I just got a credit card I bought something, I have enough to pay at the end of the month?

Question

how long does it take to establish my credit? If I pay in full each month ithout missing a payment, thanks I just want to get informed!

Answer 1

Always pay it off in full if you can -- with a notable exception that I will explain below. First, it shows you're very responsible with money. Creditors love that. Second, it shows that you have enough money in the bank to pay off whenever you choose. Creditors REALLY love that.

Now, there is one exception to this rule, and I use it regularly. You should leave a balance on your card for two months of each year. (Assuming they're not charge cards like American Express, where you MUST pay off the balance each month.)

So why on earth would you want to leave a balance? Creditors are a finicky bunch, and they want to know that they'll make enough money off of you to make you worth their time. If you continuously pay off the balance each and every month, they will become aware of this pattern. It actually hurts your credit ratings. Therefore, leave a small (10% of available credit) balance about twice a year. Then pay that card off in full the next month.

Just remember the three rules: NEVER be late on a payment. NEVER go above 75% of available credit. NEVER charge more than you can pay off in full.

If you can do those, you'll do fine, and your credit score will soar into the 700s. It takes about five years to establish your credit rating, and between now and then, it will fluctuate a bit. Don't panic when you see that. As long as you're close to or above the 700 mark, you're in great shape. As far as getting the best interest rates and offers, you don't get any better than 720 (under the current scoring system -- this is about to change).

For example, my rating is about 750 and my wife's is about 720 (hers is lower because she doesn't have much credit in her name, and she's a stay-at-home-mom). Since our scores are so high, we get the best offers for credit. IE, we were able to refinance the house at 2% less interest than when we bought it. Big deal, right? Nope -- that 2% is saving us over $350/mo! That's over $100,000 over the life of the loan that we don't have to pay! Instead, 50% of that savings is going into our retirement fund.

If you can keep your credit nose clean, you'll be in great shape for the rest of your life. When you go to buy a house or car, you'll find yourself paying a lot less interest and saving TONS of money!

Answer 2

The credit card is already reported by the credit card company to the 3 credit bureaus. It states when you opened the account, the credit limit, the type of the account, and the company who you have your credit card with.

So now all you have to do is to maintane good standing (pay on time, pay off the card on time) and you are pretty much on your way to building your credit.

The way to help build your credit is to call your credit card company after a year and ask for you to have a higher credit limit. This may seem bad because you can spend more, but if you manage it right it's good.

It'll be reported that you have a higher credit limit on your credit report as to the low one, that you never paid late, always on time. This will reflect on your credit report.

You might want to try in the future to get 1 more credit card BUT DO NOT USE IT. Put it away. It will also reflect that you have more credit and it will reflect that you have 2 credit card accounts. It'll reflect in good standing.

That is the key to building your credit using credit cards.

That way when you need to get a loan or you are looking for credit by another company. Your credit is there, it's build, it's positive and you will most likely get what you are looking for. Good Luck.

Answer 3

If you pay in full, without leaving a balance behind, you will have AAA credit in no time.

While I don't believe in credit cards (wayyyy too easy to get in trouble with), they can provide, in the right hands, a simple and fast way to get a good credit rating. The trick is, buy something small, pay it off fast.......do that a couple of times, then cut up the card and return it to the company.

You will be getting offers for credit left and right after that. Just don't let it go to your head, ok?

Answer 4

Keep paying it off at the end of every month. It will take at least 6 months for it to reflect on your credit rating, most likely a year.

Answer 5

Paying in full is always a good choice. You should see a difference in your credit rating in about a year. Keep paying off your card in full!!! your credit card company will also see your [paying it off in full and most likely extend your credit, which also looks good.

Answer 6

actually, I believe it starts almost as soon as you start paying it off, just as long as you keep it and keep it paid for you will continue to have good credit and it will build into more credit for larger loans/lines of credit.

Answer 7

invest the money, let some credit accrue, not that much, just some, paying INTEREST will get you some credit faster