What is a credit score?? i have a ZERO credit (cause im 18) I plan on paying everything "in full" and on time

Question

... What would my credit look like if I use my credit card a few times (which i have already done) and pay my bills instintly (on-line). Will it start low (200-300) and slowly but steadily rise??

And another thing, my credit card limit and my card, i know that both are "premire" and are not too impressive, how do I get my credit card limit to increase?? And how do I upgrade my card??

Thanks in advance and any usefull answers to any of the questions above will be greatly appreciated.

Answer 1

I first got a credit card after I graduated from college.  I checked my credit score within a week of getting it and it was 620.  I don't know what factors it considered, but I had never bought anything on credit before (other than student loans).  It goes up rather quickly if you use the card a lot.  I have been putting about $500 a month on it for a couple years now and it's at 750.  Sometimes I pay it off that month and sometimes a let a balance grow.  The credit card is the only credit I have besides student loans.  

I think the notion that you have "no credit" is kind of misleading.  It doesn't represent a complete absence of loanability.  It's just that your untested.  You have nothing bad, but you also have nothing good.  I think you're still better off than people with bad credit.  200-300 is very bad credit.  I would be surprised if you started anywhere below 500.  I think the best way to think of it is credit is basically a -10 to +10 scale.  You start at 0, right in the middle.  People who don't make payments on time fall into the negative.  People who make payments on time go into the positive.  It's not like you start at -10 and have to work your way up.

To increase your credit limit you just have to wait, or get a different card.  My credit card company usually increases my limit every 3-5 months or so.  The increases are smaller at first and get bigger as you build a bigger limit.  My first increase was $700.  My last one was $1500.

To upgrade your card you have to apply for a new card (as far as I know).  The better your credit gets, the more offers you will get in the mail.  I open them up to see what they offer.  Some are better than others, but they all get better and better the higher credit score goes.  Switching cards hurts your credit a small amount, which is why I really don't do it.  It can be beneficial, though.  A lot of companies offer cards with 0% APR on balance transfers for a specified period of time.  If you have a large balance you can't pay off for a little while, it can save you a lot of money to transfer the balance to the interest free credit card until the introductory period runs out.