Just got a credit card, $1500 credit limit - best way to boost credit score?

[phatj]

I just received my very first VISA card (I just turned 18). It's pretty nice, 2% cash back on all purchases, and $1500 credit limit.

My question is, what is the best way to boost my credit score (I think it is called FICO (?))?

Should I,
a) Spend lots each month and then pay bill in full each month (Like ~$1000 in payments each month)

or,

b) Spend like $100, pay the bill in full that month, and then put it away?

I have read mixed opinions on which method boosts your credit score most. I do a lot of spending/earning in any given week, so it would be relatively easy for me to spend $1200 in a month and then pay the full $1200 off at the end of that month. Any advice/suggestions would be very appreciated.

Additionally, would it be beneficial for me to sign up for 1 or 2 more cards? There is no problem at all with me paying any amount I charge in full at the end of each month. I just want to establish & build my credit early. I forgot to mention - I also have a Sprint PCS cellular phone plan in my name - that should help my credit as well (I think). Thanks.

edit: What other credit cards would you all suggest I apply for? I would enjoy cards that offer cash-back, and one that won't give me a $300 credit limit. Are there any cards that I would have a high likelihood of scoring over $1,000 in credit, as I did for the aforementioned VISA? Thanks a million.

 

[Dulanic]

Honestly your spending habits make no difference, all that shows on your credit report is if you have ever been late. As long as you pay on time each and every month it wouldnt matter if you paid nothing or you paid $1000. I have a capital one account that hasnt been used in 3 years, but I keep it around because it is my oldest card, and the longer your credit history the better.

2 or 3 cards is also a good thing, having a few cards shows other creditors are willing to lend you money, and raises your score. Currently I have a Target Card, Kohl's, Capital One, Bank of America Plat, and Providian. Originally my score was 650 with Cap One and Kohl's.... after adding the other 3 after a few months my score went up a good amount, I am now past 700 score. Just keep in mind every inquiry will hurt your credit score, so dont apply to too many cards, do ones you know youll get, like Target and Kohls are easy to get cards.

 

[NutBucket]

Just be responsibe. About the only "surefire" way to boost your credit score is buying a house Use your card wisely, don't get in over your head and don't miss payments, even if they're just the minimum amount.

Remember, its a credit history. You need to have a long record of being responsible and there aren't short-term schemes that can do the same.

 

[andylawcc]

just pay your bills on time. and slowly yet steadily your credit score will increase.

I went to a toyota dealer a long time ago and the salesperson told me up front after I asked him about financing. He said, "Do you have a credit card?" Yes I replied. "and how long have you hold it for?" I said 2 years or less. He then told me straightforward that my score will not be adequate unless I would opt for a 10.99 APR. He said anything less than 3 years would mean your credit score has not been built strong enough.

 

[astroview]

Ok so why do you need a high FICO score that badly anyways? And why are you going to go out and buy lots of stuff you probably don't need to raise a FICO score you also probably don't need?

I'm in my 20s and I don't give a damn about my FICO score. Just don't carry a balance, pay off the card at the end of the month, and you'll be fine. When the time comes I'll be able to get a loan.

 

[Nebor]

Originally posted by: astroview
Ok so why do you need a high FICO score that badly anyways? And why are you going to go out and buy lots of stuff you probably don't need to raise a FICO score you also probably don't need?

I'm in my 20s and I don't give a damn about my FICO score. Just don't carry a balance, pay off the card at the end of the month, and you'll be fine. When the time comes I'll be able to get a loan.

Dude, in the grand scheme of things, your FICO score is almost as important as your 3dmark03 score.


BTW I heard Visa cheats in the amortization test they round off after only 5 decimals!!!

 

[astroview]

Originally posted by: Nebor

Originally posted by: astroview
Ok so why do you need a high FICO score that badly anyways? And why are you going to go out and buy lots of stuff you probably don't need to raise a FICO score you also probably don't need?

I'm in my 20s and I don't give a damn about my FICO score. Just don't carry a balance, pay off the card at the end of the month, and you'll be fine. When the time comes I'll be able to get a loan.

Dude, in the grand scheme of things, your FICO score is almost as important as your 3dmark03 score.

