@Anonymous wrote:
Hello all!
I'm new to the forums and just had a couple questions about how to maximize building my Fico score. I just recently started to build up my credit so here's some quick backstory: I got my first card through USAA in September of 2013 but it only has a $300 limit. I have always been very responsible with that card since day one, I only use it every once in a while and never put more than $30-40 on it. I also always pay it off in full and have never been late on a payment. A couple weeks ago I applied and was approved for the Amex Everyday Preferred card with a $3,500 limit. My score was 702 before I applied. Those are the only two cards I have, no auto loan, mortgage, etc. My question is where do i go from here? Any advice? Should I try and get another card or just use the ones I have for now?
Also a few more questions:
-As for utilization, should I just strictly use one card? For example now that I have the Amex card just use that for my purchases, (of course not going above 30% utilization) not the USAA one? Also is it better if the cards I'm not using report a balance of $0 or just a few dollars to show that you are using them?
-Is it better to be around 30% credit utilization or around 10% in order to maximize my score? As in is it better to show that I am spending some money responsibly or is it more advantageous to me to be as close to 0% as humanly possible?
-One final potentially dumb question: I should let my balance run until the end of the billing cycle and it reports rather than paying it off immediately correct?
Sorry for the long post. Thanks in advance for any help!
Welcome to the forums. My suggestion and answers,
Now that you have the EDP card I would try and apply for a 3rd card, preferably a Visa or MasterCard. Try looking at the reapproval sites for Chase and Citi. While just a guide they might show some approvals. The Chase Freedom might work well for you.
For utilization, you can use all 2 or 3 cards and have utilization above 30% as long as you don't let the cards report higher than that. Example. It's no issue charging $2500 on your EDP as long as you pay it completely off or down substantially before it reports to the credit bureaus. For maximum scoring purposes you would ideally have 2 cards report $0 balances and the 3rd one a small (lime $15 dollars) balance. You still want to pay the third card completely off by the due date in order not to incur interest charges.
10% utilization is always better than 30% but ideally you would follow the formula I explained above.
Whatever balance you have at the time the statement cuts is what usually is reported to the credit bureaus and affects your score appropriately thus why you want to pay the balance off prior to that.
I hope that this helps and we are here if you have additional questions. Good luck.
