Establishing credit?

My credit score is 524 & I've applied and been approved for the Capital One Secured Mastercard. I paid my minimum deposit of $99 with a credit limit of $200. How often should I use the card. How much should I spend? Would it be okay if I paid the bill early or when it's due? This is my first time

My credit score is 524 & I've applied and been approved for the Capital One Secured Mastercard. I paid my minimum deposit of $99 with a credit limit of $200. How often should I use the card. How much should I spend? Would it be okay if I paid the bill early or when it's due? This is my first time dealing with a credit card so any other tips would be appreciated. Thank you.

– I have Fifth Third as my bank and someone has told me that getting another secured card from them would be good or Discover. & then in a couple months to apply for a store credit card like Walmart, JC Pennys ect. As long as your paying all the bills on time would this be a good idea or should I just stick with the one?

– My husband has no credit history at all so this is for him too. We both have jobs and make a little over $2,000/monthly.

Other answer:

Hi, I work as a loan officer for a credit union and do personal financing as a living.

A good portion of your credit score is comprised of 3 things. Derogatory things (collections, judgements, unpaid) payment history, and amount of your revolving credit you are using.

If you are looking to build credit I would pull my free annual credit report and go over it make sure there are no collections on it.

In response to the credit card question, you won't want to use more than 30% of your revolving limit, going over 50% can reflect negatively on your credit. So if your limit is $200 not using more than $60 is best. I recommend people put on a bill they have to pay every month, say your heat bill on their card and when the bill comes in, pay off their credit card.

I also recommend leaving fifth third bank. I would look at a local credit union who will help you and can give you personalized advice and who offer (for free) a credit monitoring service. I also recommend not getting the 2nd credit card yet. It will only show up as another pull on your credit and you don't need it. In reality you should have 3-4 cards but should accumulate them slowly, over 5-10 years. Opening cards you don't need will only hurt your credit. I personally would wait a year. If you manage the one you have now that should be fine.

Don't close the card another thing that effects credit score is opening and closing accounts, so even if in a year or so you get a better card that isn't secured and offers some kind of reward keep the secured one even if you don't use it until you had both a year or so.

Make small purchases every month. Keep your outstanding balance and utilization ration below 30% of your total limit. Which means in any month don't use beyond 30% of $200 (that is $60). Whenever you receive your bill, pay it off in full. Paying before or on the due date will not make any difference. However, if you pay after the due date you will be marked late and will be charged with late fee and interest on the outstanding balance.

Be patient with your finances. Use this secured card for at least six months to one year and then view your credit score again to track the positive changes in it. As for your husband, he must begin with a secured credit card too and slowly work his way up to a good credit score.

Always keep a track of your score by regularly viewing your report yourself. Make sure you have the errors corrected. Avoid applying for too many cards and loans in the interim. With every loan or credit card application there is a hard enquiry on your report, further pulling down your score.

Hope this helps!

So, just to clarify, you are not ESTABLISHING credit, you a REBUILDING credit. If you were establishing credit, you would have a 0 score, not a 524. A 524 credit score tells us that you have multiple accounts that were not paid.

Now that we got that out of the way, yes, establishing more than one credit card account will help your credit score; however, many lenders look down on store credit cards, and that can actually hurt your credit.

I also wouldn't advise opening too many of them in a short period of time, as the inquiries would drag your score down.

As far as using the card, I always advised my clients (I am also a loan underwriter for a credit union) to use the card for small purchases, such as lunches or gas purchases, and paying the card off in full each month. If the credit card company will tell you, I would ask them what day of the month they report your balance to the credit bureau, and have the card paid in full the day before that date. The typical "rule of thumb" is to keep your utilization below 30% of your available limit, but I advise not carrying a balance from month to month. You can easily build credit, and you don't need to be charged interest to do so.

Bigger banks typically charge annual fees for their secured cards, I would advise looking to your local credit union (and no, I'm not just saying that because I work for a credit union) for the secured card, as many of them do not charge these fees.

Most importantly, be patient. It will take time for your score to go back up.

Once you have your secured card, use it often for your purchases but pay the bill off every month, on time and never missing a payment. After a few months apply for a real (unsecured) card from a bank (or a gas card, or department store card), and use it the same way. After a while, your credit limit will be raised, which will increase your credit score. When you make your payment is not important and does not affect your credit, as long as you are not late and don't miss payments.

Building good credit is a slow process but damaging that credit can be almost instantaneous, such as with a late payment.

You should spend between $0 and $20 (it's best to have the amount in use be less than 10% of the limit).

It is okay to pay early.

Trying to get another secured card from them would be a very bad idea. You build the most credit with only one card. You lose credit by applying for another (whether or not you are approved).

Elaine M:
Pay it in full when you get the bill, you don't need to do it before the bill comes. If you can't pay all of it, at least pay the minimum amount listed.

I'd use it two or three times a month on general things, NO high ticket items. Don't get a second card, stick with this one. DO NOT send in the payment late, or on the day before the payment is due (the mail may not deliver it in time). Make sure to pay when you receive the bill, that gives you a good 2 weeks without having something be delivered too late in the mail.

With a score of 524 I think you have negative credit items on your report. Go to and pull your credit report.
If those items are nearing 5-7 years old you may want to let them go as they should fall of your report soon.
If they are recent you may consider trying to pay them off or settle. NOTE if you make any payment that re-sets the 7 year clock, so some small payment is the worst thing to do.
If you settle get EVERYTHING in writing, get organized, then pull credit report in 2 months to see if settlement is listed, if not then dispute the item with the company you paid and then the credit bureau.
You can pay early or on the due date. Paying by the due date will avoid interest charges. Paying the minimum by the due date will avoid late fees, if they are charged. There's no benefit in terms of your credit score to carrying a balance.

You don't need to use the card each month. Even if you only use it every few months, they'll still report "pays as agreed" to the credit bureaus.

Use it at least once a month, spending a total of about $60 a month, and pay off the statement balance every month. Be sure to pay on time. Paying early is ok, but won't change anything. Stick with just the one card for now.
credit scores depend on you paying timely and not behind, meaning if there is a minimum payment no less than that amount
of course paying minimum does not mitigate that additional charges will be made on the amount you left unpaid so your bill will get bigger all the time
being late, or behind or not paying at all will adversely affect your credit score

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