How long do I wait?


The longer your history of good credit, the better the offers will be

Erica Sandberg is a prominent personal finance authority and author of “Expecting Money: The Essential Financial Plan for New and Growing Families.” She writes “Opening Credits,” a weekly reader Q&A column about issues for people who are new to credit, for

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QuestionDear Opening Credits,
I am an 18-year-old student who, while very
adept at personal financial management and organization, is new to credit due
to age. I have one credit card account open and a total of only five accounts
open on my credit report. I have been denied an American Express card despite my credit
score because my trade lines haven’t been open for six months yet.

So, my
question is, should I wait to apply for another card (or try again with AmEx) after
six months or go with something like the Discover it for students that I will
be accepted for? Thank you! – Ryan


Dear Ryan,
For a credit issuer to trust that you will be responsible
with another credit card, you have to take specific actions with your current batch
of accounts for a lengthy period of time. Six months is a start, but a year or
more is ideal.

Because you are under the age of 21, federal law prohibits an
issuer from offering you a card unless you can prove you have the
personal funds to make the payments. Without that, you’ll need a creditworthy
person to co-sign.

However, as long as you meet the income and credit rating
requirements, you should be able to get a card on your own. Here’s why that’s a
smart idea, and how you can get a second credit card to round out your credit

Having another credit card will increase your credit scores.
Use the cards the right way and twice the amount of positive information will be on
your credit reports. With two credit cards as well as your other accounts
(student loans and car financing perhaps?), there will be sufficient data for
FICO and VantageScore, the most common credit scoring companies, to analyze.

Credit scores are designed to predict lending risk, so how you’ve dealt with
various loans and lines of credit in the past is an indicator of how you will
treat them in the future.

Many students have jobs, so if you are working, list thatt on the credit card application. Then take American Express’ advice. Delay
applying until you have at least six months of activity with your
current credit card on your reports.

While you can try for the Discover it chrome for students card, it requires a
“fair” credit rating. That means a credit score in the
mid-600s or above (FICOs and VantageScores start at 300 and go up to 850).
American Express products, however, tend to demand higher-than-average scores.

Now here are my recommendations:

1. Charge small, pay in full on time, repeat

This should be easy for you because of
your excellent money management skills! For the card you have, keep your spending as far below the credit limit as you can, but do use the card regularly.

Identify a relatively small expense and
charge it to your card once per month. By doing this, you’ll never appear to be
overextended, thus protecting your credit score from damage.

Pay the balance
off in full by the due date.

Maintain this pattern month after month to
populate your credit reports with the kind of activity that shows you really
are financially capable.

Regarding your other accounts, which I presume are
loans, just pay them on time, and if you can, send more than is required to
drive the debt down faster. The less you owe the better it is for your credit rating.

If you face a financial emergency in which you have to rack up a large charge, don’t wait for the bill to come. Write a check for it as soon after the purchase as you can.

2. After six months, check your credit
reports and scores

It appears you’ve already seen your credit reports, but after six months, check
them again.

Make sure only correct information is listed, and if you see
something wrong, dispute it with the reporting agency. You don’t want to get
rejected for credit due to a mistake.

Then get your credit scores. FICO scores
are available at for a small fee or for free at Discover Scorecard,
and you can access your VantageScore for free at

3. Apply for the card that best suits you
and your scores – or wait

This is where you have a choice.

If you have a
sound and independent income and follow the charging plan I described, in six
months you should qualify for a variety of credit cards. An easy way to search
for one within reach is the CardMatch program that makes card suggestions based on your credit.

If no card is appealing, continue on as
before until you’ve reached the year mark. Pull your scores again. Your scores should
be higher, and your options more diverse.

Finally, only pursue the credit product that you’re eligible
for and truly want. An overabundance of inquiries will hurt your credit scores.
When you’re in the market for any kind of credit product, you’ll want to make
sure those numbers are as high as possible.

See related: Student credit cards: Compare the best offers, Payment history: The most-important credit score component

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