Bringing my scores up to 800

[unctarheel08]

ok, so you mean that 'sweet spot' that people keep referring to...in other words the utilization % between 1% and 9% that makes your score the highest and seems to differ from person to person?

also, if i use the same card from month to month and 'sock drawer' the other one, isn't that a bad thing? i've read a few places that you should put a small charge or two on the card every once in a while...how often should i do this? also, will i be ineligible for CLI, etc. for the unused card? once i get the credit union card, i'll probably use it in lieu of the wells fargo one...lower interest rate and higher CL makes it the better card.

i have to admit, i've never checked my score...i'm fairly new to managing my credit. i did look at my credit report and it's clean--pulled yesterday for the new credit card--only shows my WF credit card and auto loan. the loan officer would not tell me my score, though, quoting some deal the credit union made with equifax about not disclosing the scores to customers...ugh.

i'll check it sometime in the future, but would like to wait a bit until this inquiry goes away. also, may invest in that scorewatch i've heard people talking about lately. i don't plan to do anything drastic in the next 6-12 months...just going to keep these two cards and hopefully grow with them for a while.

thanks again for the info.

[llecs]

It's a YMMV thing. Now were only talking a few points either way in the single digits at best, but if that one card is under 9%, some have reported slight gains by having the card at 3% vs. 2% or 6% vs. 5%. It is different for everyone and there's nothing cast in concrete. You'd have to expirement on a monthly basis to see how it impacts your score.

IMO, use your CCs every 3-4 months at a minimum. Some CCCs like to close inactive cards and buying a cup of coffee or a pack of gum every so often will prevent its closure. And not every CC is that bad, but you can never be too cautious if you want to keep it open. Per CLIs, YMMV based on the issuer. I've received CLIs on cards I haven't used in a year, and I don't care if they closed either.

Pulling your own scores will never hurt your credit or scores. A hard inquiry is never added, unless a lender pulls your credit due to an app. I use SW and is pretty good. If you think you might pull your reports frequently, then having SW will give you a $5 discount off all future EQ pulls (aside from the 2 free you get with the service). Everyone's goal is different. I like to see changes as they occur and like to know the impact of those changes on my scores so I subscribe to a daily puller CMS and pull my reports everyday. As changes occur, then I go to myFICO and pull my reports to track those score changes. We're about to buy a home and being on top of things is important to us. Once we buy, then we'll back off and pull quarterly or so.

[unctarheel08]

sounds good...i guess i'll use both cards to keep them open, just PIF one before it reports and pay the other down to <10% utilization before reporting. thanks for your help.

[vanillabean]

"Everyone's goal is different."

Yes and no

Nearly everyone at all times would like to see their score being as good as possible. That's their overall goal (although often not the primary focus), and that's almost as universal as breathing the air.

By "good", I mean the score should be positioned to benefit from various stuff such as low loan rates and getting the cards that are right for you. Or simply sleeping well at night.

"We're about to buy a home and being on top of things is important to us. Once we buy, then we'll back off and pull quarterly or so."

This is a specific area in which we differ. My situation is exactly opposite. I did not get interested in the whole credit score thing until just after we had refinanced (and gotten two cards at the same time!).

I pretend my goal is a Discover card. But deep down I have this hunch that once I get there and have cleaned up my credits, the process of getting there has had the impact on my outlook to the extent that I may simply dismiss the goal.

That's ok too. By then I'll know what my score is at the 0% util baseline and what my sweet spot is. I'll have exercised every tiny corner I could possibly think of.

And still be years away from the rocking chair on the porch.

[Anonymous]

I hate the Big Banks etc. I nearly paid off a credit card with a payment of $13,000, still have $500 to pay on it.  So what does the bank do, lower my credit limit to $500!!  So now it looks like I am up to my limit.  Then when I called to inquire why, they said it looked "fishy" to make such a large payment when I had been paying the minimum payment (500) for so long and wanted to know where I got the money to pay!!!!!!!!!!!!! ( It was an inheritance. Trying to get out of debt.) Paying off the large annual % first.  My question is...why does it hurt your credit reports to close an account that you have paid off?  I do not want to give these scumbags any more of my money by paying an annual fee of $90 just to keep it open.  Because I was ONE day late ONE time due to using a new bill payer system they raised the percentage to 29%. I nearly died! Anyway I am conflicted with what to do. My fico score right now is 720.

