New to this

[henryla]

Hello my  name is henry i just turned 20 years old and just have a few questions , right now im trying to build my credit as i have none ,  i worked at macys so they provided me with a small 100 limit retail credit card and a kayjewlers credit card that were running  a special and i have 400 limit on those. i used those to gain credit last time i checked around july 2010 i was around 622 transunion in  and then i applied for a car loan and was approved with my credit union.

       I would just like to thank this community because i been reading and gaining knowledge about credit scores and i have been pulling them from here. right now im at a 639 and i used the feature of future score

Your current FICO® Score is 639

Your simulated FICO® score would be in the following range:

709 - 749

Best Action - Pay Down 90%-100% of Your Credit Card Balances - Over the Next 24 Months

Is this basically saying just pay down my credit cards in the course of 24 months and my score will be awsome?  how come it doesnt mention anything about my auto loan?

[chasmith]

Your utilization of revolving credit has a big impact.  With two cards you should try to keep one at zero and one under 9% of credit limit to maximize your score.

The installment loan will help some as you keep making ontime payments, but that's a slower process.

Right now you have two "store cards".  If you can get a bamk card (VISA or Mastercard). possibly from your Credit Union, that will also help.

You're off to a great start!  I wish I'd been as savvy as you when I was your age, but heck, they'd barely invented computers, much less the credit scoring monster!

[henryla]

thanks for the reply

so your saying pay off one and keep one lets say the limit is 100 dolalrs keep it around 90 dollars , ?

and i spoke with my union i think i was able to get approvoed for a CC for a low limit i believe of 1000 but unfortunately i started a new job with higher pay but they said i have to atleast be working here for 4 months which is fine my credit should raise a little for higher chance of approvel

[Anonymous]

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@henryla wrote:

thanks for the reply

so your saying pay off one and keep one lets say the limit is 100 dolalrs keep it around 90 dollars?

Right.  Keep all your cards reporting at zero balance except one.  Let that one report a balance below 9% of your Credit Limit.

So, on a $100 CL, let a balance of $9 or less report.  On a $1,000 CL, let a balance of $90 or less report.

and i spoke with my union i think i was able to get approvoed for a CC for a low limit i believe of 1000 but unfortunately i started a new job with higher pay but they said i have to atleast be working here for 4 months which is fine my credit should raise a little for higher chance of approvel 

Great!  I love my credit unions - they can be super to work with. 

However, FICO likes to see at least one bank/national CC reporting - and CU cards don't fit this category (even if they're a Visa or MC).  If you accepted this CU credit card, let it age for at least six months; Have your utiliity down to less than 9% on one card and zero balance on the other cards; Then pull your FICO scores and check here for recommendations on a bank card to apply for.  But I would definitely let that CU card age gracefully for six months (and the new job as well) before applying for your next card.

The balances on your installments won't affect your score as drastically as the balances on your credit cards.  You'll always want to pay installments on time, but you won't see the FICO points reward for paying them down.  You can see dramatic score changes for paying down cc's.  That's why the "best action" for your future score specified credit cards.  And paying them down will yield a score increase in even less than 24 months.

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[henryla]

thanks for the reply guys , is there any CC that i should be accepted for even with a small limit that can increase with my score?

[henryla]

update - applied to capital one student visa accepted for 500 limit

[Anonymous]

Congrats!  Having your first bank card should boost your score. 

If you let all of your credit accounts report a zero balance except one; and that one reports a balance less than 9%, you should see additional FICO points. 

Congrats again and Best wishes!

ETA:  Keep one eyeball on your AAofA as you move forward

[henryla]

so pay off macys and kay jelwers and use CAP one CC buy some gas or something?

[Anonymous]

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@henryla wrote:

so pay off macys and kay jelwers and use CAP one CC buy some gas or something?

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That would work swell.  Congrats on not looking at that new credit limit as spendable cash - it's more like a usable tool in your credit toolbox.

Macy's - well mine at least - is a 24.99% store card - which is absolutely killer if you carry any type of balance with them.  I don't know Kay's, but it seems CapOne is the obvious best choice for reporting a small balance and PIF to avoid paying any interest.  Good work!

What are your current balances on Macy's and Kays?  Are you able to PIF one or both of those cards fairly quickly?

[henryla]

i can PIF both in 2 weeks , one week kay the other week macys