@TURNERHOOVER wrote:
@Anonymous wrote:How much does CC Utilization matter when you have such a low limit. Me and DH both have Capital One Secured Master Cards, I pay off balances every 2 weeks. I make sure, I am on top of it. Now, since we have a low limit. I was wondering how much our utilization really matters. DH has had his about one month, and have had mine about 3 weeks. I know not long, but we are rebuilding credit to get our lives in the right place financially, to buy a house. DH also just got a car. It was neccesary purchase to get him back and fourth to work. His old car wasn't doing so great, and it was due to break down anytime.
We have high utilization, Mine is bit higher, just due to the me paying bills with it factor. DH mostly uses his for gas for the car, and a smaller bill. Once in a while food if I send him to the store. We don't purchase anything we don't have the money for. Or any extra fun things.
But at this point, so early how important is utilization?
Apply for more credit. More credit = lower util
They've had the cards for, what, about a month? Another secured card is probably the only option open right now.
OR, not worry about utilization and just use the card and pay in full by the due date at the latest.
@CH-7-Mission-Accomplished wrote:Hey NRB:
I don't know how to make it so the person I'm replying to's message appears in my reply so people know who my comments are directed to.
I was in a similar situation to you. I had tons of revolving credit, all prime lines, platinum cards, lots of mileage cards, etc. I never had a late payment but I always carried balances and over time they got bigger. Then I got cancer. I'm self-employed so I couldn't work (much). I worked enough to pay my health insurance, the balances went up, and in November 2012 I had my first ever 30 day late payment in my life. I had had a few mortgages, auto loans, and a ton of high quality credit cards.
November 2012 - First 30 day late in my life.
12/2012 - 6/2013 - Various accounts 30, 60, 90 days late ...
07/2013 - AMEX charges off my platinum card (18K) and sues me.
08/28/2013 - Filed BK 7. Nearly 200K in unsecured revolving debt.
Now I am blacklisted by just about anybody you would want to have a card with. I have managed to my my FICO's up to the 690s in 14 months post discharge, and I have about 40K in new unsecured credit, so I'm doing well.
But I will never, ever, ever, EVER carry a balance on a card again. If I am desperate for money I will try to get an installment personal loan from my credit unon and lock up my cards until that loan is paid off.
Great credit is wonderful but sleeping at night and not worrying to death is priceless.
Sounds like you have got your path thought out. Good luck. (I mean that!)
When you reply to a post, there is a Quote button in the upper right corner, that brings in the text of the post you are responding to.
Your situation is, unfortunately, a common type of issue here. Unforseen issues can derail any of us. That is why, when I give out advice, it is only to bring the advice to a usable level. I would never recommend anyone take out as much debt as I had, but in the context of the Debt Bubble, the banks were literally giving away the money, so a bunch went into cash balances. The truth about debt is, it does need to be paid back, and that is the portion of the cycle I am on now. The upside of my relationships with my banks is, they are now seeing fit to send me regular BT 0% and low interest offers, and that makes my payments more reasonable.
Each of us has a complicated story that has led us to this moment in our lives. What we are trying to discuss here is, what are the common themes we all need to understand to work with credit? The common advice frequently seen here that someone should always have 1% reporting, is not appropriate in all situations. The experience of many when they push the limit on a card by charging up high utilization percentages ( I've done it many times) and find they get a credit line increase, is one of those arguments against 1%.
Also, one of the key purposes of credit is to enable people to borrow more money than they have today, on the promise they will pay it back. Most of the time that works out well. Your case is an important, cautionary story that people need to understand, but it is not something that we can plan for, only know that we have to find the strength to deal with it. The great thing about this nation is, we have bankruptcy laws in place that make it possible for people to get out from under debts that they really can't pay. Yes, there's a cost to that, a cost in terms of rebuilding credit, but it's better than other countries where you would never get past that debt, it would require payment however long that took.
Cheers!
@Anonymous wrote:Credit utilization is a big deal. When you are rebuilding or starting over your limits are really too low to use. On a $300 limit card using more than about $75 a month or $125 on a $500 card will raise your utilization.
I'm going through that myself with 75% utilization but with my newly approved cards and those of my au, will be back at 30% in a few weeks. My score dropped from 727 to 644 per Discover.
Once you are able to get about $50,000 in cards, you can carry a $10,000 balance when and if needed and still be well under the 30% threshold and probably over a 700 score. Under 20% is best. A lot of people on here have rebuilt with waaay more credit lines than they need so they can charge a lump sum if needed and keep low utilization and high scores.
I don't know what your scores are or if you have derogs and collections.
You could use some more accounts to raise your credit lines, charge less than 10% on them and pay them off in 2 payments over 60 days so some activity will show on your reports.
Do you have an au with no debt to add you on 2 cards? Have you tried the shopping cart trick for sp's? Get a couple more tradelines anywhere you can keep your debt ratio low, get your scores over 650, and some unsecured cards may come your way with $500-$1000 limits. 6 months of cards like that and some $1500-$2500 cards will be available to you.
Your score didn't drop from 727 to 644 with only one card of ~$500, right? You've got larger balances on more cards than that, am I right? How long have you been building credit? Which cards, limits, and open balances do you have? Was there some other change or loss of an AU positive in your profile as well?
OP situation, with only the one card is starting out with a low FICO (presuming a FICO even calculates yet) because of short payment history, not any utilization effects that would be noticeable.