[MarineVietVet]

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@Anonymous wrote:

I hate the Big Banks etc. I nearly paid off a credit card with a payment of $13,000, still have $500 to pay on it.  So what does the bank do, lower my credit limit to $500!!  So now it looks like I am up to my limit.  Then when I called to inquire why, they said it looked "fishy" to make such a large payment when I had been paying the minimum payment (500) for so long and wanted to know where I got the money to pay!!!!!!!!!!!!! ( It was an inheritance. Trying to get out of debt.) Paying off the large annual % first.  My question is...why does it hurt your credit reports to close an account that you have paid off?  I do not want to give these scumbags any more of my money by paying an annual fee of $90 just to keep it open.  Because I was ONE day late ONE time due to using a new bill payer system they raised the percentage to 29%. I nearly died! Anyway I am conflicted with what to do. My fico score right now is 720.

---

Hello and welcome to the forums.

It doesn't hurt your score at all to close a paid off account in good standing. It will continue to report for up to 10 years after closing which helps your AAoA and credit length history. Here is an excellent thread about Closing Credit Cards.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
6/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[Anonymous]

"i usually pay the balance down to between 1-9% on the 21st or 22nd of the month and stop using the card until after the statement cuts, then the day after the statement cuts i PIF (so i can avoid any interest charges, since minimum payment is due by the 20th of the month)."

My total credit limit is $19,000, my current balance is $150.

I still do not understand how to utilize this strategy properly. So would someone please explain in painstaking detail? Also, please answer the following questions:

So, my current statement closes on August 26th, my mimimum payment of $15 is due on the 20th. What do I need to do 1.) Show utilization between 1-9% and 2.) Avoid paying any interest?

When should I pay off the remaining balance of $150?

I have two other cards that I have not been using, but I will start using them a couple times a month so I can increase CLs in the future. When I being using them every month when should I pay the balance off given I am only using the utilization strategy on the first card?

[unctarheel08]

"I still do not understand how to utilize this strategy properly. So would someone please explain in painstaking detail? Also, please answer the following questions:

So, my current statement closes on August 26th, my mimimum payment of $15 is due on the 20th. What do I need to do 1.) Show utilization between 1-9% and 2.) Avoid paying any interest?"

1) Since your statement closes on 8/26, pay off your balance to between 1-9% around the 22nd/23rd of the month and STOP USING THE CARD until your statement closes on the 26th. This will ensure that your statement amount will be between 1-9%, and that this is the utilization % that will be on your credit report (with a few exceptions, like HSBC who reports the balance as of the last day of the month)

2) To avoid interest, PIF THE DAY AFTER your statement closes. this concept is pretty simple--say your statement amount is $100. your minimum payment amount is $5. if you decide to only pay $5, you will be charged interest on the remaining $95 of your statement amount (provided no other payments are made during the month and you carry this balance to the next month). by PIF your statement amount the day after (or technically anytime before the 20th) you avoid ever paying interest on your card. the reason most people suggest PIF the day after and not waiting until the 20th, is because it's easy to forget to pay your bill down and miss the 20th deadline, since you've just made a large payment a few days prior to the statement (see above, you make a payment on the 22nd to get your balance down to between 1-9%), so essentially you're making two payments within 5-6 days of each other so you can control what BALANCE shows up on your statement and subsequently on your credit report.

The point of the strategy is to control the AMOUNT that reports on your statement. you can use your card FREELY for most of the month as long as you pay it down to 1-9% utility a few days before your statement closes. this way the AMOUNT that reports is always between 1-9%. interest is charged when you don't PIF your statement amount by the due date; therefore, with this method you PIF your statement amount the day after the statement closes to avoid any confusion and not pay any interest for the month.

"So, my current statement closes on August 26th, my mimimum payment of $15 is due on the 20th. What do I need to do 1.) Show utilization between 1-9% and 2.) Avoid paying any interest?

When should I pay off the remaining balance of $150?"

If your current statement amount is $150, you should PIF the $150 anytime before the 20th of the month (however, i would go ahead and do it today). by PIF your statement amount, you ensure you aren't hit with any interest charges.

Note: make sure you are not confusing your statement amount with your current balance. your statement amount, is the amount that appeared on your last statement, while your current balance is the amount that is currently on your card. therefore, you could have a statement amount of $150 with a current balance of $10,000--due to additional charges you've made since your statement hit. make sense? it's necessary to PIF your statement amount before the 20th (i like to do it the day after the statement hits with the method i explained above) to avoid any interest charges. you should pay down your current balance to between 1-9% a fe wdays before your statement hits (and stop using your card until after the statement hits), to control the balance reported on your statement/credit report.

