student loan usage

How long should I wait to apply for credit?

I just recently paid off a credit card that I owed. It was $2500 and it took about a year.
The thing is, I wasnt credit or financially savvy when I started paying it off so I closed it to eliminate any more usage. I just paid it off the last $600 right before its billing cycle ended and I over paid it a little to prevent recieving a bill for the risidual finance charges. Now that its paid off, all I have is 1 credit card with no balance and a limit of $200. Im just wondering if you guys know or can suggest when I should start applying for credit?
Oh and if it helps, I make about 36k a year wit a car loan of about 10k and student loans of 12k (im still in school though). THANKS!

You should have four trade lines appearing on your credit report:

1) The loan you paid, which is a closed trade line
2) An open trade line for the credit card with $200 limit
3) An open trade line for the auto loan
4) An open trade line for the student loan

Since you are in school, I would recommend avoiding any more credit. You shouldn’t need it. Live within your financial aid. If you need more cash, get a job either on or off campus.

Use any extra money you have to payoff the car. After you graduate, you can apply for credit cards, and you should find them easier to attain. The fact that you had a credit card that you spent the last year paying off tells me that you are not flush with cash, and therefore, don’t need the trap of more credit.

I would recommend taking any extra money you have available from now until you graduate, and allocate 1/2 to a savings account for emergencies and the other 1/2 as additional principal payments on your car.

Be sure to max-out your insurance coverage on your car for liability (100K/300K/50K), and raise your deductibles to $1000/$250 on your comp/collision. This will give you the most value for your insurance dollar while protecting you from your most likely financial disaster.

You make enough money that you should be able to get by without using credit cards. If anything, if you have the discipline, you might try to get a card that you lock-up for emergency use only (severe financial crisis, not pizza). Try applying for a credit card where you keep your checking account, in that case. Wait 30 days, so that the other payment posts first.

Good luck!

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