@MarineVietVet wrote:
@Anonymous wrote:What is the best utilization to have? Some say it's 1-9% and some other people say 30%.
My credit score is below 650. Any suggestion?
Thank you for your Time.
Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.
You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.
On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.
Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.
Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.
Just my personal outlook on things.
+1
@Anonymous wrote:Hey Marine,
Thank for your reply. Well, as you can see my credit score is not the best. I want to increase my credit score to get somewhere near 720+. I got a two collections on each report and I am in the process of taking care of them. In 6-8 months, I am going to apply for Amex blue cash. I just want my credit score to increase, but having a hard time. I recently opened up 3 credit accounts, 1 au and 2 credit cards. I just want to make sure I will increase as much as I can with current accounts.
BTW, see this makes any sense. I hear people say leave balance to increase your credit score. SO let's say I have 100 credit lmit. In march, I will leave 10 dollars as balance. April another 10 and may another 10. SO by end of april, I will have 30 dollars balance. Which is 30% of my debt/credit limit. Do you think paying off that debt will increase my credit score by end of may?
How many total cards do you have and what are their limits?
@Anonymous wrote:Thank you Marine.
Let me ask you another question then. Let's say over the three months, my balance has been let's say 30% of my credit limit. Will the balance impact my credit score as well? If so, negative? or positive?
You'll take an impact the 1st time it reports, and it will not change until you pay it down or charge more and it keeps decreasing.
