topic Re: Credit Card Usage in Rebuilding Your Credit

Credit Card Usage

Sunnysd — Mon, 27 May 2019 22:41:12 GMT

Hi everyone,

I am just starting to actively rebuild my credit. I read I need three cards so that’s what I got. I have done a lot of reading but I want to make sure I do this correctly. I believe I need to use them all every month and pay two off before the statement cuts so they report zero. The other one should have a very small balance and be paid off after the statement cuts. Correct? I’d appreciate any other advice. Thanks!

Re: Credit Card Usage

Anonymous — Mon, 27 May 2019 23:15:53 GMT

@Sunnysd wrote:
Hi everyone,

I am just starting to actively rebuild my credit. I read I need three cards so that’s what I got. I have done a lot of reading but I want to make sure I do this correctly. I believe I need to use them all every month and pay two off before the statement cuts so they report zero. The other one should have a very small balance and be paid off after the statement cuts. Correct? I’d appreciate any other advice. Thanks!

Yes, what you are referring to is what we call the AZEO method. (all zero except one) It is very useful when you first start you rebuild to keep your utilitzation low while you are gaining history. Later on, it is still useful, but more for when you are going after a card/loan and want to show your best hand at the app table. For now, its just good for history earning.

It sounds like you are doing it the right way, and honestly just keep doing that for now. If i could impart any wisdom to you based on my EXP, would be to go slow and give it time.. While i have a nice line of card now, i should have waited for my profile to improve before i added everything. Credit is a marathon not a sprint, and temptation will come at you, but you have a solid start and we all look forward to hearing of your future success.

Re: Credit Card Usage

pinkandgrey — Mon, 27 May 2019 23:24:59 GMT

Supposedly having three cards and using the AZEO method is the “ideal” for boosting score. If that’s what you want to do right now to speed up your improvement, that’s great. However, at some point you’ll probably want to do just whatever works for you. I have started trying not to care so much about the “number” (score) and now just do what makes the most financial sense for me. I’d much rather save money where needed and not give myself a headache over making sure to let the right card and the right amount report. That’s just me, though. I know a lot of members on here like to maintain AZEO. Do what works for you! At the end of the day, paying your bill on time is the biggest scoring factor.

Good luck and congrats on your rebuild!!!

Re: Credit Card Usage

FireMedic1 — Mon, 27 May 2019 23:29:16 GMT

OP do you have any type of installment loan? If not. Grab a Self Lender. That will give you the FICO bonus score while staying AZEO or whatever you chose.

Re: Credit Card Usage

Sunnysd — Tue, 28 May 2019 05:27:21 GMT

I don’t. It’s probably the next thing I need to tackle. Would you do that now or wait a while? Two of my credit cards are brand new. Thanks for the advice!