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Hello,
I am coming out of a Ch 7 BK that was discharged in July 2009 and have been able to secure three new cards to begin the rebuild process. Two cards are secured, both with a CL of $750 and one is unsecured with a balance of $500. I also have a Dress Barn account with a $550 CL that I am an authorized user on and a Chadwicks card that is mine only with a $1100 CL but 0 balance. My mortgage is current. Since I am starting over, I want to make the right choices to boost my score as much as I can as fast as I possible. Please advise on any or all of the following. Thanks!!!
(1) I am unsure about the utilization percentage that I should or should not use. My plan was to use my lines like I would my debit card, paying them off immediately after I use them, but I am not sure if that is what I should be doing.
(2) If I pay off the balance immediately after use, is this a good or bad thing?
(3) Do I need to only use a certain percentage of the available lines that are available to me and should I rotate on the cards in some kind of way?
(4) Any other info you can provide that would be useful would be GREATLY appreciated.
THANKS!!!!!!!!!!!!!!!!!
(1) I am unsure about the utilization percentage that I should or should not use. My plan was to use my lines like I would my debit card, paying them off immediately after I use them, but I am not sure if that is what I should be doing.
It seems like the general consensus around here (with some different opinions) that no more than half of your open revolving accounts should report a balance each month with any reporting accounts having less than 9% utilization. In my case I just have one card report each month. But don't let all your accounts report a zero balance. You'll actaully get penalized for that. FICO likes to see some activity but not too much.
(2) If I pay off the balance immediately after use, is this a good or bad thing?
Pay off any balances before the statements post except for the card(s) you decide to report at less than 9%. Then pay those in full before the due date to avoid any interest charges.
(3) Do I need to only use a certain percentage of the available lines that are available to me and should I rotate on the cards in some kind of way?
I have each of my cards pay a different monthly recurring bill with automatic billpay. That way I don't have to keep up with which card needs to be used this month, quarter, etc. It works very well for me but I don't have all that many accounts to track. Or you can just rotate usage each month.
(4) Any other info you can provide that would be useful would be GREATLY appreciated.
Always pay on time, keep your utilization low, don't apply for new credit very often, and let those accounts age and you'll be just fine. You'll get there if you keep at it. Good luck to you.
(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802
CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".