a question about credit

[fogg88]

Okay, I've got one credit card with a fairly high balance, and a few others (two visa's, one gas card) with no balance. I want to improve my credit and FICO score as much as possible over the next few years, to help with buying a house once I get out of school again.

I've heard that using your cards and paying on them is better than just having an available balance with no payment history, but I've got a question. Would it be better to charge a small amount on each card (like $20) and pay it off every month, or would it be better to carry a small balance from month to month while still paying a little less (like charge $20, pay $15). ???

Any thoughts?

 

[Paulo]

carry a balance bro

 

[Paulo]

and make sure that you don't have more 'debt potential' than you make in a year.

 

[calveless wonder]

keep a little on each card i guess....

it makes no difference except maybe from an interest standpoint.

if you pay in full each month it'll still reflect in your credit score.

 

[gonelifting]

Not sure if that`s exactly true. I`ve NEVER carried a balance and keep getting card offers almost daily. My credit is great.

Having too much potential borrowing can be bad as said above. With only a couple of cards you`ll be alright though.

 

[fogg88]

Thanks for the replies!

...so, by 'debt potential', I'm assuming that means don't have more available credit than your annual salary, right?

 

[calveless wonder]

Thanks for the replies!

...so, by 'debt potential', I'm assuming that means don't have more available credit than your annual salary, right?

riight but that's not really as much as a factor as is debt to income ratio.....

so unless you have thousands and thousands upon dollars of credit there's no need to worry.

 

[Paulo]

Thanks for the replies!

...so, by 'debt potential', I'm assuming that means don't have more available credit than your annual salary, right?

the idea is that if you make 50K a year, don't have four Platinum cards with 25K limits.

It isn't the end of the world but it is considered towards your score.

If you have never bought a home before, there are a lot of programs out there that will give you good interest rates and help.

I wouldn't reccommend keeping a lot of balance on a card though, unless you have to. 20 or 30 bucks isn't going to kill you with interest but a few $K will.

 

[Bonkme2]

There are 2 big factors affecting your FICO score:

~30% is from your credit balance/credit available.
The average person carries about 30% of there credit in debt on credit cards. So any more than that works against you big.

Another ~30% is about payment history. Pay your bills on time and you're in the clear.

Other factors include:
Length of credit history; the longer the better.
Number of inquiries on your reports. Too many inquiries makes you look desperate for credit.

Ther are a few other factors, but I don't remember them off the top of my head. I just closed on a house this past May so I was doing alot of monitoring my credit and what not trying to improve my score.

 

[vansmack2000]

Most of the time i overpay each month, so if my bill was $460, ill send in a check for $500. Ive been doing this for years. I once had a $1.25 credit on a card i rarely use for over a year, i believe they have to pay you interest too (not sure) but they finally sent me a check, kinda wack

 

[Pamela]

I have one credit card that I use for emergency's only.

I pay cash for everything.

 

[MFMan]

I have one credit card that I use for emergency's only.

I pay cash for everything.

I think credit cards are a neccessary evil. Best used for emergency situations only.

 

[Smurfy]

I have one credit card that I use for emergency's only.

I pay cash for everything.

ditto!! my only credit card has a whoppinh $400 credit limit LOL

 

[alien amp pharm]

I only use my credit card to buy porn on the internet.

Just kidding!!



I use it to buy illegal stuff too