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mailwoman
Posts: 15
Registered: ‎03-19-2009
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Thank you FICO Forum- and question about charging cards

Several weeks ago I posted a question about my fee increasing and I got EXCELLENT advice. Thanks to who responded. The discussion went to adding extra cards to my file but I was apprehensive about it. I took the adivice and got a new card and my score went up to 700! I'm really greatful for this site! Thanks.

 

Question: Should I charge my card each month and pay off each month or should I charge only when necessary?

 

Thanks!!!

Regular Contributor
pez478
Posts: 114
Registered: ‎04-29-2008
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Re: Thank you FICO Forum- and question about charging cards

You should put a charge on the new card every couple months at least just to keep the issuer happy so they'll keep the account open. If you've got a new rewards card, you could consider charging almost everything just for the points/cash back (that's what I do).

 

Either way, to maximize your FICO score you should only allow up to half of ALL TL's (CCs, loans, mortgage, etc) report a balance to the CRAs each month. If you already have half of your TL's reporting a balance, you can still charge as much as you want to on your new card - just try to pay it off before the statement cuts.


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mailwoman
Posts: 15
Registered: ‎03-19-2009
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Re: Thank you FICO Forum- and question about charging cards

I do have rewards on my card but I don't get any cash back. :smileysad:

 

 What are TL's? The only credit that I have are three cards, I don't have a mortgage or auto loan and I have a student loan in deferrment. Should I charge each card or charge them sparingly? My goal is to get to at least 720 by next year to buy a house.

Regular Contributor
FocusOnFICO
Posts: 180
Registered: ‎05-01-2009
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Re: Thank you FICO Forum- and question about charging cards

Pez is referring to Trade Lines.

 

If you have only three credit cards, and nothing else, the strategy would be:

  • charge on each card
  • PIF on two of the cards before the statement cuts
  • Let a "small" amount (1-4%) report on the one card
  • Pay off the reporting card when the statement hits

This strategy is an outstanding way to master your utilization.

 

Charging on each card regularly can also help to get line increases when requested.


Starting Score: TU 766 EQ 788
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Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
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Re: Thank you FICO Forum- and question about charging cards

With three CC's and no installment TL's you can allow a balance to report on one of the CC's before receiving a FICO ding.

Valued Contributor
Scamp
Posts: 2,791
Registered: ‎03-18-2007
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Re: Thank you FICO Forum- and question about charging cards

[ Edited ]

mailwoman wrote:

I do have rewards on my card but I don't get any cash back. :smileysad:

 

 What are TL's? The only credit that I have are three cards, I don't have a mortgage or auto loan and I have a student loan in deferrment. Should I charge each card or charge them sparingly? My goal is to get to at least 720 by next year to buy a house.


 

Double-check your rewards options and make sure there's no cash back-type option (this may include the option to use points to get gift cards, or some such).

 

With regard to card use, as FoF said above, your best bet probably is to always to have 2 of the 3 reporting 0 and one card reporting a tiny fraction of that card's limit, as several folks who've experimented with all 0's reporting have noted they actually got dinged for it.

 

Easiest thing is to rotate cards, using a different one each month to charge something small.  If you charge something that's only 1-5% of that card's limit, go ahead and let that report, then PIF well before the due date.  Then into the sock drawer it goes and a different comes out for a purchase next month.  If you charge more than 9% of that card's limit, then pay the balance down to under 5% before the statement date (or reporting date, if that card's one of the oddies that doesn't report on the statement date), let that report, and then PIF the rest before the due date.

 

You might try letting all 0's report at some point to see if you do get that ding others have reported - it may be that in your particular situation, all 0's will actually give you a better score, so it might pay to see what happens.

 

Hope this helps, and good luck!

Message Edited by Scamp on 07-18-2009 06:46 AM
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02/12/09 EX: 701 / 02/08/10 EQ: 719 / 02/08/10 TU: 723

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Frequent Contributor
ocheosa
Posts: 372
Registered: ‎06-15-2007
0

Re: Thank you FICO Forum- and question about charging cards

[ Edited ]

mailwoman wrote:

Several weeks ago I posted a question about my fee increasing and I got EXCELLENT advice. Thanks to who responded. The discussion went to adding extra cards to my file but I was apprehensive about it. I took the adivice and got a new card and my score went up to 700! I'm really greatful for this site! Thanks.


CONGRATULATIONS!!! Did you end up getting the citi card or a credit union?

Message Edited by ocheosa on 07-18-2009 06:31 PM
01/04/10 TU 778 EQ 731
08/05/09 TU 762 EQ 722
02/12/09 TU 722 EQ 704 EX 690
EQ sensitive to inqs & student loan.
Member
mailwoman
Posts: 15
Registered: ‎03-19-2009
0

Re: Thank you FICO Forum- and question about charging cards

Okay, got it. So use all a different card each month and pay off in full each card that I use except one, where I would keep an extremely low balance for reporting purposes. Whew, this credit monitoring thing is a little exhaustng. Ive never really kept track because I've never had a real reason

 

Ocheosa, Thanks! I wound up applying for the Citi forward card so I get no annual interest for six months and points on purchases. It made since, sense I have a savings and student loan account with them. Thank you all for your help and I hope the get excellent advice during my future path to homeownership!!!

Frequent Contributor
ocheosa
Posts: 372
Registered: ‎06-15-2007
0

Re: Thank you FICO Forum- and question about charging cards

Mailwoman, Great and Congrats again!

01/04/10 TU 778 EQ 731
08/05/09 TU 762 EQ 722
02/12/09 TU 722 EQ 704 EX 690
EQ sensitive to inqs & student loan.

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