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I had a question regarding building credit. I have no past credit history, and just opened a secured card with a $200 credit to help me build mine (yes, it reports to all 3 bureaus). I currently have no use for credit, but would like to build it in case I want to buy a house somewhere down the road.

I've read that I should be keeping my debt below 25-30% of my credit, which is no problem. I am curious, however, if it makes a difference how much debt I keep, below that threshold (as long as I'm paying on time obviously). Is there any difference between my spending $0.10 a month vs closer to that $50-60? Should I spend nothing, to keep my balance at a constant 0? I'm curious what the absolute best practice I can use on this card to build credit quickly is, as well as how quickly at that rate I should expect my credit to rise from no history.

Advice appreciated!

carbide20
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    You should keep your debt as close to zero as you can, period. You don't need to pay interest to build a credit history; pay off the card in full every month. – keshlam Sep 27 '15 at 15:22
  • As I said, I'm no expert on the subject yet, but I really can't accept this answer. It doesn't seem at all reasonable to me that all I have to do to be granted hundreds of thousands in a mortgage years down the road is open cards now and not ever touch or utilize them. It doesn't feel that this is demonstrating anything positive to the credit card company (except length of time card has been opened which I know factors in), just that it isn't demonstrating anything negative. It shows nothing of my spending habits either way, just that I probably use a different card. Why would they want that? – carbide20 Sep 27 '15 at 20:16
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    Further, I'm reading things online like: "Unfortunately, it’s not enough to open a credit card – secured or otherwise – and sit on it. If you don’t use your credit card, you’re not demonstrating anything. Use your card at least once a month for small purchases like inexpensive meals, gasoline and drug store essentials."

    This certainly matches both what I've heard in the past about building credit properly, and my common sense. As a lender, my best customer isn't the one who's never taken a loan out from me. it's the only who's taken out only responsible-sized loans and always repaid in full

     – carbide20 Sep 27 '15 at 20:18
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    Use it, then pay it off in full when the bill comes. You'll avoid interest charges while still building a history of paying reliably. – keshlam Sep 27 '15 at 21:13
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    That's the plan. I certainly don't intend to carry a balance or pay interest, that myth is debunked and ridiculous. But the question still stands, what percentage of credit utilization each month is the most ideal to build credit quickly, and at what rate should I expect my number to rise from 0 while utilizing this set percentage monthly? – carbide20 Sep 27 '15 at 22:43
  • The formulas aren't published, so unless someone has deliberately run experiments to reverse engineer them I think we'd be guessing... – keshlam Sep 28 '15 at 00:03
  • That's a fair point. Hopefully we'll get some rough estimates from someone who has paid close enough attention to their bill / score to have an idea, even if it's just something like: I was not using my card at all and my score was increasing at x rate over time, I started utilizing ~10% and the score started to rise at this rate, but then I went over the recommended ~30% limit and the score dropped again or slowed down, something like that. – carbide20 Sep 28 '15 at 00:50
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    First time I looked at my score was when I started thinking seriously about house-buying. Seriously, if you have good basic borrowing practices and a reasonable stable job it really isn't as much of an issue as some folks claim. If you need a large loan "early", or if you have a bad history that you need to repair that's a different matter. – keshlam Sep 28 '15 at 02:01
  • If you follow the advice on sites like CreditKarma (and even from the EquiFax site), they say the ideal thing is to keep card utilization at around 10%, which can be hard to do depending on your total available credit. Still, it's an interesting goal to shoot for. – Daniel Anderson Jul 13 '16 at 11:29

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