General Credit Topics

[Redbud]

I thought the idea was not to open any new credit cards, however, I just read a long post in the Veni, Vidi, Vinci, Visa or How to Master Your MasterCard section where he suggests opening a new account and  have no late payments.  I think this was to balance out the negative account(s) and rebuild a solid account.

My score is low 500, I currently have 3 charge cards and two dept store.  Should I open an Orchard MC/VISA and perhaps use it only for gas to I keep it low and can pay it off????

[Tuscani]

Yes you should.

[Redbud]

Thanks Tuscani for your reply.  I applied to Orchard online and was approved even though it's a low credit limit.  I'll use it strictly for gas and set it up for automatic payment.  I'd like to ask you another question:

Is it better to pay off all my balances at the present time, or, get them all under 30% utilization and then pay them monthly on time?

[Timothy]

Get them under 10% asap.

Then keep them between 1-9%

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Redbud wrote:

Thanks Tuscani for your reply.  I applied to Orchard online and was approved even though it's a low credit limit.  I'll use it strictly for gas and set it up for automatic payment.  I'd like to ask you another question:

Is it better to pay off all my balances at the present time, or, get them all under 30% utilization and then pay them monthly on time?

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[Redbud]

Thanks for your response.  In all the material I read on the myFICO site and a couple of others it said you should keep utilization on a card at 30% or lower.  Is keeping it at 1-9% just taking it up a notch in terms of raising my credit score?

[MidnightVoice]

The consensus is that 1-9% is the optimum level for a maximun FICO score.  If your FICO is important (eg for getting a new loan or mortgage) this is the way to go.

[Redbud]

Thank you!  I am learning sooooo much through these forums.  I have become FICO-obsessed!  Is that an acronym FO (FICO Obsessed!)?    I am not shopping for a mortgage or loan presently, but I do want to seriously raise my score since it's in the low 500s!!   I travel a lot for business, and need to use my card alot so I'm not sure I can consistenly keep it at 9% util.  That depends alot on how soon my clients reimburse me for the travel expenses. I really hate to take money out of savings to pay these balances, but I guess that's the best thing to do huh? That's gonna hurt!

9% will be my goal!!