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Best strategy in the long run

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Anonymous
Not applicable

Best strategy in the long run

Hi everybody, I'm so happy to have found these forms because I'm really concentrating on a strong credit profile after some irresponsible behavior when I was younger (which I've bounced back from), and then leaving a controlling ex husband who didn't want me to ever take out any CCs, citing not wanting to see us in debt, but later I found out he had been taking things out in my name and defaulting... it's been an interesting journey to put it mildly. 

Well, here I am six years after finally breaking free from that relationship and almost completely recovered, credit wise, from all of that.

 

Apart from the huge amount of hard inquiries (I got trigger happy a year ago- I think I have 28- oops!) I have one "baddie" left on my CRs, a Wells Fargo CO from 2016, that I just paid in full last week & have just found out will drop off on all 3 CAs this year because of NYS laws. Between May-Oct., that'll be gone. 


So one year and a half ago I started taking my credit repair seriously, had a score in the low 500s, got an Open Sky Card, then about a year ago, continued with adding accounts, starting with the Cap 1 Platinum, which has since graduated to a Quicksilver.

 

Then was approved for a Cap 1 Walmart, a few Cap 1 co-branded store cards, a couple Comenity store cards (the easy stuff to get via SCT- VS, Williams Sonoma, Express...), an Avant card (which I'll cancel just before it would go another year as it has an AF), a Bloomies card, and a Self Lender loan which will be paid off in November of this year. 

I've gone from 200.00 available credit to 10,400.00 within one year. 

I hope I'm doing this right. At 50 years old, I'm finally taking my credit seriously. And, without anyone telling me what to or not to do, by my side. Kind of scary, but liberating. 


3 weeks ago, my overall utilization was hovering just below 30%.
2 weeks ago, I paid all down to approx. 5% overall utilization, but creditora haven't updated balances yet to CRAs, so not reflecting in my scores yet, but this will change over the next couple weeks Smiley Happy

 

So, without these updated balances, at 28-30% Util, my scores are about 643. 
I'm expecting some kind of bump up once updated scores happen. Yay.

 

I rent and have no intention of buying real estate any time over the next 5 or so years. So no way to raise my score with a mortgage, have to use what I've already established to do that. 

Sorry for all the background info but I just wanted to give everyone someone of a snapshot of my current situation before I ask my question. 


And here it goes: I've been reading a lot of conflicting information about what method of CC use best improves scores.


My goals:

1. Be able to get increases to raise my scores across the board without having to take out any more cards/apply/HPs. I don't need any more store cards. It's already going to be a challenge to figure out how to keep the ones I have open, with small purchases every 4-6 months.

2. Keep creditors happy by paying these accounts the way they like to see, and allowing my credit reports to shine as much as possible with the best strategy of using and paying credit.

 

I'm confused about how to go about this, I don't know what method creitors and CRAs like, is it carrying a small balance, say, 5%, on each card? Only on one card? Is it allowing a small balance to report, then paying it down to 0 right away, on each card, so I'm never paying interest? Or is it keeping a small balance on one or 2 cards, then paying it off as soon as the statements cut and are therefore reported, which I believe would still allow me to never pay interest..?

I'm trying to understand, I'm trying to clean up and maintain my credit, and I'm trying really hard to get above 700 within 6 months. I would love to get any advice on the best strategy. I'm already aware I messed up big time a year ago with all the inquiries, and that there's

nothing I can do to fix any of it, I'm past the point of just feeling bad about it, so I don't need to be chided, trust me I mentally flog myself for that enough already. Wondering if it's true though that inquiries have less negative impact after a year?
Thanks so so much! 
TIA! 

9 REPLIES 9
KatSoDak
Frequent Contributor

Re: Best strategy in the long run

Here is what Experian says about utilization and scores: 

 

Staying under 30% utilization will help you avoid hurting your credit scores, and keeping your ratio at 6% or under will help you achieve top scores.

 

https://www.experian.com/blogs/ask-experian/how-many-credit-cards-should-i-have/

 

FICO 8:

EQ FICO 9 - 770
EX FICO 9 - 758

Citi (2) | Discover | HSBC | BOA | NFCU (2) | WF (2) | Simmons Bank | FNBO (2) | PENFED | BBVA | US Bank | Lowes | Care Credit | Home Depot AU
Message 2 of 10
Anonymous
Not applicable

Re: Best strategy in the long run

Great to see the progress you've made - you're on the right track! Don't overthink your strategy. The best way to maximize your scores is to practice AZEO, all zero except one. Use your cards all you like. Before the statements cut, pay all of them to zero except one bank card. Use your Quicksilver for this, not a store card. Pay the QS down to $10. Let it report, and when the statement cuts, pay that $10 off. That will preserve your grace period and you'll pay no interest. Then rinse and repeat the following month. That's all there is to it besides time and allowing your HPs to age off. 

You will likely see a 10-15 point bump once your lower utilization is reflected too, so you're well on your way to your goal Smiley Happy

Message 3 of 10
Anonymous
Not applicable

Re: Best strategy in the long run

Thanks for reading my journal! LOL. And for the advice Smiley Happy

Message 4 of 10
Anonymous
Not applicable

Re: Best strategy in the long run

Thank you! Smiley Happy

Message 5 of 10
Horseshoez
Valued Contributor

Re: Best strategy in the long run

@Anonymous, first, congratulations on your credit recovery journey!

