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Which is better to raise scores, dont use credit card or pay it off each month you use it

Super Contributor

Which is better to raise scores, dont use credit card or pay it off each month you use it

Which of the following will help raise your score:
 
1.  Dont use credit cards at all and keep account open with 0 balance. (no activity)
2.  Use credit card and pay it off each month. (activity each month)
3.  Maintain a small balance each month. (activity each month)
4.  Use credit card once every 2 months or so and pay the balance off. (activity ever so often).
 
 
Also is there a diference between pay the minimum payment each month (ignore % balance) and new charges in terms of activity on the account.  Does it matter anyway.
 
Thank you.
 
 
01/23/2018: FICO 829 EQ 827 TU 831 EX
Message 1 of 6
5 REPLIES
Moderator Emerita

Re: Which is better to raise scores, dont use credit card or pay it off each month you use it

Your best bet is to play what people have started calling "the FICO game." Scores reflect what's on your reports. If you can control what reports, you can control your scores, or at least the utilization portion. Your scores are rewarded if the FICO formula can see that you use your credit (don't park them all), but just barely. The assumption is that you are credit-worthy and credit-smart. Here's how the game is played:

--Let half or fewer cards report each 30-day cycle. If you have 2-3 cards, let one report; 4-5 cards, let two report; and so forth.
--Know when your cards report, so that you can control how much reports. Most, not all, report on their statement date, which is the date that your statement "drops." This is usually 2 1/2 - 3 weeks before the due date. HSBC cards usually report at the end of the month. Some cards report at strange times.
--Aim for 1-9% util, meaning under 10%, on the cards that report. So whatever your CL is, knock off the last zero, and only let less than that report. For a $1000 CL, knock off the last zero (--> $100); let $10 - $90 report.
--About 4 or 5 days before an individual card is due to report, pay down (or charge up) online to whatever figure you want to report. Then don't use it until after it reports. Then, if you did have a balance report, go ahead and PIF it.

Then start all over again! An example:

Card A: $1000 CL / $87 reports / 8.7%
Card B: $1500 CL / $75 reports / 5%
Card C: $500 CL / $0 reports / 0%
Card D: $750 CL / $0 reports / 0%
Card E: $500 CL / $0 reports / 0%

overall util: 4%

This is a pretty high-maintenance way to live the rest of your life, but it's a great way to get a quick score boost. You might try it for 1 month just to get a feel for how it works, and to see what your scores can do. Then if you know that you will be applying for something, start this up again about 6-8 weeks beforehand to let everything cycle through. In the meantime, don't let the balances creep back up, so that if necessary, you can quickly knock everything back down again. Some people do this on a regular basis though. They only use one or two cards in any given month, control what reports on them, pay them off, and start up again the next month.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 6
Moderator Emerita

Re: Which is better to raise scores, dont use credit card or pay it off each month you use it


marty56 wrote:
Which of the following will help raise your score:
1. Dont use credit cards at all and keep account open with 0 balance. (no activity)
2. Use credit card and pay it off each month. (activity each month)
3. Maintain a small balance each month. (activity each month)
4. Use credit card once every 2 months or so and pay the balance off. (activity ever so often).
Also is there a diference between pay the minimum payment each month (ignore % balance) and new charges in terms of activity on the account. Does it matter anyway.
Thank you.



Sorry--here's the short version!

1. No
2. see above--just time it right and get the low util showing
3. sort of--don't let it carry over, though, no point in paying interest
4. sort of--once every 6 months ought to keep it from going inactive.

Just remember that you can control what reports to the CRA's by timing your payments. The CCC's don't care what reports. They just like to see that use you it. They know how much total you've charged through the month, which is how some companies decide whether to give you a CLI.

Message Edited by haulingthescoreup on 11-22-2007 10:50 AM
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 3 of 6
Super Contributor

Re: Which is better to raise scores, dont use credit card or pay it off each month you use it

Thank you for the responses. 
 
I will use my Sams card and my Gas card to play the game since they both will be paid off in less then 2 months.
 
As a side note, can I use my Score Watch alert to let me know when the Sams card and the gas card reports?
 
Otherwise I will use it 4 or 5 days before the statement date.
 
Thanks again...
 
 
01/23/2018: FICO 829 EQ 827 TU 831 EX
Message 4 of 6
Moderator Emerita

Re: Which is better to raise scores, dont use credit card or pay it off each month you use it

Unfortunately, no. The CRA's don't report to FICO the exact day of the month that something posts, so you can't get it off the FICO report. Chances are it's the statement date, though.

If you want to be sure, you can do a trial of TrueCredit's 3-in-1 monitoring service or a similar one that pulls all three reports. TC shows the exact posting date (mm/dd/yyyy) for TU and EX, but not for EQ. I can't bring up any trial offers, because TC knows my computer and keeps taking me straight to the membership screen. I'm sure some of the other monitoring services show the full date on at least one report, but I don't know which ones they are.

You can also call your CCC and ask them. If they sort of stammer around or blow you off, ask for a supe and keep going up the chain until you find someone who knows. Some companies just won't tell you, though. hope that helps
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 5 of 6
Super Contributor

Re: Which is better to raise scores, dont use credit card or pay it off each month you use it

That is very helpfull  Thank you.  I will post my results.
01/23/2018: FICO 829 EQ 827 TU 831 EX
Message 6 of 6