How can a starter credit card help you build credit? | Chase (2024)

FAQs

How can a starter credit card help you build credit? | Chase? ›

Just pay off your credit card bill in full and on time each month, and the card issuer will report your payments to the credit bureaus. By paying in full, you also won't have to pay interest. Your payment history makes up 35% of your FICO credit score, so this is one of the best things you can do to build your credit.

Just pay off your credit card bill in full and on time each month, and the card issuer will report your payments to the credit bureaus. By paying in full, you also won't have to pay interest. Your payment history makes up 35% of your FICO credit score, so this is one of the best things you can do to build your credit.

While opening and using credit cards can be a good way to build credit, they're not the only option. Loans and other types of accounts can also help if they're reported to the credit bureaus.

When you're starting out in the financial world—you need credit to qualify for a loan, where do you start? Credit Starter is designed for Members who need an opportunity to establish credit with the potential to achieve a favorable FICO score.

Credit-builder loans allow you to take on a small amount of debt, make regular payments on time and demonstrate that you're a reliable borrower. However, this also means that missing even one payment jeopardizes your hard work. Late payments appear on your credit report after 30 days and remain there for seven years.

Generally speaking, a good credit score is 690 to 719 in the commonly used 300-850 credit score range. Scores 720 and above are considered excellent, while scores 630 to 689 are considered fair. Scores below 630 fall into the bad credit range.

Open a Student or Secured Credit Card

You can open your own credit card starting at age 18. College students can apply for a student credit card, which is often easier to get approved for as a first credit card than a regular card.

How much does opening a credit card raise your credit score? ›

Answer: Adding a 2nd credit card account will substantially improve your score (about 7 to 15 points). Scenario: You have more than 4 accounts, but have 2 credit cards. Answer: Opening more credit card accounts won't immediately increase your scores – in fact, they will likely drop a bit.

The cruel irony of credit cards is that the people who actually need them tend to be most vulnerable to their risks. If, on the other hand, you have the money to pay off your balance every month, the ability to earn rewards and build a good credit history may justify opening an account.

If you're just starting out, a good credit limit for your first card might be around $1,000. If you have built up a solid credit history, a steady income and a good credit score, your credit limit may increase to $5,000 or $10,000 or more — plenty of credit to ensure you can purchase big ticket items.

A starter credit card is also called a beginner credit card or a first credit card and is designed for people with limited or no credit. The best starter cards tend to be secured credit cards and student credit cards as both are easy to get with no credit history and report monthly to the credit bureaus.

Answer: Opening another credit card could help the score a little (about 4 to 6 points). Scenario: You have less than 4 accounts, (1 credit card, 1 car loan and 1 utility account). Answer: Adding a 2nd credit card account will substantially improve your score (about 7 to 15 points).

History isn't instant. If you haven't used credit before, it usually takes at least six months to generate a credit score – and longer to earn a good or excellent score.

According to Experian®, one of the three major credit bureaus in the U.S., “You typically need three to six months of credit activity recorded there before a score can be created.”

Usually, credit cards are reported at the end of the billing cycle, after your first payment is due. However, it generally takes about 3-6 months of activity on the account, before you see an improvement.