@MOjah Welcome to the myFICO forums!
You need to have an account in your name such as a CC or loan reporting to a credit bureau for at least six months before FICO score can be generated.
Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.
IMO, Discover it Secured is one of the best-secured CCs for poor credit, bad credit, and no credit applicants—and one of the best gas CCs you can get with bad credit. Disco offers 2% cash back at restaurants and gas stations (one up to $1,000 in combined purchases each quarter) and 1% cash back on other purchases. You’ll need an up-front security deposit of at least $200 to apply for the Discover it Secured Card.
Capital One Secured CC requires a refundable security deposit of $49, $99 or $200 based on your creditworthiness. Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line. Get access to a higher credit line after making your first 5 monthly payments on time.
Bank of America's BankAmericard Secured CC is designed to help establish, strengthen or rebuild credit for an annual fee of $39. A minimum refundable security deposit of $300 is required to open this account. Your maximum credit limit will be determined by the amount of the security deposit you provide, your income and your ability to pay the credit line established. If you provide a deposit that exceeds the calculated maximum amount based on your ability to pay, a will be returned to you for the difference. BoA periodically reviews your account and, based on your overall credit history (including your account with us and other credit cards and loans), you may qualify to have your security deposit returned. Not all customers will qualify.
Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from getting a FICO scoring penalty.
The installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into SelfLender or a Share Secured Loan at a Credit Union.
Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that a person can handle credit responsibly. If you have open, active accounts that are being paid on time and pay all of your bills on time all the time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way to build good, solid credit.
I just turned 18 a month ago and got a credit card with discover immediately. I also got added as an Authorized User to my mom’s Synchrony Bank credit card that she has had for 4 years(but I waited a month after I turned 18). Currently I do not have a FICO credit score. Would me being an AU on my moms credit card give me a credit score or do I still have to wait 6 months after I opened my personal credit card ?
Great question. It all turns on whether the AU account has appeared on your reports yet and (if it has) how the "Date Opened" reads. The DO probably reads as being four years ago. If so, you will meet the two criteria necessary for a FICO score. I.e....
Do I have an account on my report that is > 6 months old?
Do I have an account on my report that has reported to the bureaus within the last six months?
The way you can find out whether the account has appeared and if so how the DO reads is by using a free tool like Credit Karma. Karma will show you your EQ and TU reports as often as once a week. You should ignore Karma's scores, but its reports are very valuable.
Once you have confirmed that the AU has appeared and its DO reads the way you want, then you can sign up for the $1 trial at Credit Check Total to get your scores. (Just be sure to cancel it right away once you have the scores.)
Your scores will be highest if your mom's card show's a zero balance while your own Discover card shows a small positive balance.