"I have two other cards that I have not been using, but I will start using them a couple times a month so I can increase CLs in the future. When I being using them every month when should I pay the balance off given I am only using the utilization strategy on the first card?"

this is a YMMV type of issue.

some people suggest that if you have three cards, you should only let one report a balance. in which case, you would PIF the current balance on your two secondary cards before the statement hits each month. again, this doesn't mean you have to change the way you use the card, just control the amount reported on the statement by PIF (and stop using the card) a few days before the statement cuts, so the balance reported on the statement/your credit report is $0. with this method, one card would report between 1-9% utilization (using the method above) and your other two cards would report $0 each month.

others suggest reporting small balances (between 1-9%) on each card, using the method i described above. with this method, each of your three cards would report between 1-9% utilization each month.

you should try each method and see which has the most positive affect on your score.

hope that helps! if not, let me know and i'll try to go into more detail...

-waystinthyme

[Anonymous]

Alright, I am getting very close to finally understanding this.

I still have a question about #1 "1) Since your statement closes on 8/26, pay off your balance to between 1-9% around the 22nd/23rd of the month and STOP USING THE CARD until your statement closes on the 26th. This will ensure that your statement amount will be between 1-9%, and that this is the utilization % that will be on your credit report (with a few exceptions, like HSBC who reports the balance as of the last day of the month"

Say my statement amount is $100, and my balance is $1000, so on the 22nd I pay $980, so my remaining balance is $20 making my util 2%. How do I know that the $980 that I paid will not wipe out my statement balance entirely, thus reporting 0?

[unctarheel08]

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@Anonymous wrote:

Say my statement amount is $100, and my balance is $1000, so on the 22nd I pay $980, so my remaining balance is $20 making my util 2%. How do I know that the $980 that I paid will not wipe out my statement balance amount entirely, thus reporting 0?

---

i think you almost have it...hopefully this clears it up:

if your statement amount is $100, you should PIF this entire amount on the day after your statement hits. for my card, my statement hits on the 26th with minimum payment due on the 20th of the following month. I go ahead and PIF my statement amount on the 27th so i don't have to worry about paying it later on (see further reasoning in my previous post).

now, after you PIF your statement amount, if you end up with a $1,000 balance on the 22nd, then yes, paying $980 on the 22nd would be the correct thing to do. then, STOP USING THE CARD until your statement comes out. once your statement comes out, it should report a statement amount of $20. on the day after go ahead and PIF that $20, and repeat the process all over again.

make sense?

as for your second question, you always want to wipe out your statement amount entirely, so you can avoid paying interest. you do this by PIF your statement amount on the day after your statement comes out.

if you really meant balance instead of statement amount (in your second question): you would know that you weren't wiping out your entire balance because your payment was for less than the current balance on your card. i.e. you can't wipe out a $1,000 balance with a $980 payment, it's not like the credit card company will cover the leftover $20 for you. this balance will remain on your card and report on your next statement.

again, i think you may be getting statement amount and current balance confused. different people use the terms in different ways, but try to refer to my previous post to see how i specifically use these terms.

here is the way I define these two terms:

Note: make sure you are not confusing your statement amount with your current balance. your statement amount, is the amount that appeared on your last statement, while your current balance is the amount that is currently on your card. therefore, you could have a statement amount of $150 with a current balance of $10,000--due to additional charges you've made since your statement hit.

Your statement amount and balance will only be the same after your statement comes out and before your make any purchases on your card.

Using your scenario above: Your statement comes out on the 26th, and reports $20. Since you paid your balance down to $20 back on the 22nd, and stopped using your card, your statement amount and balance on the 26th are the same: $20. Once your make a purchase your balance will change ($20, your statement amount + the amount of your purchase), but your statement amount (the remaining balance from the previous month i.e. the amount that appeared on your statement) will rmeain the same, $20.

"So, my current statement closes on August 26th, my mimimum payment of $15 is due on the 20th."

I missed this the first time I read your post. Go ahead and PIF your statement amount before the 20th, otherwise you will be paying interest on that amount. In the future, using the utilization method, you will PIF this statement amount the day after your statement comes out, so you don't have to worry about remembering to pay it later on in the month.

hope that helps...

-waystinthyme

p.s. you may want to 'subscribe' to this post so you get your answers quickly. when you reply, make sure you 'check off' the box that says 'email me when someone replies' below the area where you type your reply.