What is the fastest and most efficient way to build credit from nothing using a credit card?

Question

I just recieved my first credit card in the mail and I just wanted to know what the credit bureau actually looks at. Is it that my bill is paid on time? How much of my limit is used at the time? If I pay over the minimum? What is the best way to build?

Answer 1

First of all, keep them bills paid on time. This is most important. Next, keep your balance at 30% of limit or lower. If your limit is, say, $1000 keep your balance at $300 or less.

Paying over minimum is actually a good thing since it will keep your balance low and you never know when things might take a downturn in which case you may just have to pay the minimum.

One other thing, be sure to check your credit report annually with each of the three major credit bureaus. This is for two reasons 1) your own security and 2) to ensure that payments, balances and limits are getting reported. Some creditors are notorious for skimping on this as it costs them money and some of them want to keep you in "sub-prime" in order to milk more money off of you in form of higher interest.

You are allowed one free credit report from each of the major bureaus per year.

Now, if you need to build great credit you will have to go a little farther. You have taken the first step. Down the road you'll need to establish a mix of credit types as you continue to build history.

Answer 2

Always. always pay your bill on time. Late payments negatively effect your credit score. You should maintain low balances. The way to do this is to use the card sparingly and pay the balance in full before the billing cycle is up. You avoid interest this way and your balances are always reported as 0 to the credit bureaus. Within 6 months you will probably receive a credit limit increase. You want a very low percentage of your available credit to be in use. This will build your score.

Answer 3

use it and pay off the balance every month.

they like that a lot.

Answer 4

Just pay on time, you don't have to pay in full.