Hi; I'm new here, and had a a couple questions, two about applying for a credit card. I recently graduated from college, and have an extremely short credit history. I have a student loan, which I am in the process of paying back. My only other credit comes from my American Express card which I have had for about six months, and the fact that I'm an authorized user on my father's longstanding account with the same company (though I don't actually use it). I recently pulled my credit report, which has no late payments. However, I've been learning about credit and personal finance and would like to improve my credit history by actually having more than three things on it. I'm considering applying for a Visa card through my credit union, wherein lies my question: what credit limit should I request? I think I'd be approved for the lowest limit ($500) without issue, as my short credit history is good and I have a steady income, but would prefer a higher limit if possible. According to a couple of estimators, my credit score is somewhere around 705 to 710 (with the marks against me being few open accounts and short history). Any advice on what would be a reasonable limit to ask for? Second, I've been wondering whether applying for a second card within about six months of the first would hurt my credit significantly. I don't anticipate needing to take out a loan of any kind in the near future, but I may need to move to a new apartment next year when my current lease is up. Does anyone have an opinion on whether I should wait a while before starting a second account? Third, I've read that credit utilization works differently with charge cards than it does with credit cards. I've read some sources that say charge cards do not impact your utilization score, and some that say they do, using the highest amount you've ever charged as your "limit". Can anyone weigh in? Thanks! (and sorry for the long post)
1.) You can't really request a specific credit limit- the credit issuer will determine what to offer you based upon your FICO score and the data you provide in your application. If the limit they give you is low, then you'll have the opportunity after several months of use to request a credit limit increase. 2.) Applying for the 2nd card after about six months is perfectly fine. You credit score will take a small ding (maybe 5 points) for the hard pull, but it should then recover quickly and even improve as you lower your CU ratio and increase positive payment history. 3.) Depends on how the credit issuer is reporting to the CRAs. If the account is reported as revolving, then the FICO model will include it in the CU ratio and use either the limit or high balance, whichever is reported. If neither are reported, FICO won't include it in the calculation at all.
Thanks for the help! For the first question, the reason I was asking is that there's a little box on the application for what limit you're requesting, and I wasn't sure what I should put.
Then I would just put the highest one. They'll still offer you whatever you qualify for, and you obviously want the highest limit possible to help improve your CU ratio.
