Does it really take 6 months to get a FICO score?

[Anonymous]

I've always been wary of credit and only spent what I had.  Now I'm trying to establish credit.  I was just approved for a secured credit card a few days ago, but I haven't received it yet.

I haven't been able to find a clear answer on how long it will take me to get a credit score.  Will a score be reported the first month I pay my credit card bill, or will it really take 6 months?  I hope it doesn't really take that long. 

I plan to only charge 1/3 of the balance and pay that off every month.  I hope this is the right thing to do.

Thanks.

[haulingthescoreup]

Hi, welcome to the forums!

It really does take six months. That's because the score is a risk score, meaning that it tries to predict the risk that you will default on your credit, so it needs a bit of a track record.

minimum requirements for a FICO score:

• At least one account that has been open for six months or more
• At least one undisputed account that has been reported to the credit bureau within the past six months
• No indication of deceased on the credit report (Please note: if you share an account with another person this may affect you if the other account holder is reported deceased).

So:

• Wait till it has been open for six months,
• Make sure that it actually does report to the credit bureaus, at least once anyway, and
• Don't die while you're waiting. 

Use the card as much as you like, as long as you know (= have cash in the bank set aside and ready to use) that you can pay it off in full every month. Don't carry a balance. You can wait until the statement posts and pay the balance then, pay all of it off before the statement posts so that it shows and reports $0, or pay off part, let the rest report, and then pay it off.

[Anonymous]

It's disappointing that it really takes 6 months, but I guess I understand.

About how high would a starting score be for someone who pays off the balance every month?  Will it start out in the 500s/600s, or be even higher?

[haulingthescoreup]

From what I've seen, most people start at around 680. If they get a second card after six months and keep both of them clean, they should hit 710-720 after a year or so.

With only one card, it's apparently not as critical to have super-low balances reporting. But generally speaking, you don't want to have over 10% of your credit limit reporting. That means that you can use your card plenty, but pay it off online as you go so that you don't have a huge balance reporting.

[Anonymous]

Will it hurt my credit score if I charge my limit and pay it off within two months?  Will that show up on my credit score 6 months from now?  I really want to start off as high as I can.

[Anonymous]

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@Anonymous wrote:

Will it hurt my credit score if I charge my limit and pay it off within two months?  Will that show up on my credit score 6 months from now?  I really want to start off as high as I can.

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For scoring purposes it is never really a good idea to use all your available credit and let it report. Even 6 months from now it is possible it will have a negative impact on your scores. Just use the card sensibly and leave a very small balance on it to report and then pay in full after it reports as not to accrue interest charges. 

[MarineVietVet]

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@Anonymous wrote:

Will it hurt my credit score if I charge my limit and pay it off within two months?  Will that show up on my credit score 6 months from now?  I really want to start off as high as I can.

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Hello there.

It's never necessary to carry a balance forward from month to month. That doesn't help your score at all but does make the creditor happy because you will pay interest.

All you need to do is make a very small charge (even a few dollars is enough) and wait for it to report on your monthly statement and then PIF (Pay In Full) before the due date to avoid paying interest.

That is enough to show activity without costing you any money. And that first charge will show in 6 months.

Edited to add: Out typed by JM-AM!

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[haulingthescoreup]

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@Anonymous wrote:

Will it hurt my credit score if I charge my limit and pay it off within two months?  Will that show up on my credit score 6 months from now?  I really want to start off as high as I can.

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You definitely don't want to do this as a scoring tactic.

If at some point, you truly must carry a balance for a month, paying the rest off the following month, it will not affect your scores on down the road, either positively or negatively. FICO scores are a snapshot of what is on your credit reports at the very moment that someone pulls a score. They have no "memory" for past utilization levels, although of course, they certainly have a memory for past late payments and so forth.

But when it comes to the impact of how much of a balance reports, it only affects your scores during that month-long period that the balance displays. Once it changes again, your scores will reflect the new balance.

The way to have your FICO scores be as high as possible in six months' time is to treat the card as carefully as you would a new-born baby, never charging more than you have the money in the bank to pay off immediately, if need be. Write the statement dates and the due dates on your calendar, and do whatever you have to do to make sure that you never come even close to being late. If you don't get a statement in the mail, or an e-mail that your online statement is ready, that shouldn't affect you, because you'll already know when to expect them. Many CCC's will let you pick your own due date, so that might be an option, too.

But again, don't fall into the trap of waiting until right before the due date to pay. You can pay before the statement posts, so that it will show a $0 balance and report $0 to the credit bureaus, or you can pay the day that the statement shows up or the next morning. Yes, you can set up an automatic payment with many CC's, so that it will pay the minimum amount on the due date, but that's a terribly scary thing to rely upon.

Sometimes getting into the rhythm of monthly payments can be the hardest thing to learn when you're new to credit.

But again, using a lot of the CL on your card might make your credit card company happy, but it won't make your FICO scores higher when they finally start to generate. And if a high balance has been reported to the credit bureaus when you start to get scores, they'll be lower than they would have been with a lower balance or with $0 reporting.

[MarineVietVet]

My goodness HTSU!!!

Have you been saving up all day to write all that?? 

Just joking. Your advice is right on the money as usual.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[haulingthescoreup]

lol, I thought I'd try to empty my brain out on one post.