner]

No problem, starting credit is hard! You are in a better position than most with you starting the secured card.. I didn't even look into that option when I started (before the Internet) got stuck with random jewelry cards and the like to start.. Those hardly help as store cards..

Let us know if you need anything else!

[jamie123]

I agree with TheGardener when it comes to waiting for 6 months before applying for any other credit. You actually should wait until you have had 6 months of the Discover card reporting (Six statements paid and reported.). It will give you a much better chance of being approved for your next round of cards and maybe even a bit higher credit lines.

When the time comes, app for the Capital One Journey for Students and then the Walmart card right after that. You then will be set for at least another 6 months or better yet 1 year. After another 6 months to a year it's prime bank card time.

It takes about 2 years to establish good scores and good history. Building credit is a marathon and not a sprint.

[takeshi74]

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@Anonymous wrote:

Is there an ideal amount of credit cards to have?

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For scoring purposes at least 2-3.  Other than that it's up to you to determine what is ideal for you.

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@Anonymous wrote:

I only have one secured card with a small credit limit ($200, I'm a college student with a part time job. I can't just tie up $1000 in a single card.) and I am not sure if I should go ahead and get one or two more secured cards with the minimum deposits.

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With your credit profile you want to gradually add cards anyway.  I'd agree with prior posts that recommend building with what you have now and looking into adding another card in ~6 months or so.  With a thinner profile inquiries will affect you more.  As your profile thickens and you establish your credit history they won't be as much of an issue.

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@Anonymous wrote:

I am also confused on utilization. Is ten percent good? Or is it 20 or 30? I have no clue, I keep getting so many different answers when I try and search for them. I'm not about to max out the card, I am just wondering what I need to limit myself to: $20, $40, or $60. The exact percentage is actually a big deal on a card with such a small limit.

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Generally speaking lower is better as long as it's not 0 but there is probably a point of diminishing returns and we can't tell you exactly where that would be for you.  Do not exceed 30% except for very short periods.  For optimal scoring (e.g. when applying for new credit and trying to eke out every possible point) allow one balance to report at 10%.  You can limit purchases to maintain utilization but you can also use whatever you want and pay prior to reporting date (statement date for most cards) to reduce reported utilization.

[Anonymous]

Thank you! I appreciate all of the advice, especially when it's in agreement and what I had been leaning towards doing in the first place. I know it's a marathon and not a sprint, but I just want to do all I can possibly do now to improve my credit score in the future. If that means simply waiting for my accounts to age, then so be it. And obviously making on time payments and paying in full, but that one is a given. To be quite honest, I have absolutely no confidence that my score will even be decent enough to even get the unsecured cards that everyone has suggested to apply for in 6 months. I guess that's why I want to do whatever I can to help my score. I'm that sort of person that wants to be as prepared as possible.

[TheGardner]

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@Anonymous wrote:

Thank you! I appreciate all of the advice, especially when it's in agreement and what I had been leaning towards doing in the first place. I know it's a marathon and not a sprint, but I just want to do all I can possibly do now to improve my credit score in the future. If that means simply waiting for my accounts to age, then so be it. And obviously making on time payments and paying in full, but that one is a given. To be quite honest, I have absolutely no confidence that my score will even be decent enough to even get the unsecured cards that everyone has suggested to apply for in 6 months. I guess that's why I want to do whatever I can to help my score. I'm that sort of person that wants to be as prepared as possible.

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I "think" the scores you received were internal scores..

When you applied and got "no score" this was probably before the loans right? Now that you have a file you may have an internal score. Creditors don't rely solely on FICO they also use prior experience with customers to help shape internal scoring. This score shows one 4 month old loan and a small truck load of inquiries, not a great first impression which is why you have a low score. This "profile" has performed unfavorably in the past for that creditor. 

After 6 months you will get a fico score with 6 months of revolving history. This is VERY important, right now creditors don't know how you will handle revolving credit so they wait for someone else to take one for the team so to speak. Discover has done that with the secured card. Capital one will gladly give you an unsecured card in 6 months (perhaps sooner like 3-4 months but why risk it?). Barclays, citi and chase are hit and miss until you have one year experience. Walmart and even AMEX may also be options in 6 months.

Hope that helps, please keep us posted!

[jamie123]

I just remembered something...

If you are getting the Discover IT card you should get a free real FICO TU 08 score each month. It will make it easier for you track your progress and the price is right!

Once you activate your card and online account you need to look under the "Account" tab and under "Features and Benefits" for the FICO score.

Your scores should rise pretty fast at first as long as you keep your reporting balances less than 10%. You should easily qualify for the Cap1 card and Walmart card in 6 months.

[NRB525]

OP: FWIW, if I only had a $200 secured card to work with, I would not worry at all about the utilization of the card. Staying within the $200 and paying it on time and keeping it active are the most important steps right now. After you get more cards and higher limits, and a significantly longer payment history, then the utilization becomes an issue.

This early in your credit journey, you are looking to just show usage, to string together months of on-time payment. Your scores likely won't be noticeably impacted by utilization this early on, they will be outweighed by just added months of good payments.

Nothing against the suggestions to watch utilization, they are accurate, you just are not to that point yet. Later you will be.

Good luck!