Hi and welcome to the forum!
I just applied for my first credit card with Discover and was approved. Discover has the option of being able to view your FICO score anytime. When I got the card in the mail, I saw that my credit score is 746. However, this is my first credit card. How is my score so high already? I'm not complaining, just curious!
Congrats on your new Discover card. It is indeed impossible to know for sure without seeing what's on your report, but as others indicated with such a thin file your one card in good standing has much greater impact.
It's also possible you had something else on your report. Have you ever had an installment loan such as a car loan, student loan, mortgage, or personal loan? Positive history on installment loans can certainly have a strong positive effect on your credit score.
Finally, are you an AU (authorized user) on anyone else's account? About a year ago I added my partner as an AU on most of my accounts. He's never had a credit card or installment loan, but after adding him as an AU his FICO 8 credit scores shot up to the 770s/780s because he's benefiting from my long account history, low utilization, high scores (my FICO 8s are 800+), and good payment history. However, it's important to note that some lenders don't consider AU data and it generally carries less sway than accounts the person is a primary cardholder on.
somebodyNew wrote:Reviewing my credit reports won't hurt my credit score, correct? Sorry, I'm new at this. I just don't want to mess up anything!
Nope, reviewing your credit reports will not negatively affect your score in any way. You can pull your own reports as often as you like.
somebodyNew wrote:So, would it be better to pay off my balance each month if this is my first card instead of keeping a low balance?
For optimal credit scoring you'll want to have a utilization of between 1-9% report. However, it's important to note that you never need to pay any interest charges to do this. Always make it a priority to pay your full statement balance
before the due date. Any new charges can be floated till the following month without interest charges being assessed and it is on these new charges that you'll want to let about 1-9% report.
So for example if your previous statement balance was $180, make sure to pay that $180 in full by the statement due date. Then if you also make charges totaling say $95 during the statement cycle, then be sure to pay enough on that new $95 to get your utilization down to 1-9% of your total credit limit by the reporting date (the reporting date is generally a day or so after the payment due date, but you can check with Discover to find out for sure when yours is).
However, you may not want to monitor utilization so closely. I definitely do advise keeping is low and paying your statement balance in full every month to avoid interest charges, but the important thing to note about utilization is that it has no 'memory.' If your utilization is 60% one month you'll take a hit to your credit score, but if you then get it down to 5% the following month, it'll be no different for your score than if it had never been at 60%, just as though it had always been at 5% or less. So unless you have a new app planned, utilization on a monthly basis for scoring reasons doesn't necessarily have to be a huge concern.
That said, you'll also want to be aware of how your behavior looks to creditors. If you go from a lower utilization in May to almost maxed out in June that can set off red flags for your creditors and they could potentially lower your credit limits or close your accounts. It is generally advisable to keep utilization low not only for credit scoring purposes but also to avoid spooking lenders.
Personally speaking my utilization is always low because I make it a habit to PIF weekly - I'd only need to PIF monthly to avoid interest charges, but I simply prefer
to handle it on a weekly basis. That's just what works best for me. So my utilization is always low/lowish, but I never worry about what reports with a given creditor on a given month because 1) it's almost certainly within the 1-9% range anyway and 2) even if it isn't, it probably will be next month and that's fine for my score. I'd only watch it closely and 'engineer it' if I were planning an important app in the following month.