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#4158879 - 07/23/16 03:00 PM How to build credit with a credit card
Nick1994 Online   content


Registered: 02/19/13
Posts: 10113
Loc: Phoenix, AZ
You guys have a lot more experience than I do with credit stuff. I'm 21 and trying to build credit, I always get denied for a regular credit card so I applied for a Bank of America secured credit card and was approved, got the card last week. I put $400 in for basically the deposit. I'm unsure of how much to put on this every month? Some people say 30% others say 50%. I'll be paying it off every month and will never carry a balance. I'm considering upping the limit already, I've just got to put more in for the deposit, no big deal.

What percentage of it do I use? Any other tips?

Thanks.
_________________________
2015 Hyundai Sonata 2.4L 79k PU 5w30 & OEM
2000 Toyota Camry 2.2L 228k M1 AFE 0w30 & Wix
1996 Jeep Cherokee 4.0L 146k M1 HM 10w40 & Fram Ultra

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#4158881 - 07/23/16 03:02 PM Re: How to build credit with a credit card [Re: Nick1994]
eljefino Offline


Registered: 06/15/03
Posts: 32637
Loc: ME
Use up to the limit every month and pay it off all the time. You should find they'll keep the $400 secuirty but "give" you additional credit in a matter of months. Watch for that letter in the mail.

Also put a utility in your name, even if you live at home, have roommates etc.

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#4158882 - 07/23/16 03:02 PM Re: How to build credit with a credit card [Re: Nick1994]
OVERKILL Offline


Registered: 04/28/08
Posts: 36464
Loc: Ontario, Canada
If you have the opportunity to use it and then expense back through work, that'll run up your credit rating rather quickly. I expense hotels, gas...etc through work, put everything on the card and then pay it all off when I get reimbursed.
_________________________
2016 Durango Limited
2016 Grand Cherokee SRT

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#4158890 - 07/23/16 03:11 PM Re: How to build credit with a credit card [Re: eljefino]
Ihatetochangeoil Offline


Registered: 10/28/14
Posts: 580
Loc: On the road Midwest
Originally Posted By: eljefino
Use up to the limit every month and pay it off all the time. You should find they'll keep the $400 secuirty but "give" you additional credit in a matter of months. Watch for that letter in the mail.

Also put a utility in your name, even if you live at home, have roommates etc.


+1. But I disagree about that utility part. Water, electric, phone, sewer bills, cable TV...Aren't really businesses; they're utilities. Our local water company is my smallest monthly bill, and they are the nastiest to deal with BECAUSE they are a public utility....Their only recourse if someone DOESN'T pay the bill is to sever service. Since they are NOT a business, they cannot report delinquent customers to Transunion, Equifax or Experian. Paying utility bills is useless to establish credit.

Now go out and obtain 2 more secured cards so you simultaneously establish 3 lines of credit.

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#4158895 - 07/23/16 03:17 PM Re: How to build credit with a credit card [Re: Ihatetochangeoil]
itguy08 Offline


Registered: 09/15/11
Posts: 3227
Loc: Somewhere
Originally Posted By: Ihatetochangeoil

+1. But I disagree about that utility part. Water, electric, phone, sewer bills, cable TV...Aren't really businesses; they're utilities. Our local water company is my smallest monthly bill, and they are the nastiest to deal with BECAUSE they are a public utility....Their only recourse if someone DOESN'T pay the bill is to sever service. Since they are NOT a business, they cannot report delinquent customers to Transunion, Equifax or Experian. Paying utility bills is useless to establish credit.

They do start to "count" for the FICO score:
http://blog.credit.com/2015/04/new-fico-score-factors-in-utilities-how-often-you-move-113098/

Also while utilities don't report payment history they DO check credit and DO send people to collections, which will show up on a credit report.

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#4158899 - 07/23/16 03:20 PM Re: How to build credit with a credit card [Re: eljefino]
Rolla07 Offline


Registered: 11/05/11
Posts: 4737
Loc: MTL, CANADA
Originally Posted By: eljefino
Use up to the limit every month and pay it off all the time. You should find they'll keep the $400 secuirty but "give" you additional credit in a matter of months. Watch for that letter in the mail.

