I want to share with you how I went from having a none credit score to a credit score of 726 in 10 months. You heard me right, none. Credit. Not bad credit not zero credit but none credit. See I grew up with one philosophy about money. If you don’t have the money in your bank account or in your wallet don’t spend any. If there’s something you want to buy you save up for it. You said the money you saved up aside and you save up for another two months. That way when you spend the money to buy whatever it is you save it up for, you’re not flat broke.
Pro tip: I would apply Monday through Friday. That way if there are any issues you can call customer service.
You’re approved. Now what?
Once you are approved you will be asked to make an initial deposit. This is called a security deposit. Depending on your credit score you could be asked to pay nothing or you could be asked to pay up to $200. For me, since I had none credit, I had to pay Discover $200. Capital One only required me to pay $99. Thank you Capital One.
To recap: I had to place $300 down to have a credit line of $400. Split between two card companies.
That’s it. That’s all it takes to get you started on building your credit. 10 minutes of your time, a quick decision, and a little bit of money down as a security deposit.
Now The Waiting Games takes place. It took three and a half weeks for me to receive both of my cards. Now that you have your cards there are two things you never should forget.
Two things to remember about your credit score
The two things you should never forget our how much you owe and the date you owe on. These go together and getting your numbers right is very important when building credit. Each card will start you off with a $200 credit line. It’s very important you remember how much money you have spent already and the balance you have remaining on each card. This is going to come into play later.
Your due date can we found on your statement or by calling customer service. Your due date is very important because that is when you are going to want to have all but a few dollars paid off. I’ll explain why in a minute. I like to keep everything on the same day. Discover will let you change your due date. I changed my Discover due date to match my Capital One due date of the 14th. So now both cards have a due date of the 14th of each month.
My offical credit method
Here is how I went from having none credit to a credit score of 726 in 10 months. I started off slow and only charged $15 to each card. I use my cards between the 20th of the current month and the 5th of the following month. On the sixth of every month, I pay my cards down except for a few dollars. Say $4 dollars. On the 14th of every month each credit card company has little something to report on me. On the 16th of every month, I pay the rest of the balance off.
- Use your cards on the 20th-5th.
- Pay all but a few dollars on the 6th.
- Recieve statement on the 14th.
- Pay the rest off on the 16th.
Why not pay everything right? Because with credit you want to leave a paper trail. But you want to leave a small paper trail. You also do not want to owe more than 9% of your total credit line across all of your accounts. If you have a $400 credit line across two accounts that means you can have no more than a $36 outstanding balance split between all of your accounts. 400/9=36. That’s why I never charged more than $15 each month. If I forget to pay everything I’m still under that $36 mark.
Creditors like to see that you are using your card and you can pay it off. But you want to leave a small balance that way the Creditor has something to report on you. That leaves your paper trail. And that build your credit.
Side note: You want to make sure you leave more than $2 as a balance on each card as a minimum. The very first months with Capital One I had a balance of $0. 89. Capital One paid that off for me and they didn’t report on my credit score for the first month. It didn’t hurt my score but it also didn’t improve it any. so if you have a balance of more than a dollar fifty they are not going to pay it off for you.
So now you know how to get a secured card. You know how to pay your deposit. And we know how much to use each month. What I’m doing here is I’m demonstrating that I will use the card each month for a small purchase. I will pay back everything except for a couple dollars. I will let the creditors send me a statement or a bill. And then I will pay it off within the next couple days.
It doesn’t matter what your credit limit is for each card. You always want to make sure you never owe more than 9% across all accounts. So it’s important to remember how much you owe and the date the money is due.
I went a little extreme. I was going to a lot of Las Vegas Golden Knight Games. Every time I bought a beer, I would use one of my credit cards. I literally drink beer to raise my credit score. Sometimes I would use over $100. But then I would pay everything down except for a couple dollars. I did all of this before the 10th of every month. That way the credit card companies could take up to 3 days to process each payment on my card to drop the total balance down to a few dollars.
On the 14th I would receive my statement via email. Then on the 16th, I would pay the rest of the balance to bring my total down to zero. I always had money in the bank before I used any of my cards. Make sure you are using your cards responsibly. Credit card debt is no joke.