@Anonymous wrote:I guess I just need some basic help. I have three cards: 1 secured $501, 1 unsecured $3000, and 1 unsecured as an authorized user $2000. I was told the best way to increase score using cards is to pay it down to 20% a few days before the statement date, then two weeks later, pay it down even more. Is this accurate? If I always pay it to 20%by the statement date, how are credit bureaus seeing my activity? Should the secured and authorized user card stay at $0 balance? or just a small balance?
Yes, technically to maximize score you want to have one card reporting some fairly small utilization, however be advised the score improvement may not be a huge amount of points. For regular months where you are just using the card, it is a lot easier to just pay after the statement cuts. While monitoring your scores, you can then see for yourself how that affects your score, month to month. When you think an app is approaching, then you will have some real data to know whether paying before statement cut will give you some boost in points, or not.
All files are different, and the number of points from percent of cards and utilization varies. The largest influence on scores is length of time the file is open, and whether any payments have been missed.
@NRB525 wrote:
@Anonymous wrote:I guess I just need some basic help. I have three cards: 1 secured $501, 1 unsecured $3000, and 1 unsecured as an authorized user $2000. I was told the best way to increase score using cards is to pay it down to 20% a few days before the statement date, then two weeks later, pay it down even more. Is this accurate? If I always pay it to 20%by the statement date, how are credit bureaus seeing my activity? Should the secured and authorized user card stay at $0 balance? or just a small balance?
Yes, technically to maximize score you want to have one card reporting some fairly small utilization, however be advised the score improvement may not be a huge amount of points. For regular months where you are just using the card, it is a lot easier to just pay after the statement cuts. While monitoring your scores, you can then see for yourself how that affects your score, month to month. When you think an app is approaching, then you will have some real data to know whether paying before statement cut will give you some boost in points, or not.
All files are different, and the number of points from percent of cards and utilization varies. The largest influence on scores is length of time the file is open, and whether any payments have been missed.
For FICO 08 scores, you want one card reporting a small amount, but not so small that the credit company decides to forgive the small amount, which would leave you with 0 on the card you are trying to have a small balance on. All other cards should report $0 balance. We usually suggest 1% - 9% on one card, but technically the lower the better as long as its at least a couple dollars. But, the benefits you get for being at $2 balance versis 5% balance on that one card is almost negligible. In other words, its usually not worth it to try to micromanage things to that extent.
Having said that, here is a clearer explanation: http://ficoforums.myfico.com/t5/General-Credit-Topics/How-do-I-play-the-1-9-Utilization-Game-Please-Help/m-p/2471257#M199479
Also, if you do not have any open credit besides credit cards, this technique can be very beneficial, IF you do it correctly (ie, by using Alliant Credit Union): http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756#M106741
@Anonymous wrote:I guess I just need some basic help. I have three cards: 1 secured $501, 1 unsecured $3000, and 1 unsecured as an authorized user $2000. I was told the best way to increase score using cards is to pay it down to 20% a few days before the statement date, then two weeks later, pay it down even more. Is this accurate? If I always pay it to 20%by the statement date, how are credit bureaus seeing my activity? Should the secured and authorized user card stay at $0 balance? or just a small balance?
Best is to pay 2 of them down to zero before the statement date, with the 3rd reporting a small balance of 10% or less
