@Anonymous wrote:
Hi I just received new credit and a first time credit card and would like to know the formula for credit utilization and stratergy for paying off my credit card on time each month so that I can increase my credit score.
CAPITAL ONE 1500
HSN 500
I am by no means as experienced as others on this forum, but I will give it a shot.
First, is to possibly get 1 more card, even if it is secured. I have read that having at the very least 3 cards is optimal. Second is to keep utilization less than 10%. For optimal scoring have all cards at $0 and one reporting at 1-9%. This is for best scoring results and optimal scores for possible new applications. But as others have said, it is something that should, most likely, be practiced as a "norm".
If you are not planning to app anymore, at least for a while. Then the best thing would be to use the cards you have, with the possiblity of that 3rd card, pay in full each statement, or what you can (some can do the PIF, some cannot). But, of course, pay the minimum at the very least. Grow the cards for about 6 months, preferably 12 and scores should improve/grow.
As far as the strategy for paying on time each month, it's really to each his/her own. If you charge small amounts, you can pay in full. If you cannot do that, then of course pay as much as you can or are willing to, based of at least the minimum due. If you want your current cards to grow, it's a YMMV thing as different creditors like to see different things. Some like to see balances left, some like to see heavy usage etc etc. Mainly it is a do whatever is most comfortable for your income and spending habits. Do not over extend yourself, manage the cards well and they will grow (although some say Cap One might not LOL), and so will your scores.
