CC question?

[Bri89]

Hello all,

I am in the process of rebuilding my credit. So far so good. I have been following all the rules Any how I have a question: I have 3 CC's and I am wondering how should I go about leaving balance/or paying them off every month, basically how will it benefit my credit best.

Major CC- pay off every month or leave at a balance between 1-9%?

Department Store CC-pay off every month or leave at a balance between 1-9%?

Department Store CC-pay off every month or leave at a balance between 1-9%? (this one is a tire card so it's hard to use every month only for emergencys)

Advice please?

[LIGHTNIN]

Hi Bri89,

I dont know the answer to your questions...

But I've seen threads about the 9%rule on the other board...Understanding your FICO scoring.

I would only tweek my score like this, if I were going to apply for a CC or loan. (but thats just me)

[Revelate]

Right now it's immaterial: just make the payments on time every time and that alone will do your score right in the long run.

When you get to the point of trying to maximize your instant in time score for a given application (loan, credit card, whatever), that's when the balances actually matter and where I'd really try to get everything paid or under 9%... it varies a little bit by individual user with whatever else is in the credit report, so there's no fixed rule but some/many people here report having one card with 9% or lower utilization, and everything zero'd works best for them.

In general, I'd recommend paying more than the minimum or PIFing every month anyway just to prevent debt from piling up, and also so that when you do decide to max your score via the above or similar metrics, you can cover the markers pretty easily without a large sudden cash need.

[Bri89]

Right now I am needing to maximize it because I just got approved for a mortgage (passed that minimum requirement) but the house I have choosen will have to be built therefore I have about 6 months to try and get my score at about a 670 ideally for a better interest rate. So thanks for answering my question, much appreciated!

[MarineVietVet]

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@Bri89 wrote:

Right now I am needing to maximize it because I just got approved for a mortgage (passed that minimum requirement) but the house I have choosen will have to be built therefore I have about 6 months to try and get my score at about a 670 ideally for a better interest rate. So thanks for answering my question, much appreciated!

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Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".