My strategy for building credit

I briefly mentioned what is credit in this post where I was describing how I applied for SSN. Well, I read many tutorials and watched many videos, how to build a good credit score from scratch (without any history) Below is my strategy for the first six months.

My Strategy

In order to build good credit, I will use two secured credit cards. The Secured credit card means that the bank will give you a credit line but you have to deposit usually the same amount of money to a bank that is your credit line. Let’s show an example: Your limit is $1,000, then you have to deposit to bank $1,000. After some time (typically 6-12 months) bank reviews your history and gives you your deposit back and you get a regular credit card if the bank sees that you are a responsible borrower.

What will I do to build good credit?

  • use only 10-30% of credit line from both cards
  • Pay my credit cards off in full every month
  • Pay my credit cards on time every month
  • Have two secured cards from different banks or credit unions
  • One card is Visa and the second is Mastercard

Bank of AmericaSecured Credit Card – Visa

I applied for a secured credit card in Bofa with a limit of $1.000 three weeks ago. Today I increased my limit to $5.000. I called the bank and the banker asked me about my monthly income and rent I pay. I also already had enough funds on my checking account (at least $4,000) because how I said the bank will take this money as a safe deposit.

  • no monthly or annual fee
  • $5.000 limit – will use only $500-1,500 every month
  • 3% back from gas
  • 2% back from grocery purchase
  • 23% Interest – I don’t care about interest because I will pay the whole credit in full every month

Capital OneSecured Credit Card – Mastercard

Tonight, I also applied for a second card from Capital One entirely online. They wanted me to send a copy of my passport and a copy of my SSN because I am not a US citizen or resident. Now I am waiting for the result from Capital One.

  • no monthly or annual fee
  • $1.000 limit – will use only $100-300 every month ($1,000 was max limit at the moment)
  • 27% Interest – I don’t care about interest because I will pay the whole credit in full every month

I didn’t really explain my strategy but trust me I spent a couple of hours putting this strategy together so let’s see if is a good strategy in a couple of months!

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