 

Regarding credit card payments and interest, one thing to keep in mind, if you had say, a $500 balance on your CapOne card with a payment due date of say, the 15th of the month, and you paid that amount on or before the due date, then any new charges posted after the 15th will A) show up on your next statement, but B) will NOT start accruing interest until after the next due date.  Said another way, if your previous balance on your due date was paid in full, then new charges, even though they show up on your statement, won't incur interest charges.

I categorically refuse to do AZEO!
Message 6 of 10
dragontears
Senior Contributor

Re: Best strategy in the long run

Some thoughts about your post in no particular order:

If you only have 1 negative account left on your reports you will easily reach the 700s once it falls off. 

You don't have to have a mortgage to have high scores

Don't beat yourself up about the inquiries, you learned your lesson about applying without a plan. The inquiries will only affect your scores for 1 year and will be gone after 2 year.

Sounds like all you need to do is use your cards responsibly and wait until your reports are clean. I know AZEO method is heavily preached on this forum but unless you are planning on applying for something it may be more trouble than it is worth. I can't tell from your post how many cards you have but it sounds like you have more than 5, with some profiles there is no score difference between reporting a balance on 1 card vs 3 cards, you can experiment while waiting for your reports to become clean. In general, just keep your reported balances reasonable in comparison to your limits. 

Finally, congratulations on building your credit on your own!

Message 7 of 10
Horseshoez
Valued Contributor

Re: Best strategy in the long run

Ahhh, the post from @dragontears reminded me of something I meant to write earlier...

 

@Anonymous, in addition to the credit cards with low utilization and full payments, if you do not have any other types of loans, you might want to consider a Share Loan or a Savings Secured Loan where you borrow against a deposit, pay down the bulk of the loan, and then keep it alive so it reports low utilization.

I categorically refuse to do AZEO!
Message 8 of 10
SouthJamaica
Mega Contributor

Re: Best strategy in the long run


@Anonymous wrote:

Hi everybody, I'm so happy to have found these forms because I'm really concentrating on a strong credit profile after some irresponsible behavior when I was younger (which I've bounced back from), and then leaving a controlling ex husband who didn't want me to ever take out any CCs, citing not wanting to see us in debt, but later I found out he had been taking things out in my name and defaulting... it's been an interesting journey to put it mildly. 

Well, here I am six years after finally breaking free from that relationship and almost completely recovered, credit wise, from all of that.

 

Apart from the huge amount of hard inquiries (I got trigger happy a year ago- I think I have 28- oops!) I have one "baddie" left on my CRs, a Wells Fargo CO from 2016, that I just paid in full last week & have just found out will drop off on all 3 CAs this year because of NYS laws. Between May-Oct., that'll be gone. 


So one year and a half ago I started taking my credit repair seriously, had a score in the low 500s, got an Open Sky Card, then about a year ago, continued with adding accounts, starting with the Cap 1 Platinum, which has since graduated to a Quicksilver.

 

Then was approved for a Cap 1 Walmart, a few Cap 1 co-branded store cards, a couple Comenity store cards (the easy stuff to get via SCT- VS, Williams Sonoma, Express...), an Avant card (which I'll cancel just before it would go another year as it has an AF), a Bloomies card, and a Self Lender loan which will be paid off in November of this year. 

I've gone from 200.00 available credit to 10,400.00 within one year. 

I hope I'm doing this right. At 50 years old, I'm finally taking my credit seriously. And, without anyone telling me what to or not to do, by my side. Kind of scary, but liberating. 


3 weeks ago, my overall utilization was hovering just below 30%.
2 weeks ago, I paid all down to approx. 5% overall utilization, but creditora haven't updated balances yet to CRAs, so not reflecting in my scores yet, but this will change over the next couple weeks Smiley Happy

 

So, without these updated balances, at 28-30% Util, my scores are about 643. 
I'm expecting some kind of bump up once updated scores happen. Yay.

 

I rent and have no intention of buying real estate any time over the next 5 or so years. So no way to raise my score with a mortgage, have to use what I've already established to do that. 

Sorry for all the background info but I just wanted to give everyone someone of a snapshot of my current situation before I ask my question. 


And here it goes: I've been reading a lot of conflicting information about what method of CC use best improves scores.


My goals:

1. Be able to get increases to raise my scores across the board without having to take out any more cards/apply/HPs. I don't need any more store cards. It's already going to be a challenge to figure out how to keep the ones I have open, with small purchases every 4-6 months.

2. Keep creditors happy by paying these accounts the way they like to see, and allowing my credit reports to shine as much as possible with the best strategy of using and paying credit.

 

I'm confused about how to go about this, I don't know what method creitors and CRAs like, is it carrying a small balance, say, 5%, on each card? Only on one card? Is it allowing a small balance to report, then paying it down to 0 right away, on each card, so I'm never paying interest? Or is it keeping a small balance on one or 2 cards, then paying it off as soon as the statements cut and are therefore reported, which I believe would still allow me to never pay interest..?

I'm trying to understand, I'm trying to clean up and maintain my credit, and I'm trying really hard to get above 700 within 6 months. I would love to get any advice on the best strategy. I'm already aware I messed up big time a year ago with all the inquiries, and that there's

nothing I can do to fix any of it, I'm past the point of just feeling bad about it, so I don't need to be chided, trust me I mentally flog myself for that enough already. Wondering if it's true though that inquiries have less negative impact after a year?
Thanks so so much! 
TIA! 


Best strategy for optimizing your scoring of revolving credit is to let one account report a small balance while the others report zero balances.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 9 of 10
Anonymous
Not applicable

Re: Best strategy in the long run

Thanks so much! I'm trying Smiley Happy 

Message 10 of 10
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