Need Help from Experienced Members UPDATE on Pg2

[Anonymous]

Hey,

I am in the rebuilding stage still credit wise and I guess I have misunderstood what I've read on here.  I know there are many different opinions, so I guess maybe I got confused.

I was recently declined for a Barclaycard and Discover and on Recon both told me the Charge offs from 5.5 years ago from AMEX, Citi and Chase wasn't the main concern since I had paid all them back in full.  The concern both said was that I am not using my credit that is currently extended to me much.   I currently use my cards a lot each month, but I pay them in full before the statement cuts to always show low utilization because I thought that is what I was supposed to do.  My credit score has gone up a lot since I've kept it that way, but the lenders seem to be concerned since they can't see me using it by my reports.

So should I start using 70 percent or so of my credit cards each month for a few months and let the statement cut, then pay in full for two or three months to show I can handle the credit?  After that keep then back down at 0 for a couple months to let my score rebound and then reapply so I am then not declined for high utilization?

I currently have 2 personal cards and 2 business cards with Capital One, a Nordstrom card, CreditOne and Wells Fargo.  I also just completed my final student loan payment and never late.

I guess I messed up by always paying my balances before the statement generated.

(Wasn't sure if this was supposed to be under Credit Cards or Credit Card Applications)

Thank you for your help!

[Anonymous]

Let 30% utilization show 70% will be too much too fast.

Its good for debt purposes that you pay in full each month but they want to see how responsible you are with credit thats prob why they told you no, they cant see how you handle it because you pif it looks like you dont even use or need it.  Just take one card and let 30% keep reporting.

[taxi818]

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@Anonymous wrote:

Hey,

I am in the rebuilding stage still credit wise and I guess I have misunderstood what I've read on here.  I know there are many different opinions, so I guess maybe I got confused.

I was recently declined for a Barclaycard and Discover and on Recon both told me the Charge offs from 5.5 years ago from AMEX, Citi and Chase wasn't the main concern since I had paid all them back in full.  The concern both said was that I am not using my credit that is currently extended to me much.   I currently use my cards a lot each month, but I pay them in full before the statement cuts to always show low utilization because I thought that is what I was supposed to do.  My credit score has gone up a lot since I've kept it that way, but the lenders seem to be concerned since they can't see me using it by my reports.

So should I start using 70 percent or so of my credit cards each month for a few months and let the statement cut, then pay in full for two or three months to show I can handle the credit?  After that keep then back down at 0 for a couple months to let my score rebound and then reapply so I am then not declined for high utilization?

I currently have 2 personal cards and 2 business cards with Capital One, a Nordstrom card, CreditOne and Wells Fargo.

I guess I messed up by always paying my balances before the statement generated.

(Wasn't sure if this was supposed to be under Credit Cards or Credit Card Applications)

Thank you for your help!

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ok. this is a very easy issue as long as you listen. no do not start using 70 percent. what you are doing is fine. 100 percent. except. leaving a small balance on 1 card.

pay all in full like you are doing. except example on 1 capital one card leave maybe 10 dollars. depending on statement date 3 days after they will report to the credit bureaus that 10 dollars you left. then pay that in full 2. i will show what you need on your report that you are using your cards and in fact your score will go up very good. as your utilization is very low. because you pay in full. if you do that you will be golden. good luck.

[NRB525]

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@Anonymous wrote:

Let 30% utilization show 70% will be too much too fast.

Its good for debt purposes that you pay in full each month but they want to see how responsible you are with credit thats prob why they told you no, they cant see how you handle it because you pif it looks like you dont even use or need it.  Just take one card and let 30% keep reporting.

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+1

This is one area I don't understand the strategy of many others. If you want to build a relationship with an existing bank for your credit card, you need to let the statement publish with some amount on the statement, not pay in full prior to the statement.

The banks are justified: "Why should I offer you a $10,000 line of credit, when all I see you using is $100 in any one month? Where's the upside for my bank in swipe fees and potential interest on the no Annual Fee card I'm being asked to issue to you?" You have to look at it from the bank perspective.

now, don't get me wrong, my utilization is way too high, but at the same time, my card issuers love me because I carry balances and there is potential for interest income, or BT Fee income, or swipe fees to the bank. So my limits reflect it, along with my payment history.

When building credit, I believe you need to use credit, otherwise, why bother looking to get credit?

Cheers!

[Anonymous]

Thanks all three of you for helping me out!

[CreditMagic7]

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@NRB525 wrote:

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@Anonymous wrote:

Let 30% utilization show 70% will be too much too fast.

Its good for debt purposes that you pay in full each month but they want to see how responsible you are with credit thats prob why they told you no, they cant see how you handle it because you pif it looks like you dont even use or need it.  Just take one card and let 30% keep reporting.

---

+1

This is one area I don't understand the strategy of many others. If you want to build a relationship with an existing bank for your credit card, you need to let the statement publish with some amount on the statement, not pay in full prior to the statement.

The banks are justified: "Why should I offer you a $10,000 line of credit, when all I see you using is $100 in any one month? Where's the upside for my bank in swipe fees and potential interest on the no Annual Fee card I'm being asked to issue to you?" You have to look at it from the bank perspective.

now, don't get me wrong, my utilization is way too high, but at the same time, my card issuers love me because I carry balances and there is potential for interest income, or BT Fee income, or swipe fees to the bank. So my limits reflect it, along with my payment history.

When building credit, I believe you need to use credit, otherwise, why bother looking to get credit?

Cheers!

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+1

This is been the pattern that has worked best for me and greatly accelerated CLI's with my current lenders plus new (useful) cards . Everyone's profile is different and every lender logs some form of expectations that either loosen their strings or tighten them depending on the lender. I sometimes despite advice to the contrary on a portion of my cards roll that balance like dice but try not to exceed 90 days tops except if it's on a 0% BT.

[newhis]

I think people should go for the PIF before statement in all cards but 1 and <10% in that one for score purpose only, when you want to apply for something the next month.

This is not normal behaviour or how the credit cards work for the client. You use the card, wait for the cut, then pay it. That's the normal.

So use your cards, let <30% report for a few months (your score will drop some), then before app, do the 1 at <10% the rest at 0%, your score will recover and the new lenders will see that you use the cards and pay them on time, wanting you as a client.

[Anonymous]

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@newhis wrote:

I think people should go for the PIF before statement in all cards but 1 and <10% in that one for score purpose only, when you want to apply for something the next month.

This is not normal behaviour or how the credit cards work for the client. You use the card, wait for the cut, then pay it. That's the normal.

So use your cards, let <30% report for a few months (your score will drop some), then before app, do the 1 at <10% the rest at 0%, your score will recover and the new lenders will see that you use the cards and pay them on time, wanting you as a client.

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I suppose. I just let what I spend report.

[Anonymous]

Contrary to conventional wisdom, I let the statement cut, then auto-PIF. Every card shows activity on the statements, and it seems to be working

[newhis]

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@Anonymous wrote:

Contrary to conventional wisdom, I let the statement cut, then auto-PIF. Every card shows activity on the statements, and it seems to be working

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That should be the normal, only when you want to apply for something you can do the 1 card <10% others at 0%, to get a higher score. I think many people love to have the highest score possible every single month.