Store card usage

[jinmikesung]

Hello all,

Recently, I got approved for Buckle($500), Kohls($300) cards. 

I would like to know what is a best way to manage them?

Shoud I purchse a single item (around $20-30) and fully paid off next month? or leave around $5-10 every month and pay rest? 

I want to build a strong profile.

Thank you

[gdale6]

You want only 1 of your credit cards reporting a balance of no more than 9% of its CL to the CRAs if you are trying to maximize your score.

[redbeard]

It depends what your short term / long term goals are and what else you have in your credit file.

For the most part, if you want to grow your credit score but aren't worried about maximizing points right now, then you prmarily want to let these accounts age to build your AAoA (average age of Accounts).  This will help you in the long run.

You need to use the cards occassionally, and you may need to use them initially to get them to report monthly that they are paid on time.  You do not need to use them every month, maybe once every 4 months or so, to get some activity on them.  Buy something you need or something small and then pay it off.  The card company wants you to have some activity on it.

Every 4 months, ask for a credit line increase as long as its a soft pull.  As the credit line increases, you will probably need a bit more activity, but don't worry about that just yet.

If you need at some point to maximize your score, let one report a balance of less than 10% and your score will bump up.  After that, just pay it off again.  

Dan

[jinmikesung]

Thank you Dan.

I am trying to maximize my score, so I can qualify for a auto loan end of this year. 

So if I buy from Kohl's & buckles for a small stuff and pay off Kohls, but leave buckles with 10%, will it help to build my score? 

[DantGwyrdd]

I'd sooner leave it at Kohls, I don't know if this is still valid, but I called them a few years back and found out that (at least at the time) they don't report to the credit bureaus every month (they do eventually, just not every month) if your account doesn't generate a statement and the store cards usually don't generate one for 0 balance accounts.

[jinmikesung]

Thank you @Dant. 

I will try to buy a small item every month and pay off every time

[takeshi74]

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@jinmikesung wrote:

Shoud I purchse a single item (around $20-30) and fully paid off next month? or leave around $5-10 every month and pay rest? 

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You never need to carry a balance for scoring purposes.  Make sure you understand the difference between allowing a balance to report and carrying a balance as well as current balance versus statement balance.  Most cards report on statement date so if you have a balance on that date then that is the balance reported.  If you want a lower balance to report then you need to reduce the balance prior to that date.

Whether or not you're adjusting the reported balance pay the statement balance in full by the due date to avoid paying interest.  If you adjusted the reported balance then you only need to pay the remainder of the statement balance.

Generally though just keep utilization under 30%.  You can optimize to only one balance at 10% or less when you're ready to app.