(Closed) Slightly OT: Credit card payments? Credit score?

posted 7 years ago in Money
Post # 3
Member
5921 posts
Bee Keeper
  • Wedding: December 2010

Darling Husband has a credit card in his name only that he uses on the road.  He pays the full balance off every month, which is what our financial advisor told him to do.  I am not sure though!

Post # 4
Member
8738 posts
Bumble Beekeeper
  • Wedding: September 2011

@keepsmiling19: I pay mine off in full every month and never use more than 50% of my credit limit. I have a near perfect (if not perfect) credit score.

They keys are paying the card on time and not ever getting close to your limit.

Also, don’t check your credit score too often as credit checks can damage your score.

Post # 5
Member
2090 posts
Buzzing bee
  • Wedding: August 2010

Your credit is based in part on how much available credit you have, so right now if your bill is paid in full, you have 100% available credit. If you have a balance of $150, you suddenly only have 50% available credit, which might hurt your score, as they like to see lots of available credit.

I’m not sure what your friend meant by:  “if I don’t leave a little on there, they don’t have anything to loan me”.

There are some great forums at myfico.com about building (or rebuilding) your credit. There are people there who are very knowledgeable about credit and whats best to do to build it, and keep it!

Post # 6
Member
1962 posts
Buzzing bee

Pay it off in full each month and charge something on it each month.

Post # 7
Member
1398 posts
Bumble bee
  • Wedding: May 2011

Agreed with the other PP’s, but I wanted to touch on “getting a different card in 6 months”

If you cancel the card you get now, it will erase the history you’ve created with that card. Don’t ever cancel an account unless you think it is absolutely necessary (like they have non use fees or yearly fees that you can’t handle). Whatever card you get will be your longest history of credit, so use it wisely. If you get too many cards in a short period of time, that will ding your credit score as well. I’m not sure why you need a second credit card? If you maintain a good history with your CC company they will raise your limit, which is a good indicator that your score is going up.

Also don’t apply to too many cards at once. Do your research, there are plenty of websites that will tell you the best value for your card. Get one with miles, or cashback. American Express requires that you pay your balance in full every month, and they have great rewards. You don’t have to worry about the interest rate as long as you dont plan on carrying a balance.

Post # 9
Member
1237 posts
Bumble bee
  • Wedding: May 2015

@keepsmiling19: You can get the limit on your current card increased in most cases, especially if it’s through a bank that you have a history with.

Post # 10
Member
5786 posts
Bee Keeper
  • Wedding: May 2011

@keepsmiling19: The bank rep told you to leave a balance on there so they could charge you interest fees. In fact the minimum interest charge is prob $2 so the rate you will end up getting charged will be waaaay higher than the stated rate for the card.

Post # 11
Member
1042 posts
Bumble bee
  • Wedding: May 2010

You have a good plan to get another card in about a year- the more available credit you have, the better your score will be. Don’t check it too often, because every time you check your score it will go down slightly (it will go back up, nothing to be alarmed about). 

I will say, though, that getting a credit card is only going to do so much for you in terms of building credit. My husband and I tried to buy a car several months ago, and wound up getting a crappy interest rate because of a lack of credit history. My husband and I both have had credit cards for about 6 years now and diligently pay them off. However, when we were buying our car, the sales rep said that doing a car loan is not so bad because it will build a stronger credit history for us and if we do well with this, it won’t make homebuying such an issue with a lack of credit history and we can get a better rate.

Post # 12
Member
2090 posts
Buzzing bee
  • Wedding: August 2010

It sounds like you have a “secured” credit card then. Banks can “unsecure” the card (I think they are more willing to do so after a year or so), and once its an unsecured credit card, the rate can be raised and it functions like any other credit card.

I agree completely with Arenyth – don’t close this card, because that will definitely damage your credit score. Even if you get a new (additional) credit card, just keep this one in a drawer somewhere and use it once every quarter to keep it “active” and open/reporting.

There are also some websites that tell you which credit cards you can get with X credit score, and compare points/rewards. Maybe check on your credit score 6 months or a year from now, and then figure out which card would be best for you

Multiple types of tradelines will raise your score as well. Basically, they want to see that you can manage different types of credit over a period of time: credit cards, car loans, other loans, mortgages, etc. Hope this helps, I really screwed up my credit in my early 20’s, so I try to help if possible now so no one repeats my mistakes!!! 🙂

Post # 13
Member
1398 posts
Bumble bee
  • Wedding: May 2011

@Miss Burgundy: Yea, I’ve been struggling with something just like that. My rating should be perfect, I’ve paid off a car loan, have established fantastic credit history with multiple cards and a large available credit. But my score was still below what I wanted it to be, and was only considered “good” instead of excellent. And all it came down to was: time. My credit history is good, but I haven’t had it for long enough. I was told that once I’ve had credit for about 10 years, then I will fall into the excellent category. I honestly think credit ratings are bullshit, I couldn’t be a better customer and I still get penalized.

 

@keepsmiling19: Yea I’m not sure who you’re banking with, but he is not helping you. Your credit limit can be raised, sometimes you have to ask, sometimes it just happens. I suggest when you do get a second card, do not go through a local bank – do some research online and find out what the best possible card is for you. I have been using Discover and I love their website, their communication and transparency of fees, and my cashback rewards have been very useful. They are not accepted everywhere however, and so I have my Visa debit/credit card for other times.

Post # 14
Member
1962 posts
Buzzing bee

@kirabee: Don’t request a limit increase if you don’t have to.  That will bring down your score.

As to the OP: There have been some cases where banks have done some shady things to people w/ great history who always pay on time and never carry a balance (i.e. customers they don’t make money off of).  Those stories are few and far between.  I only have ever seen them on CNN.  I would consider getting a new financial advisor.  Or watching Suze Orman.

Post # 15
Member
4313 posts
Honey bee
  • Wedding: November 1999

Something I did when I was just starting out was to get “Signature Loans” from my bank.  They were usually $300 or $600 and I would pay them off over the course of 3 months or 6 months, directly debited from my paycheck.  I did this about 9 times…blew the cash on whatever I felt like, paid the money back on time, and my credit score literally sky rocketed.  Might see if your bank does something like this rather than messing with credit cards.

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