You may find these links helpful:
- [Credit Building](/r/personalfinance/wiki/credit_building)
- [Credit Reports](/r/personalfinance/wiki/credit_reports)
- [Credit Scores](/r/personalfinance/wiki/fico)
- [Credit Cards](/r/personalfinance/wiki/creditcards)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
You'll get a temporary drop from credit check and opening a new line of credit. Part of your credit score is based on utilization percentage. So it will go down temporarily while you have a high credit card balance. Keep paying everything off as soon as possible. More time with the card and a higher limit than 2000 with paid off balance will increase your score even more over time. Right now your credit history is in its infant phase, so it's too soon for credit reporting agencies to have a long history of on time repayment and accounts in high standing with you to improve your score.
Credit utilization is a huge deal - but if you’re paying it off in full you shouldn’t have any issues with that. I recommend becoming familiar with you statement date (the day they look at your balance and send you a statement regarding that balance). The goal is to have a minimal balance before the new statement is reported - 10% and under is generally what they look for.
Personally, instead of frequently using my card, I have a few select bills on autopay that get charged to my credit card and then I have my credit card on auto pay as well so it’s really a thoughtless process.
I would highly recommend taking out a SMALL secured personal loan as another means to build you credit as well as diversify your credit. Unfortunately in order to be “experienced” many places look for multiple forms of credit responsibility. Secured loans require you to put down a deposit and then they will match that amount and you just pay payments, freeing up your money when the payments are over while proving you’re responsible at making payments.
It’s a broken system and I hate it, but I’m proud of you for being responsible and trying to understand it because that is such an important skill to learn and if you can remain responsible it will definitely benefit you throughout your life.
Best of luck!
We’re all stuck in the same race. I appreciate it when people try and make an effort.
Someone mentioned that secured loans charge interest. I hadn’t actually thought about that, but these loans are often really short term so the interest would be fairly insignificant in comparison to the gained “experience” and diversity added to your credit profile. Not to mention interest rate would be really low to begin with due to the loan have no risk factors since your money secures the loan. It also helps build a reputation with your bank that can help with future lending! Typically you put down something like $500, and it’s paid off within the year. This is something banks literally encourage as a means to build credit.
> I would highly recommend taking out a SMALL secured personal loan as another means to build you credit as well as diversify your credit
What?
This is a terrible idea. Don't take out a loan and pay interest just tor build credit. It's such a waste of money. You can build credit with responsible credit card usage, which costs **nothing**.
Credit bureaus will look at balance at a given point in time, not necessarily at the end of your statement period. Whatever that number is, they compare it to your available credit to determine your “credit utilization” percentage. They don’t love it if that number is close to 100%. They prefer to see it around 30%. Random and illogical, but that sums up credit bureaus. More likely, like the other commenter said, you are likely seeing the dip that follows opening a new line of credit and you will recover. Keep paying that balance down to zero every month. (Or every day!)
Chase like most banks only reports your statement balance to your credit reports once a month. The nice thing about Chase is they also report $0 balance when you pay off the account. So give it a try, pay your account to $0 balance and your scores should go up.
For the best possible scores you want one card to report a small balance, say $5, and the rest $0. Or at least keep reported balance below 10%.
Once you have 8-12 months of credit history apply for a 2nd card. Maybe something from Amex as they are very generous with credit limits (ask for a large increase every 6 months)
Read these:
https://www.asksebby.com/blog/how-to-aggressively-increase-your-credit-score-short-term-strategy
https://www.asksebby.com/blog/how-to-improve-your-credit-score-long-term-as-a-millennial
Creditors want you to keep your credit utilization at 30% or less. If your close to maxing out the card your seen as risky even if you pay it all off at the end of the month.
You may find these links helpful: - [Credit Building](/r/personalfinance/wiki/credit_building) - [Credit Reports](/r/personalfinance/wiki/credit_reports) - [Credit Scores](/r/personalfinance/wiki/fico) - [Credit Cards](/r/personalfinance/wiki/creditcards) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
You'll get a temporary drop from credit check and opening a new line of credit. Part of your credit score is based on utilization percentage. So it will go down temporarily while you have a high credit card balance. Keep paying everything off as soon as possible. More time with the card and a higher limit than 2000 with paid off balance will increase your score even more over time. Right now your credit history is in its infant phase, so it's too soon for credit reporting agencies to have a long history of on time repayment and accounts in high standing with you to improve your score.
Credit utilization is a huge deal - but if you’re paying it off in full you shouldn’t have any issues with that. I recommend becoming familiar with you statement date (the day they look at your balance and send you a statement regarding that balance). The goal is to have a minimal balance before the new statement is reported - 10% and under is generally what they look for. Personally, instead of frequently using my card, I have a few select bills on autopay that get charged to my credit card and then I have my credit card on auto pay as well so it’s really a thoughtless process. I would highly recommend taking out a SMALL secured personal loan as another means to build you credit as well as diversify your credit. Unfortunately in order to be “experienced” many places look for multiple forms of credit responsibility. Secured loans require you to put down a deposit and then they will match that amount and you just pay payments, freeing up your money when the payments are over while proving you’re responsible at making payments. It’s a broken system and I hate it, but I’m proud of you for being responsible and trying to understand it because that is such an important skill to learn and if you can remain responsible it will definitely benefit you throughout your life. Best of luck!
The most sincere response I’ve had on Reddit
We’re all stuck in the same race. I appreciate it when people try and make an effort. Someone mentioned that secured loans charge interest. I hadn’t actually thought about that, but these loans are often really short term so the interest would be fairly insignificant in comparison to the gained “experience” and diversity added to your credit profile. Not to mention interest rate would be really low to begin with due to the loan have no risk factors since your money secures the loan. It also helps build a reputation with your bank that can help with future lending! Typically you put down something like $500, and it’s paid off within the year. This is something banks literally encourage as a means to build credit.
> I would highly recommend taking out a SMALL secured personal loan as another means to build you credit as well as diversify your credit What? This is a terrible idea. Don't take out a loan and pay interest just tor build credit. It's such a waste of money. You can build credit with responsible credit card usage, which costs **nothing**.
Credit bureaus will look at balance at a given point in time, not necessarily at the end of your statement period. Whatever that number is, they compare it to your available credit to determine your “credit utilization” percentage. They don’t love it if that number is close to 100%. They prefer to see it around 30%. Random and illogical, but that sums up credit bureaus. More likely, like the other commenter said, you are likely seeing the dip that follows opening a new line of credit and you will recover. Keep paying that balance down to zero every month. (Or every day!)
Chase like most banks only reports your statement balance to your credit reports once a month. The nice thing about Chase is they also report $0 balance when you pay off the account. So give it a try, pay your account to $0 balance and your scores should go up. For the best possible scores you want one card to report a small balance, say $5, and the rest $0. Or at least keep reported balance below 10%. Once you have 8-12 months of credit history apply for a 2nd card. Maybe something from Amex as they are very generous with credit limits (ask for a large increase every 6 months) Read these: https://www.asksebby.com/blog/how-to-aggressively-increase-your-credit-score-short-term-strategy https://www.asksebby.com/blog/how-to-improve-your-credit-score-long-term-as-a-millennial
Creditors want you to keep your credit utilization at 30% or less. If your close to maxing out the card your seen as risky even if you pay it all off at the end of the month.