Also put a utility in your name, even if you live at home, have roommates etc.


Limit wont matter much until it posts at month end. Keep it under 60% if you can but it wont matter if you pay in full at months end anyways. Only if you hold a balance you should be under 2/3 of the limit to reflect available credit vs used credit. Tons of factors are involved however. If you keep 0 balance.. Spend whatever you can afford to pay off. If you cant, just be sure to make the minimum payment before the due date. Your credit will be good enough in a year if you never miss a minimum payment to have it become unsecured (as long as you dont accumulate any more debt. I learned the hard way.. Any late payments or missed will follow you 7 years (at least here in canada, must be similar there) GOod job on keeping a zero balance, no 7 yr regret.. If you eventually want to buy a house, car financing or wtv..
_________________________
2007 Corolla Red Pearl 155k miles
PP 0w20 & ST 4967


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#4158900 - 07/23/16 03:23 PM Re: How to build credit with a credit card [Re: Ihatetochangeoil]
Rolla07 Offline


Registered: 11/05/11
Posts: 4737
Loc: MTL, CANADA
Originally Posted By: Ihatetochangeoil
Originally Posted By: eljefino
Use up to the limit every month and pay it off all the time. You should find they'll keep the $400 secuirty but "give" you additional credit in a matter of months. Watch for that letter in the mail.

Also put a utility in your name, even if you live at home, have roommates etc.


+1. But I disagree about that utility part. Water, electric, phone, sewer bills, cable TV...Aren't really businesses; they're utilities. Our local water company is my smallest monthly bill, and they are the nastiest to deal with BECAUSE they are a public utility....Their only recourse if someone DOESN'T pay the bill is to sever service. Since they are NOT a business, they cannot report delinquent customers to Transunion, Equifax or Experian. Paying utility bills is useless to establish credit.

Now go out and obtain 2 more secured cards so you simultaneously establish 3 lines of credit.


I can recommend you try to apply for a store card unsecured. They are typically more lenient with respect to credit score. But only do this if you are confident you can control your spending.. This will also help.

Do you have a cell phone billed monthly? They will likely report to credit. You should also look into your credit file to check your score and make sure its up to date. In canada its trickier but what about credit karma? Duno if its any good but saw ads for it... Or request copy of ur credit reports from equifax or trans union. They should mail you one for free.. I got a 30 day free trial with equifax and it helped me improve my score to get a mortgage.. Good luck


Edited by Rolla07 (07/23/16 03:26 PM)
_________________________
2007 Corolla Red Pearl 155k miles
PP 0w20 & ST 4967


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#4158902 - 07/23/16 03:26 PM Re: How to build credit with a credit card [Re: Nick1994]
SatinSilver Offline


Registered: 01/24/08
Posts: 10167
Loc: OH
Apply for the DTD and Shell card and see if they approve you.

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#4158910 - 07/23/16 03:30 PM Re: How to build credit with a credit card [Re: Nick1994]
rustypigeon Offline


Registered: 03/27/09
Posts: 211
Loc: PA USA
Times sure have changed. When I got my first card about 22 years ago, it was as simple as filling out an application. My first card had a $5000 limit, no fees. This was as a kid just out of high school making $4.75/hr and no previous credit history.
_________________________
1994 Toyota Pickup 202,000mi
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2000 BMW 323i 126,000mi
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#4158913 - 07/23/16 03:31 PM Re: How to build credit with a credit card [Re: itguy08]
Ihatetochangeoil Offline


Registered: 10/28/14
Posts: 580
Loc: On the road Midwest
http://blog.credit.com/2015/04/new-fico-score-factors-in-utilities-how-often-you-move-113098/

The date of this article is April 2015, and in the details it specifies: This announcement raises many questions about how the score will be used and how it may affect consumers who already have credit scores. FICO did not immediately respond to requests for comment from Credit.com, but hereís what we know so far....


So far, 10 credit card issuers have used the score, but itís unclear how many and what kind of creditors will adopt the new FICO score. It may be of interest to many lenders, because it presents the opportunity to grow business and, as a result, make more money.

