I received a Capital One VISA credit card today with a limit of $500. In 2006-2009 I paid the bills using checks, and I was late about 25% of the time. I have been working a stable job for just over a year, and have plenty of cash in the bank. It is my goal to build credit as fast as possible, as high as it will go.
I've done some rudimentary research and found a few things. Paying your bills on time will help your score, and using too much of your limit is negative.
I live in a house with 3 guys, so the utility bills are kind of up there. I've discussed moving the bills into my name, but I now realize that with a limit of $500, it will probably not reflect well if I'm spending $300-400 each month. I initially thought that was the objective, but apparently being a low spender is preferable. What does your experience say?
Another trick that one website suggested was to talk to a bank about the desire to build credit, using a personal loan. I think the idea is that they would loan you the money, which you would buy off using the credit card, leaving you with more credit and the bank with no risk. I am probably NOT understanding this right, and I will have to ask my partner about this idea.
My partner told me that two things are stopping him from VERY high credit. One is that he has never been in a situation of debt, and so the creditors do not know how he would react (kind of stupid.) The other is that he only had experience with one credit card. Thus, he got two. His financial advisor told him that two is the best number, because three or more raises suspicions of using cards to pay off other cards. Thoughts?
Any other suggestions on how to build credit are very appreciated.