24 Looking to build Credit... What are some good tips on your first Credit Card

SolesFC said:
I understand how using a credit card works.. My question to you guys is it like the more you spend with your credit card the higher your credit score will be? Or that doesn't matter? And this is assuming I'm paying my bill in full on time.
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your credit bureau is based on Credit History / Credit availabitlity / Credit use among other variables.

It's good to have a long good credit history (paying everything on time, not having any bills in collection, etc.).

It's also good to have credit available (If i can show i can manage a 10k credit card without blowing it all up at the casino, it's good. It means i'm responsible with my credit).

It's good too if you use a low % of your credit available (like said earlier, under 30% is important for your credit score to rise through time). It also shows that your are responsible. If you use a high % of your credit and make all your payments, your score will rise, but slower than someone with a low % of credit use vs credit available.

It's very important to not have any bad notes on your credit bureau. That's why it can be important to check it up and see wha't on there. It can happen that something what put into collection, but had nothing to do there and it tarnishes your score. You can get it removed if you contest it properly.
 
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Lets say I put 600+ on my credit card in the first two weeks of the month, then pay it off, then put another 600+ on my credit card in the last two weeks of the month. Is that good or bad? So I passed the 30% mark if you combine both payments but never actually had more than 20% on my card at one time?
 
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if you pay it all off, i would assume it's good.

i think the 30% mark is more for carried over balance on the satement.

capital sb capital sb correct me if i'm wrong.
 
So like I said with example above. 3k credit. spent 600, paid it off, spent 600 paid it off and now I'll prolly have $200 on my statement date.

Anything I need to change about that scenario?
 
sunshineblotters said:
So like I said with example above. 3k credit. spent 600, paid it off, spent 600 paid it off and now I'll prolly have $200 on my statement date.

Anything I need to change about that scenario?
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Can you pay off the $200 as well?

What does everyone here think of this? My uncle in the past few years started paying more than his CC balance. For example, if the end of month balance was $500, he'd pay $600. His credit score jumped from mid 700 to 800+. Is this a good thing to do?
 
SolesFC said:
I understand how using a credit card works.. My question to you guys is it like the more you spend with your credit card the higher your credit score will be? Or that doesn't matter? And this is assuming I'm paying my bill in full on time.
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Short answer: No. Spending more money will not increase your credit score.

Long answer: It can increase your credit score, but it depends on a lot of factors. When you spend a lot of money on your credit card each month, credit card companies will sometimes automatically increase in your credit limit to encourage you to spend more. When your credit limit increases, this helps your credit utilization ratio.

Example A. Let's say you have a $1000 credit limit. You spend $500 each month on that card. That's a 50% credit utilization rate. Generally, a credit utilization rate over 30% is seen as bad by the credit bureaus (the people who determine your credit score i.e. Equifax, Transunion, and Experian). Credit utilization rate has a HIGH impact on your credit score.

Now if I were a credit card company, and I see you using your credit card a lot, I would maybe increase your credit limit so that you can use even more credit. Let say I increase your credit limit now to $2000. Your credit utilization rate is now 25% (keeping your spending constant at $500/month). This will increase your credit score because your credit utilization rate has decreased from 50% to 25%. A credit utilization rate of 1% - 9% (per credit card) and under 30% (for all combined credit cards) is seen as ideal by many.

One more tip from my post on Page 2 of this thread.

For the rest of yall:

Don't wait until your billing statement to end before paying off your credit card.

Your balance at the end of your billing statement is reported to three major credit bureaus by your credit card company. Let's say you have a $3000 credit limit. If you spend $2000 dollars a month on that credit card and wait until after your statement ends to pay your balance, your credit card company will report you as utilizing $2000 of your $3000 credit limit. This is a credit utilization rate of 67%. This will negatively affect your credit score, EVEN if you pay it off in full before the due date. Ideally, you want your credit utilization rate to be 30% or less, and under 10% is even better.

BUT...you still want a balance reporting. So before your billing statement is over, pay off everything EXCEPT 1%-9% of your credit limit. THEN you pay the rest of the balance before the due date so you don't incur any interest charges.

Check out creditboard and myfico forums for more info.
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sunshineblotters said:
So like I said with example above. 3k credit. spent 600, paid it off, spent 600 paid it off and now I'll prolly have $200 on my statement date.

Anything I need to change about that scenario?
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Nothing. $200 on your statement is 7% utilization. Doesn't matter what you did in between the $600 spent is irrelevant all that matters is the statement balance.

A lot of people advocate to pay your balance off in full every month it doesn't boost your score, it saves you interest though.
Slighted said:
 
Can you pay off the $200 as well?

What does everyone here think of this? My uncle in the past few years started paying more than his CC balance. For example, if the end of month balance was $500, he'd pay $600. His credit score jumped from mid 700 to 800+. Is this a good thing to do?
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Paying off more than what was due did not cause his credit score to jump. Sounds like he reached the AAoA (average age of accounts) threshold to break into the 800s during that time, or something bad fell off his report. Most people say that you must have an AAoA of at least 10 years to get into the 800s.

ce_FICO-Score-chart.jpg


Everyone new to credit that doesn't understand what effects your score should start here and go through the entire guide.

http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx
 
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Ok so just to clarify for myself... If I had a limit of 1k... and lets say I spend $250 a month and pay it back in full and on time everytime... thats a 25% credit utilization rate... so thats a good way to do it right? Instead of spending lets say 50-60% every month even if I"m paying it back on time and in full? 

EDIT: By the way this is assuming I'm only using one credit card. 
 
