I just got my first credit card. Whats the fastest way to increase my credit score?

Question

I would like to get a car loan, so how long should I wait for my credit to build?

should I pay more than the minimum or pay the whole thing off? would it make a difference?

Answer 1

The best way would be to charge an amount on your card each month that you KNOW you will be able to pay in full and then pay that amount off each and every month before it's due date. Be careful, though...it is SO easy to overspend and have a credit card get out of hand. I would say a year of good credit would give you a basis but it would be up to where ever you are getting a car loan from to determine what is enough. Good luck!

Answer 2

Pay more than the minimum or pay it off completely. People are looking for a history of your 'on-time payments' - not that you had a balance for a short amount of time and paid the balance in full. People use credit reports to find out if you're a good risk or not. The credit reports show your payment history and that proves to others if they want to take a risk with you or not. If you haven't had a credit card for very long then it may take a few years to build the history others are looking for. The best thing you can do (if you've only had a c.c. for a short time) is to have a 'co-sitgner'. You may be able to locate an auto sales lot where you can obtain an auto loan but the shorter c.c. history you have the higher interest rate you will pay.

Answer 3

Having too many credit card will hurt your score whether you use them or not. The best way to increase your credit score is to pay on time, don't charge the credit card to the close or near the max capacity and having only 1 or 2 credit cards. The reasons are when you charge close to the credit limit you become a risk a factor and having fewer credit cards results in reporting to only 1 or 2 credit bureaus. Not all banks, mortgages, car loan people use the same credit bureau. You don't want to have conditions when you do not have any credit history when the banks you bought credit cards from only reported 1 or 3 agencies. Finally, if you pay soon or near the due date does not make any difference. This is black and white. Did you pay before the due date , Keep all 3 but have any more. You are only 18 and don't need to worry about identity theft or credit problems.

Answer 4

Seriously- best thing to do is charge a small, easily manageable amount, like $50 for groceries, on it every month, and then when you get the bill, don't pay it off entirely. Leave a small balance on there, like maybe $15 or $20. Credit bureaus tend to reward this type of credit card use with higher scores because it shows that you are able to manage your debt, and that you are responsible with your card but you actually use it! This is a big deal because your credit won't do anything at all if you just let your card sit there and don't use it. Also, if you were to pay the balance off every month, your credit score would climb, but interestingly, it wouldn't climb as fast as if you leave a small balance on the card, because the bureaus are looking to reward people who aren't afraid to use their cards a little bit. The credit scoring system is actually a complicated mathematical formula that is known only by bureau insiders, and it is not known exactly which behaviors cause credit scores to increase, but this method I'm telling you has been tested and proven to work. Just don't do what I did and max them out and not be able to pay them back!!! : )

Answer 5

Don't ever be late on a payment, don't ever go over your credit limit and don't start opening other new cards at the same time. Try and pay more than the minimum payment if you can. If possible try and pay off your balance every month. Just be careful and don't get over your head in multiple credit cards -believe me...I did this in college...

Answer 6

Use the card just a little and pay it off completely and by the due date, but do not carry a balance over to the next month. A bank will want to see your activity for 6 months before they label you credit worthy. The card can also ruin your credit, so be smart.

Answer 7

never make just the minimum payment in fact depending on your finances if you can make the initial payment on time then in 2 weeks send in another payment, repeat this process until it is paid off. thats what i did i had a credit score of 500 i used this process and in 8 months i was up to a credit score of 718 good enuff for a low interest loan or major credit cards

Answer 8

In addition to all the comments of using it monthly and paying the bill each month, never use more than 50% of the available limit. For instance if your credit limit is $1000 dont ever have more than $500 charged at one time.

Answer 9

I you use your credit card with in the first 60 days and pay your monthly payments on time with in the next 5 statements your credit card holder should increase your spending power.

Answer 10

Pay it off every month in full. You should probably wait a year or two before getting the car loan.