19 and trying to understand my credit score.

[Anonymous]

Hello,

So I just got a Discover credit card and during the application process I recieved my credit score. According to Discover, my FICO Credit Score is 697. This is my first credit card I have ever gotten so I don't have any history with that. I am 19 and a sophomore in college and so far have $3,464 in subsidized federal direct loans and $1,979 in unsubsidized federal direct loans. I don't believe I have to pay these off until after I graduate though. 697 seems quite low. Could this be because of my studnet loans? I am certainly able to pay them off once I graduate but due to my financial situation it is better for me to wait to pay them off until after I graduate rather than paying them off right now (if I even could pay them off right now). How can I go about finding out what exactly is causing my score to be so low?

One more quick question, does the size of my payments on my new credit card change how much it will effect my credit score? I am very responsible and will always pay off my credit card bill on time or in advance, but does it help my score more if I chage and pay off say $150 a month vs $25?

Thank you for any help!!

[Anonymous]

For someone that's 19 years old, a near 700 score is not "low" as you have very limited credit history.  The only thing that will improve your score at the point in the credit game for you is TIME.  1 year from now your scores could very well be 750 so long as you're responsible with your credit, don't apply for any new credit, etc. 

The way you use your card such as how much you charge and dollar amounts you pay monthly have no impact on your FICO score.  What DOES have an impact is the utilization percentage.  If this is your only card, you want to allow the card to report no more than 8% of its limit.  Grab a calculator and see what 8% of your credit limit is.  Whatever that number is, you want the card to report between $5 and that number.  For example, if the card has a $1000 limit, you'd want the card to report $5-$80 in order to maximize your FICO score.  If your card is currently reporting over $80 (and has a $1000 limit) you are leaving points on the table and you have the ability to scoop up more almost immediately by paying down your balance. 

I'd definitely suggest adopting a PIF (Pay In Full) philosophy right now at your young age.  Pretend that your "minimum payment" doesn't say $25, but says whatever your statement balance is or even your total balance except $5 or so if you choose to let a small amount report as suggested above.  This is great behavior to take on now.  Going through life without balances on your credit card(s) is a healthy thing to do, causes less stress and makes you a lesser risk to creditors.  If you have any further questions, fire away!

[SouthJamaica]

---

@Anonymous wrote:

Hello,

So I just got a Discover credit card and during the application process I recieved my credit score. According to Discover, my FICO Credit Score is 697. This is my first credit card I have ever gotten so I don't have any history with that. I am 19 and a sophomore in college and so far have $3,464 in subsidized federal direct loans and $1,979 in unsubsidized federal direct loans. I don't believe I have to pay these off until after I graduate though. 697 seems quite low. Could this be because of my studnet loans? I am certainly able to pay them off once I graduate but due to my financial situation it is better for me to wait to pay them off until after I graduate rather than paying them off right now (if I even could pay them off right now). How can I go about finding out what exactly is causing my score to be so low?

One more quick question, does the size of my payments on my new credit card change how much it will effect my credit score? I am very responsible and will always pay off my credit card bill on time or in advance, but does it help my score more if I chage and pay off say $150 a month vs $25?

Thank you for any help!!

---

1. The best way to find out what's depressing your score is to get the scores from MyFICO and see what the 'negative factors' are; that will give you a clue. 

2. FICO has a number of scoring models. You're probably seeing only the Transunion FICO 8.  You may find that some of the other scores are very different. FICO 8 is very sensitive to installment loan utilization percentage. So if you have student loans on which you owe 100% of the original loan amount, that would depress your FICO 8 score.  But it might have no effect on some of your other scores.

3. No it doesn't help to charge more or to charge less; the important thing is to pay in full and to pay promptly and to not carry balances.

[Anonymous]

Before you pull your scores, here are a couple thoughts.

(1)  Spend a couple months keeping your utilization % in that narrow range that BBS suggested.  Once you have done that for a while, your scores will be as high as they can go for the short term, and it will make sense to pull them and see what they are.

(2)  Enroll in https://www.creditscore.com/

This will get you your Experian report and your Experian FICO 8 score.  That's different from the FICO score you are getting from your Discover credit card.  It is also a FICO 8 score but it is drawn on TransUnion data.

When you do pull your scores at all three bureaus, consider using the $1 trial at Credit Check Total.  That will be a lot cheaper than myFICO and price can be important to a 19 year old college student.

Be sure not only to look at your scores but also at the reports.

[NRB525]

OP is the Discover card your first credit card? The 700 score is practically a gimme with no history and no baddies, and slightly below that is not at all bad when just starting out. When you build up some payment history with the Discover, that will begin to help your score.  

The Discover card comes with a true FICO TU score each month. I'd suggest using the Discover, and watch the FICO score there.  Over time, both from observing your actual score results and reading here, you should find out more. I would not worry too much about specifics right now, beyond the only definite rule: always pay at least the minimum payment by the due date. 

Besides the two loans, do you have any other cards or credit? 

[rmduhon]

And never go over the cards limit

[Anonymous]

OP, also if it hasn't been mentioned yet in addition to your TU FICO 08 score from Discover that you get for free with your account, you can also get your EX FICO 08 score for free at creditscorecard.com, which is also a Discover-supplied source.

[Anonymous]

---

@Anonymous wrote:

OP, also if it hasn't been mentioned yet in addition to your TU FICO 08 score from Discover that you get for free with your account, you can also get your EX FICO 08 score for free at creditscorecard.com, which is also a Discover-supplied source.

---

If our OP signs up at creditscorecard.com (the Discover scorecard -- FICO only and no report) then he becomes ineligible for creditscore.com, which gives him both his report and score.  I'd lean toward the latter since it gives him more, but curious to hear what others think.

[Anonymous]

---

@Anonymous wrote:

---

---

If our OP signs up at creditscorecard.com (the Discover scorecard -- FICO only and no report) then he becomes ineligible for creditscore.com, which gives him both his report and score.  I'd lean toward the latter since it gives him more, but curious to hear what others think.

---

Really?  Is creditscore.com also a Discover product or just an Experian product?  I have been part of creditscorecard.com for a while now, but never attempted to sign up for creditscore.com. 

So, is creditscorecard.com essentially irrelevant then, as you can get what they provide and more with creditscore.com?

[NRB525]

---

@rmduhon wrote:
And never go over the cards limit

---

That is good advice, but is just another choice about handling credit. There may be fees associated with going over limit, it is not good to leave a card over limit, but if promptly paid down, going over limit is not a long term impact on score. 

Paying at at least the minimum payment on time is the only real Must Do in credit. Everything else is a choice in managing your credit.