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To add to this question^, Will you still build credit if your utilizing more than 30% of your limit, but still paying it off in full and on time?
 
bronconation24 said:
To add to this question^, Will you still build credit if your utilizing more than 30% of your limit, but still paying it off in full and on time?
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I think you do but much slower than if you spent 25%-30% please correct me if I'm wrong NT. 
 
SolesFC said:
 
Ok so just to clarify for myself... If I had a limit of 1k... and lets say I spend $250 a month and pay it back in full and on time everytime... thats a 25% credit utilization rate... so thats a good way to do it right? Instead of spending lets say 50-60% every month even if I"m paying it back on time and in full? 
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Yes, if you allow the $250 to cut on your statement that is 25% utilization it is better than allowing $500-$600 posting on your statement.
bronconation24 said:
To add to this question^, Will you still build credit if your utilizing more than 30% of your limit, but still paying it off in full and on time?
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Yes paying on time is building credit, not matter how much you are utilizing.

You can't truly rush building credit. Your credit gets better with time. 

The only way to make a huge jump is to take out an unsecured personal loan and pay it off over time.
 
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^^ basically you want to show that you're using the credit that you have access to responsibly. Maxing that joint out every month isn't going to look great but if you're paying on time you are still building good credit. What will look great is keeping it under 30% total usage every month and always paying in full each time.
 
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Bit the bullet on the inquiry after 1.5 years and asked Chase to CLI me. Fools told me a Credit Advisor will look into my account and get back to me in 24-48 hours :smh: . At least I didn't get denied immediately but still.
 
Last question for the day at least... "A credit utilization rate of 1% - 9% (per credit card) and under 30% (for all combined credit cards) is seen as ideal by many" (NikeAirForce1).. confused on this part cause it seems this is only in terms of someone who is using more than 1 CC. What if you are only using 1 CC, I'm sure the 25-30% utilization rate still applys but I'm confused on what he meant by the 1-9% part.. thanks again this thread is helpful af. 
 
SolesFC said:
 
Last question for the day at least... "A credit utilization rate of 1% - 9% (per credit card) and under 30% (for all combined credit cards) is seen as ideal by many" (NikeAirForce1).. confused on this part cause it seems this is only in terms of someone who is using more than 1 CC. What if you are only using 1 CC, I'm sure the 25-30% utilization rate still applys but I'm confused on what he meant by the 1-9% part.. thanks again this thread is helpful af. 
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If you are only have one card, for best credit scores you wouldn't want more than 1-9% reporting on your statement balance. 

Read this thread, I don't have time to post the exact post that would be useful sorry (its only about 15 post).

http://ficoforums.myfico.com/t5/Cre...utilization-for-different-scores/td-p/1292921
 
BeezyGotSole said:
 
Nothing. $200 on your statement is 7% utilization. Doesn't matter what you did in between the $600 spent is irrelevant all that matters is the statement balance.

A lot of people advocate to pay your balance off in full every month it doesn't boost your score, it saves you interest though.

Paying off more than what was due did not cause his credit score to jump. Sounds like he reached the AAoA (average age of accounts) threshold to break into the 800s during that time, or something bad fell off his report. Most people say that you must have an AAoA of at least 10 years to get into the 800s.

ce_FICO-Score-chart.jpg


Everyone new to credit that doesn't understand what effects your score should start here and go through the entire guide.

http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx
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The comment makes me feel 
nthat.gif


I bought my first house a little over 5 years ago (23 then), and my oldest CC was opened about 6 years ago. I have also paid off a car in that time too; granted I have another car that I pay on now though. I started cracking 800+ with all 3 credit agencies late last year/early this year. The goal now is to see how high I can get them and keep them over 800+. 

I have 4 CCs technically at the moment:

Navy Federal Credit Union

Citi Bank

Best Buy Mastercard (only use for either the 18-month 0% APR, or for buying something for double/triple reward zone points and then paying off the card that day)

PayPal SmartConnect (first card I applied for I believe and got denied the physical card, but approved for the online/digital credit card)

I had a Kay Jeweler's Card that I opened to get rewards when I get stuff for my wife, but I haven't used it in so long, that I believe it goes inactive after a couple years of not buying something. 
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Like the guys said...never be late, don't max it out, and over time your scores and credit limits will go up. I don't want/need my limits to go up anymore then where they are now (~$30k collectively), but I work with a couple guys that have a single CC with $25k+ limits on them! 
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oidreez said:
See the problem with this credit game is they want you to have access to lots of credit but not actually use too much of it
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That is exactly the problem. Prime example...

When on our honeymoon, me and the wife went to one of those listen seminars for buying a timeshare. 

Initially, we bought one for ourselves with a 2 year no interest perk on it, but right as we were leaving decided that we did not want to go through with it. MY family already has one that we don't utilize enough as it is. 

Come to find out, that the 2 year no interest, was them opening a CC in my name and I was purchasing the timeshare through the CC. So even though I got the transaction reversed, the CC is still open in my name. So now I have this extra CC (forgot to include that on my list above 
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) that I have never bought anything with over 2 years ago, and I actually shred it whenever the new one comes, but I don't want to go cancelling it because I don't want it to effect my credit score for cancelling a card, and for also reducing my overall total credit I have access too. 
mean.gif
 
PolosandDunks said:
Bit the bullet on the inquiry after 1.5 years and asked Chase to CLI me. Fools told me a Credit Advisor will look into my account and get back to me in 24-48 hours :smh: . At least I didn't get denied immediately but still.
Click to expand...

Does anyone know the range of credit drops for that is? **** pissed me off. Don't get why that would be the case at all.
 
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