How to advantage most from your Credit card

[TheFate]

I think I speak for the new guys and the ones Rebuilding credit when I say I still feel lost on how to get the most out of credit cards. Or how to use them properly. I use to think anything you charge on the card would be reported, now i'm learning CC only report after the Statement date.. then one person says do this, the other says this works best.

Can we dedicate a thread on "How to advantage most from your Credit card"?

[takeshi74]

That's really the point of this subforum and it's not something that a single thread can address.  Start off by understanding the factors that impact FICO scoring:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

The other problem with relying on a single reference is that best can vary from person to person depending on specific goalsm, preferences and priorities.  If you have specific questions we can address them.

[TheFate]

My first question would is it best to let a 1-9% Utilization report and the other cards PIF before the statement date so they all report $0 balance except for one?

If you had a trans on the account but brought it down to zero before they report do you still get a history built or is it like it was never there?

[TheFate]

@ Takeshi yes but it would be nice to goto a sticky thread that address alot of duplicate threads and be able to learn from you all the basics of credit card usage all in one thread

I'm talking about the usage of credit cards, not understanding how fico grades your overall report.

[takeshi74]

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@TheFate wrote:

now i'm learning CC only report after the Statement date.

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Depends on the card.  Most report on statement date.  Not all do.

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@TheFate wrote:

My first question would is it best to let a 1-9% Utilization report and the other cards PIF before the statement date so they all report $0 balance except for one?

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Generally speaking the lower the utilization the better as long as it's above 0.  The exact ideal point will vary but it is typically around 10% or less.  How much effort one is willing to put forth to hit the desired utilization will vary.  I don't care for the hassle myself but I'm lucky enough to have limits and spend such that my utilization falls under 10%.

FICO scoring models favor fewer balances which is why the "one balance" recommendation exists.  Again, the effort versus benefit analysis will vary from person to person.  Most of my cards report balances and I'm fine with my scores.

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@TheFate wrote:

@ Takeshi yes but it would be nice to goto a sticky thread that address alot of duplicate threads and be able to learn from you all the basics of credit card usage all in one thread

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So you've already looked through the Helpful Threads sticky?  At least one of your questions is answered in there.

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@TheFate wrote:

I'm talking about the usage of credit cards, not understanding how fico grades your overall report.

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It all goes hand-in-hand.

[nachoslibres]

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@TheFate wrote:

My first question would is it best to let a 1-9% Utilization report and the other cards PIF before the statement date so they all report $0 balance except for one?

If you had a trans on the account but brought it down to zero before they report do you still get a history built or is it like it was never there?

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If you are going for the absolute best score then yes, let one card report and the others show PIF.  But honestly, most of us in this forum way over think credit scoring - as 99% of the people out in the real world have no clue about maximizing score - and yet they get by just as fine as we do.

You still get history built with the one transaction - that's one more month of having a TL open without the worry of it being closed due to inactivity.  Plus, that lender sees the activity - it just means other lenders likely won't - which is probably a good thing.

[TheFate]

I've read by a few members here that they have been denied credit due to too many credit cards carrying a balance even tho it was only $10. Thats absurd and un heard of. Makes you wonder how much is considered too many?

I'd really like to benefit from the only 3 CC's I have before I app spree at the end of the year and I need to understand whats best for CLI and such. Some say use your card for everything then just PIF before the statement date? But I would think in the lenders eyes that would be as if you depend on the card entirely way too much even if you do pay the balance in full

But I agree @Nacho, we all tend to overthink this thing way too much. Partially due to the fact that credit is almost everything in life right next to income and family

@Takeshi great points and yes I've read about 70% of the sticky threads and I still am reading more. I havent found a sticky regarding this yet

[takeshi74]

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@TheFate wrote:

I'd really like to benefit from the only 3 CC's I have before I app spree at the end of the year and I need to understand whats best for CLI and such.

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Creditors vary.  There are only so many generalizations that can be made.  CLI's depend on your credit, income and the creditor's critiera.  The usual factors involved with credit scoring are definitely relevant.

[Anonymous]

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@takeshi74 wrote:

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@TheFate wrote:

I'd really like to benefit from the only 3 CC's I have before I app spree at the end of the year and I need to understand whats best for CLI and such.

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Creditors vary.  There are only so many generalizations that can be made.  CLI's depend on your credit, income and the creditor's critiera.  The usual factors involved with credit scoring are definitely relevant.

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+1.   And the other (sad) thing to realize is that many/most of the factual sounding statements here (Bank X prefers you to do Y) are almost certainly not generally true, either being based on one person's experience (everything that happens to me is universal) or generalized from postings here, which is a small biased sample with very incomplete information  (the reason that person A didn't get the expected CLI MIGHT be partially due to the 5 30-day lates they forgot to mention.  Or not.)

So it is probably best to fall back on the published FICO factors, such as paying on time, not having too many inquiries for credit etc.  The published factors do not include details such as the 1-10% utilization on exactly one card.  This is generally accepted here and in other forums from a few experiments and so may not be true for all, but probably does no great harm score wise even if untrue!   Also, nearly all issuers will have factors other than those in the FICO score, and these will vary between issuers, between whatever groupings the issuer uses etc and we just cannot know very well what will help an individual.

Where this matters most is when following some potentially useless advice costs money, from time to time we see "Bank X likes people who carry a balance" (not just report, carry a balance from statement to statement outside of a 0% APR period).  Following this will cost you money, and may well not get you what you want anyway.  (And, IMO, even if true, a CLI is never worth paying for)

[Fico2Go]

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@Anonymous wrote:

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@takeshi74 wrote:

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@TheFate wrote:

I'd really like to benefit from the only 3 CC's I have before I app spree at the end of the year and I need to understand whats best for CLI and such.

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Creditors vary.  There are only so many generalizations that can be made.  CLI's depend on your credit, income and the creditor's critiera.  The usual factors involved with credit scoring are definitely relevant.

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  (And, IMO, even if true, a CLI is never worth paying for)

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I completely agree. 

IMO if carrying a balance gets you a CLI, not carrying a balance might result in a CLD. 

Doesn't make sense for people that want to profit.