topic Re: what's the difference (postivie scoring wise) between those options? in Credit Cards

what's the difference (postivie scoring wise) between those options?

Anonymous — Tue, 03 Nov 2009 18:04:12 GMT

hello,

i just got a secured (temporary, cause they don't know me) credit line from my bank, and i'm trying to build up a good credit score (and a credit score in general). i'm getting notifications from the bank, and i need to make payments to my CC account.

i want to know what w'd affect my credit score in the best way:

1. paying the minimum or somewhere between the minimum and the full amount of my credit line (which will give the bank some interest on my money... is that gonna build more/better credit?)

2. paying it in full - zero the whole thing out and top my credit line back to what it is when it's full (won't give the bank any interest on my money - will that cause them to report bad/worse/no credit to the credit bureaus?

any info will help.

thanx!

Re: what's the difference (postivie scoring wise) between those options?

Anonymous — Tue, 03 Nov 2009 18:12:21 GMT

I don't think it matters as much in scoring whether you keep a low balance or PIF. Whether or not the bank gets any interest isn't factored into FICO in any way. If you are able, you should prolly PIF as often as possible just in case something happens and you can't, then you won't build up such a balance. I've seen people on here that even go and pay immediatly each time they make a purchase, I'm not that adamant, but I do PIF whenever I can.

Someone please correct me if I'm wrong about this.

Re: what's the difference (postivie scoring wise) between those options?

MarineVietVet — Tue, 03 Nov 2009 18:46:59 GMT

@Anonymous wrote:
hello,
i just got a secured (temporary, cause they don't know me) credit line from my bank, and i'm trying to build up a good credit score (and a credit score in general). i'm getting notifications from the bank, and i need to make payments to my CC account.
i want to know what w'd affect my credit score in the best way:
1. paying the minimum or somewhere between the minimum and the full amount of my credit line (which will give the bank some interest on my money... is that gonna build more/better credit?)
2. paying it in full - zero the whole thing out and top my credit line back to what it is when it's full (won't give the bank any interest on my money - will that cause them to report bad/worse/no credit to the credit bureaus?

any info will help.
thanx!

Welcome to the forums.

As was stated the amount of interest paid each month has no effect on your score. Never pay interest if it can be avoided.

How many revolving accounts do you have? I ask because 30% of your score is based on utilization of credit. You figure your utilization by dividing the total balances on all revolving accounts by the total available credit.

Optimal credit utilization for FICO scoring purposes seems to be:

Total revolving utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

Do you have any installment loans? A credit mix (revolving, installment, and mortgage loans) can help a score but only accounts for 10% of your FICO so it's not as important as always paying on time (35%).

If you're willing to post more details it would be helpful.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

Re: what's the difference (postivie scoring wise) between those options?

moondog7324 — Wed, 04 Nov 2009 14:27:27 GMT

Manage your DEBT- Not your FICO- by all means pay the credit card in full every month to avaoid finance charges- keep the total usage below 40% and pay in full. People get caught up in little nuances that will tweak their score a few points for a short period- useless unless you are applying for a mortgage or a auto loan in the immediate future. On time payments, length, low utilization and few inquiries- the score will follow.