I'm aware it is an important number. But you know what is bad money management to me? Unecessary purchases to raise a FICO. Seems penny wise, pound foolish.

Some things to a good FICO score are:
- Paying bills on time.
- Keeping balances low on credit cards and other revolving credit products.
- Applying for and open new credit accounts only as needed.

That said, I do all those things. So I don't care about my FICO score, b/c I know I'm a good credit risk. Even if a lender thinks I'm not, I'll always be able to get someone to file a suretyship for any loans I take out.

Nice analogy btw, I also don't care about my 3dmark03 score.

So back to the topic at hand. Buy what you NEED with that credit care, not what you WANT. Simple budgeting. Pay off the CC in full and never carry a balance. FICO scores aren't the end all, be all. Saving money is important.

You're 18, if possible put $$$ into a Roth IRA. Thats compound interest would really help you in the long haul, more than a FICO #.

 

[phatj]

The purchases I make are for a (really) small business that I have started. So the previously-referenced purchases would not in truth be personal purchases. I would simply use my credit card to purchase whatever one of my customers pays me for. I would never go around just making purchases to boost my FICO. I just want a good, early start on building credit.

 

[badmouse]

Charge a little, pay it off early. Because it is entirely possible that something bad could happen, and if you're near the top of your limit it's easy to say what the hey, I'll make a minimum payment now and then you're on the downward slope. Why take chances?

Also it is entirely too easy to use credit without thinking. You may not feel that way now, but watch out.

However, if you're using it for business, there's a lot to be said for charging EVERYTHING businesswise and of course, paying it off. That way you have good records of your business costs. Talk to your accountant.

Reasons to have a good FICA: these days, a lot of things are tied to your FICA score. Insurance premiums (I'm going thru that right now). Getting a job. I heard about somebody who was arrested and couldn't make bail partly because of FICA - evidently you can put bail on a credit card these days?

You don't have to go nuts getting a great FICA, but pay your bills on time and don't use credit unwisely.

 

[astroview]

PhatJ, what kind of business do you run? How's it going.

 

[KarenMarie]

My credit report listed every card I have... the highest I ever had on them.. what the current balance was, and if I ever paid late.

My opinion, spend small and pay it off quickly.

 

[Dacalo]

It seems irrational if you are trying to increase your credit score by putting yourself in to debt.

Just try to be financially prudent and spend small and pay it all off

 

[aswedc]

Do you mind telling me what card you got? I'm also 18 and looking for a first CC, but I've noticed most of them don't tell you how much the limit will be before you apply. I'm only looking to have 1 or 2 at most, so I want something nice to start out with. Thanks.

 

[astroview]

Originally posted by: badmouse
Charge a little, pay it off early. Because it is entirely possible that something bad could happen, and if you're near the top of your limit it's easy to say what the hey, I'll make a minimum payment now and then you're on the downward slope. Why take chances?

Also it is entirely too easy to use credit without thinking. You may not feel that way now, but watch out.

However, if you're using it for business, there's a lot to be said for charging EVERYTHING businesswise and of course, paying it off. That way you have good records of your business costs. Talk to your accountant.

Reasons to have a good FICA: these days, a lot of things are tied to your FICA score. Insurance premiums (I'm going thru that right now). Getting a job. I heard about somebody who was arrested and couldn't make bail partly because of FICA - evidently you can put bail on a credit card these days?

You don't have to go nuts getting a great FICA, but pay your bills on time and don't use credit unwisely.

What kind of Insurance are you dealing with. I found out that FICO isn't used for insurance actually.

Insurance risk scores are similar to credit risk scores ? used by lenders to determine whether or not to approve a loan or line of credit ? because both look at your credit information, but the two are not the same thing, says Craig Watts, a spokesperson for Fair, Isaac, and Co., whose insurance risk scores are used by about 300 insurers nationwide....

While both insurance scores and credit scores look at the same five characteristics of a person's credit report, the data are weighted differently. This difference in weighting can swing 5 to 10 percent in each category.

 

[badmouse]

What kind of Insurance are you dealing with.

Small business health insurance, in NJ.

 

[DaWhim]

what card you got? i would like 2% cash back as well!