I looked around a bit on the internet and stuff for it.
Even in the credit repair thread.
But I just want an easy answer.
So I just applied for a credit card. My first one…
I’m approved, $600 limit.
I got it to build credit, throw gas on there and pay it off asap.
I’ve been using a Debit card for the last two years.
So, If I just buy everything that I normally do with my bank card, with my credit card instead, will that help my credit more so, than using my bank card?
Or does it just matter if you pay bills on time, and not really counting the $$ value of the bill?
you should keep a SMALL balance on your card… under 30% of its limit… and pay off the rest each month… how much you pay off above that 30% limit is not relavant if you just pay it off each mont
Your credit rating will go up with the age of the accounts and the lack of negative marks
Yeah, I remember hearing on that one credit show at night [susan whatever], about how aged credit cards are good. and you should avoid canceling them if you can and such.
AFAIK (I am not an expert) but you’re credit report shows if you’re paying on an active account or are missing payments. Simple as that. My credit report for all my credit cards show the same on the ones I use versus the ones that have 0 balance.
A 0 balance would be looked at the same as actively paying on a balance? Correct? Someone correct this if it’s wrong.
you have to keep a small balance on it… dont just keep it open with 0%…
and if your worried about 10% of 200 over a year (20 bux) then you need to seriously reconsider life
That’s $240 over the year.
Which = one class.
Or three books.
Or 1/3 year of gas.
I see what you’re saying though.
I’ll probably do that.
Maybe not as much at the start though.
I want to get the hang of this whole credit card business.
i didn’t do a thing with credit till i was 19. Got a 5k loan on a truck, paid if off in 3 years, got another one for a trailer at 22, paid it off in 3 years. Had a credit card, but never used it. At 23 i drove off the ford lot with a brand new super duty no money down cause i had a killer credit rating. Just live life and your credit will come. There is now fast ticket to good credit.
I can’t tell you what other members on this forum know, or where they got their data from, or whatnot, but I can tell you that everything I have learned is from extensive research over the last two years. Furthermore I’ll go as far in saying I probably know the most out of any active poster on this forum… and can prove my knowledge my the “baddies” i’ve had removed from my credit report, including the commonly difficult to remove judgments.
No where is “the formula” for your credit score listed in public. Some people believe 15% of your score comes from utilization %s, some say 10% some say 25%.
Historically, people have had their best credit scores when their revolving debt ( credit cards, store cards ) have a utilization % of 10% or lower.
If you have ever reviewed your credit report either via a 3rd party service ( myFico, truecredit ) or your direct report ( the file lenders pull up when reviewing your history ) you’ll notice plenty of data. From your existing balance on a credit card, to the credit limit, to the # of lates you’ve had, it’s status as open/closed, etc. It will not report for you or anyone else, your usage pattern… just the current balance.
Often the CRA’s ( experian transunion equifax ) will not report the maximum limit on a revolving trade line until it has been reached. It sucks, but the CRAs are lazy. Look at your report, chances are you don’t have a credit limit of $143, but since that is the highest balance you’ve ever had on the card, it’s what’s reporting. If that’s what the CRA thinks your limit is, and you maintain a $100 balance ( because you know 10% of your $1000 credit limit is good ) well now your utilization is fucked. If you notice your credit report is reporting an innaccurate limit, you can always call your credit card company and ask them to update the information they send to the CRAs.
Using the credit card monthly and paying it off in the same month is the same as maintaining a $0 balance, in regards to your credit report. That doesn’t mean there are no inactivity clauses associated with some subprime lenders ( credit 1, HSBC/Household, First Premiere… ).
So to sum it up, use the credit card once, pay it off that month… and then throw it in a shoebox. Check your credit report a few times a year to make sure it’s reporting properly - be aware of any usage / activation fees that might pop up, and you’ll be in the clear.
Since it is a first time card, pay attention as to wether there are any monthly / annual fees.
Alot of begginers cards will have a annual fee, that they will breakup & bill you monthly for. So, you may get, say, $6 / mo bill. IF YOU DON’T PAY IT, YOU WILL BE CONSIDERED LATE.
Otherwise, 10.99% is not too bad to start with, believe it or not.
Whatever you do, keep the card open. Keep it at least 2-3 yrs, depending on what else you do. Since you are just starting out, the only thing you can do is fuck it up; or not fuck it up.
In otherwords:
*Use it sparingly, & pay it off. Keeping a running balance on the card is a stupid urban myth. It will make the finance company happy (as you’re paying interest to them), but will not help you credit scores.
*DO NOT BE LATE. Evar. I don’t care if you have to setup biweekly pmts through your banks bill-pay service.
*Keep the account open. Average age of account is a SMALL percentage of FICO, but since you’re starting out, each month you keep the account in good standing is a positive.
*DO NOT carry running balances greater then 60%, even less is better. Ideally, you’ll keep ZERO running balance on the card.
Here is the actual breakdown of your FICO scoring (as of 6/2007 model):
35% Payment History (no lates / 30 days+)
30% Utilization (total credit lines in use as a percentage)
15% New credit - how recently you’ve taken out credit, hard inquiries
10% Average age of accounts
not MONTHLY