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Regular Contributor
Posts: 243
Registered: ‎02-29-2012
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Will this look bad to a creditor?

[ Edited ]

I have a Discover More card that I just opened up 2 weeks ago. My credit limit is 1,000. However, after going through my monthly budget, I spend around $1,500. Should I use the card up to my limit, PIF, then continue using my card? Will I continue to earn cash back?

Zync from American Express- NPSL
Amex BCE- $1,000
Discover IT- $1,500
Bank of America 1-2-3 Rewards-$1,000
Chase Freedom- $500
Capital One- $500
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
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Re: Will this look bad to a creditor?

[ Edited ]

GoldenloveNY wrote:

I have a Discover More card that I just opened up 2 weeks ago. My credit limit is 1,000. However, after going through my monthly budget, I spend around $1,500. Should I use the card up to my limit, PIF, then continue using my card? Will I continue to earn cash back?


No. Stop.

 

Discover will less likely extend you any more credit if you appear maxed out. They can even decrease your credit limit if you max out every month. Even if you PIF.

The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






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Registered: ‎10-03-2012
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Re: Will this look bad to a creditor?

I'd use no more than about 50% of your limit and pay before your statement cuts to avoid any util issues. 

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Regular Contributor
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Re: Will this look bad to a creditor?

[ Edited ]

Thanks. 

Zync from American Express- NPSL
Amex BCE- $1,000
Discover IT- $1,500
Bank of America 1-2-3 Rewards-$1,000
Chase Freedom- $500
Capital One- $500
Frequent Contributor
Posts: 358
Registered: ‎06-25-2012
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Re: Will this look bad to a creditor?


maiden_girl wrote:

GoldenloveNY wrote:

I have a Discover More card that I just opened up 2 weeks ago. My credit limit is 1,000. However, after going through my monthly budget, I spend around $1,500. Should I use the card up to my limit, PIF, then continue using my card? Will I continue to earn cash back?


No. Stop.

 

Discover will less likely extend you any more credit if you appear maxed out. They can even decrease your credit limit if you max out every month. Even if you PIF.


I'm not sure why you would say that. Both of my Discover More auto-CLIs were granted after I maxed out my card and only paid the minimum every month.

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Re: Will this look bad to a creditor?

[ Edited ]

SwampSystems wrote:

maiden_girl wrote:

GoldenloveNY wrote:

I have a Discover More card that I just opened up 2 weeks ago. My credit limit is 1,000. However, after going through my monthly budget, I spend around $1,500. Should I use the card up to my limit, PIF, then continue using my card? Will I continue to earn cash back?


No. Stop.

 

Discover will less likely extend you any more credit if you appear maxed out. They can even decrease your credit limit if you max out every month. Even if you PIF.


I'm not sure why you would say that. Both of my Discover More auto-CLIs were granted after I maxed out my card and only paid the minimum every month.


Not certain I'd advocate only paying the minimum, but I agree that maxxing a tradeline isn't itself a problem.  Lenders really don't care about a line that's maxxed in a given month, it's when that tradeline stays maxxed with a minimum payment month after month where they start getting edgy... and worse when your other revolving balances are also increasing.

 

I know the economic times are wonky, but the more you use a card, the more you demonstrate your financial ability and the more likely you are to receive CLI's with pretty much any lender in my opinion with few exceptions (*cough* C1).  

 

Personally I run everything through a rewards card, at first was my BOFA 1-2-3 secured, and now my Zync (since the bulk of my spending is restaurants anyway), it not only demonstrates what I can reliably pay off, but also what my spend is, which helps not only with the lender in question, but every other lender as well.  I don't see any downside to maxxing a card if you're PIFing, the only possible issue is one's FICO if you let that balance report, but that's easy enough to manage and since FICO has no memory on the revolving utilization calculation, so you can always fix that next month.

 

Starting Score: EQ 04 561, TU 98 567, EX 98 599 (12/30/11)
Current Score: EQ 04 700, TU 04 731, EX 98 725 (05/24/15)
Goal Score: 700 on EQ 04 (01/01/16)


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Re: Will this look bad to a creditor?



SwampSystems wrote:

maiden_girl wrote:

GoldenloveNY wrote:

I have a Discover More card that I just opened up 2 weeks ago. My credit limit is 1,000. However, after going through my monthly budget, I spend around $1,500. Should I use the card up to my limit, PIF, then continue using my card? Will I continue to earn cash back?


No. Stop.

 

Discover will less likely extend you any more credit if you appear maxed out. They can even decrease your credit limit if you max out every month. Even if you PIF.


I'm not sure why you would say that. Both of my Discover More auto-CLIs were granted after I maxed out my card and only paid the minimum every month.




I don't know how you got an increase maxing the card out and only paying the minimum. Its never a good idea at any moment to do that even if you PIF monthly, IMO. It reports to the CR and next to CL is high balance and if someone happens to pull your CR and they see THAT they tend to not give as much credit b/c they are afraid you're not going to be able to afford/handle a large credit line. It's like having 10 credit cards and charging the full line on it just b/c you have it..

 

The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






Valued Contributor
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Registered: ‎10-02-2012
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Re: Will this look bad to a creditor?

[ Edited ]

You can max the card out and PIF as many times per month as you want. The creditor will actually see that you have a steady stream of income and simply need a larger line of credit. They will grant you a nice increase in 6 months. The only problem will be that it is likely reporting high utilization, this is only a problem if you are actively seeking new credit. Down the road when you seek new credit, just make sure the card is paid down to around 5% for a month before you apply for the new credit account.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


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Regular Contributor
Posts: 148
Registered: ‎09-26-2011
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Re: Will this look bad to a creditor?


Dustink wrote:

You can max the card out and PIF as many times per month as you want. The creditor will actually see that you have a steady stream of income and simply need a larger line of credit. They will grant you a nice increase in 6 months. The only problem will be that it is likely reporting high utilization, this is only a problem if you are actively seeking new credit. Down the road when you seek new credit, just make sure the card is paid down to around 5% for a month before you apply for the new credit account.



+1 I agree. This is what I have been doing since I have been rebuilding my credit and it has worked wonder for me with both getting new CC and CLI. I don't think the creditor really care about it as long as you pay them back.

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Re: Will this look bad to a creditor?

[ Edited ]


+1 I agree. This is what I have been doing since I have been rebuilding my credit and it has worked wonder for me with both getting new CC and CLI. I don't think the creditor really care about it as long as you pay them back.


Not only do they not care. They get a huge amount of merchant fee's from the charges you make. So they like it, and are glad to extend you more credit.

 

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