Establishing credit: update #3
Happy New Year!
So today I casually checked my online bank statement as I obsessively do almost every day (aka “watching the grass grow”) and what do I notice? Why, a little gift for New Year’s, courtesy of Capital One!
I mentioned before that I expected another raise of my credit limit in about May 2013, but I miscalculated. Today (January 2015) I find myself with a glorious limit of $2,250! Wow! That came unexpected. So I went from $300 in May 2012 to $500 in November 2012 to $750 sometime towards the end of 2013 (probably November or December–I forgot to report on this!) to, now, $2,250. From $300 to $2,250 in 2.5 years is not bad!
What I find interesting–and symptomatic for the entire credit system–is that I’ve been spending tiny amounts (often no more than $10 per month, mostly on e-books and such) and that I, as a customer, obviously don’t need this kind of credit line. Yet they hand it out anyway, probably according to some algorithm, trying to tempt me into spending more. Having said that, I’ve been obsessively paying my bills in full and on time (as I usually do), so that will certainly help mark you as a reliable candidate. But still.
The good news, then, is that you just need to follow some simple rules for establishing credit, keeping it, and increasing it:
- Be patient;
- Spend responsibly;
- Never max out your credit limit; and
- Always pay on time (and also in full if you can).