Consumers have a legal right to access information about them collected by consumer reporting agencies and dispute inaccuracies, but itís unknown how consumers will be able to do that with the new data. Traditional scores are based on credit reports you can get for free each year. (You can see get your credit scores for free on Credit.com to see how your reports affect your credit standing.)

Perhaps some of the biggest unanswered questions are how many cable, cellphone, electric and gas companies will report this information and whether or not it will impact people who already have scores through traditional models.

In other words, this "new method" is untried, unproven, and may not even prove to be workable...In other words, useless as of 7/23/16. This may change in a year or two, but it may not.

Establish 3 lines of secured credit. 3 lines is generally the minimum what banks, credit unions and finance companies use to determine how creditworthy an individual is. They also want to see at least a year on the same job or 3 years in the same line of work.

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#4158915 - 07/23/16 03:33 PM Re: How to build credit with a credit card [Re: Nick1994]
VeeDubb Offline


Registered: 08/15/02
Posts: 2435
Loc: Indiana
The key is to never have late payments. At minimum, make the minimum payments on time. Then over time as your credit improves, start applying for other credit cards to build your credit capacity. Aim for reward cards (with no annual fees) in particular because you reap benefits.
_________________________




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#4158923 - 07/23/16 03:46 PM Re: How to build credit with a credit card [Re: Ihatetochangeoil]
itguy08 Offline


Registered: 09/15/11
Posts: 3227
Loc: Somewhere
Originally Posted By: Ihatetochangeoil

In other words, this "new method" is untried, unproven, and may not even prove to be workable...In other words, useless as of 7/23/16. This may change in a year or two, but it may not.


Or like all things FICO they are not talking and keeping it all a mystery. It certainly can't hurt and may even help if your utility reports.

Best thing for anyone to do is go to www.annualcreditreport.com and get your reports. You get 1 per yer per agency (there are 3) so pull one every 4 months from each agency and you can see what is in it. It won't tell you your FICO score (many credit cards now do that as a service) but will see exactly what they have on you and what is and is not reported!

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#4158925 - 07/23/16 03:50 PM Re: How to build credit with a credit card [Re: Rolla07]
Ethan1 Offline


Registered: 12/29/14
Posts: 1632
Loc: 'murica
Originally Posted By: Rolla07
Keep it under 60% if you can but it wont matter if you pay in full at months end anyways. Only if you hold a balance you should be under 2/3 of the limit to reflect available credit vs used credit. Tons of factors are involved however. If you keep 0 balance.. Spend whatever you can afford to pay off.


That is NOT how credit utilization works crzy

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#4158930 - 07/23/16 04:01 PM Re: How to build credit with a credit card [Re: Nick1994]
eljefino Offline


Registered: 06/15/03
Posts: 32637
Loc: ME
Why are people trying to manipulate their credit score into being better? I started with a stupid $500 unsecured card when I was 19 and got all the credit I ever wanted and a phenomenal score as well. It's just a thing that happens, don't try to get inside the banks' heads.

Buy everyday stuff on credit, pay the card off every paycheck using online banking so you don't get too deep in the hole. All the churning will hook you up.

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#4158936 - 07/23/16 04:08 PM Re: How to build credit with a credit card [Re: Nick1994]
Nick1994 Online   content


Registered: 02/19/13
Posts: 10113
Loc: Phoenix, AZ
I probably was unable to get approved for anything in the past because I wasn't working, I'm a college student. I just got a job so I'm sure that would help with applications for new cards. I've tried department store cards and gas station cards,maneuver approved.

I checked my credit a few weeks ago on Credit Karma. 580 because I've never used my credit, although I have $5500 in student loans and it says I've made 18/18 payments on time for them (I've never made a payment for them though, as I'm still a student). Maybe after a few months of using this card I'll apply for a regular credit card as well.
_________________________
2015 Hyundai Sonata 2.4L 79k PU 5w30 & OEM
2000 Toyota Camry 2.2L 228k M1 AFE 0w30 & Wix
1996 Jeep Cherokee 4.0L 146k M1 HM 10w40 & Fram Ultra

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