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Tips and Tricks to improve credit?

Super Contributor

Re: Tips and Tricks to improve credit?


VeryCoolAlan wrote:

Here's another question: with all my debt....should I pay all of it off and have only enough for gas on my bank account every month until I pay it off?

Or

Pay a little a month (a little above minimum) so I can start saving?

 

 


IMHO it makes a lot more sense to pay off debt.


FICO8 EQ 743 TU 777 EX 752 Total revolving limits 618800 (508800 reporting)
Message 31 of 68
Valued Contributor

Re: Tips and Tricks to improve credit?

While "save a little for your emergency fund (6 X monthly budget)" is good advice, I think it is a far away dream.

 

If someone is in debt, financial crisis, (insert your own term), they need realistic and acheivable goals.

 

Begin to budget the money you do have, spending every dollar leaves no cushion.

 

Dave Ramsey encourages people to work on saving their first $1,000 as an emergency fund.

 

YNAB (You Need a Budget) has you give every dollar in your control a job. You need to decide which bills and expenses need to be paid with the money on hand. The goal of YNAB is to get 30 days ahead meaning that you are using last months income for this month's bills. (Although I do not work for YNAB, I am a fan)

 

Find a balanced approach and try to get yourself a cushion. If you have no cushion you are more likely to create new debts with credit. Start by setting small goals for yourself and one day you may be 6 months ahead! Budgeting can make a big difference.

Message 32 of 68
Valued Contributor

Re: Tips and Tricks to improve credit?

+1 on the budget!   A good question for you is - do you have extra money after you take care of all of your monthly expenses?  That would be normal bills, car payment, insurence ect...  Extra money will allow you to tackle your credit card bills and a budget will keep you on track. Figure out how much money you reasonably need for spending money each week and include that into the budget. 

 

If it was me, I'd look at what cards have the highest interest rate and which ones have the highest balances. If there was one or two cards that have low balances that I could just bang out. I'd do that. 

 

Sign into your Cap 1 account. Look to the right you'll see that it says "I want to". Then click on Balance Transfer. Do you have a "No Fee Same Rate As Purchases" option? I have a suggestion if you do. 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
Cap 1 - $12,000 / PenFed - $10,000 / JC Penney - $10,000 / Discover IT - $9700 / Barclay Rewards - $5400
Merrick - $2400 - Total - $134,500

EQ - 756 / TU - 746 / EX - 749
Message 33 of 68
Established Member

Re: Tips and Tricks to improve credit?

I have a few thousand in the bank for savings.

If I pay off every single debt right now then I would barely have any money left which is why I am wondering if I should oay everything off or wait a few months and then see if I have smaller debt. Budgeting is amazing too, I work a part time job and budgeting has left me feel like I am a millionare because unlike my friends, I don't blow my check on food and clothes every two weeks. I'm glad I have that discipline. I budget but I'm not like cheap or something like that I treat my self and family now and then when I can. 

 

and MassCredit I do have that option!

Message 34 of 68
Valued Contributor

Re: Tips and Tricks to improve credit?

I used to be creative at not paying interest when I was carrying balances on a few cards. The reason I asked if you have a no balance transfer fee option is because it can be used to move some money from one or more cards to the Cap 1 card to buy some extra time.  I didn't have big balances so it was easy to do this.

 

I had my credit card closing dates spread out. Say Cap 1's closing date is on the 3rd. I'd pay that card down to leave a balance that was equal to the amount of the monthy expenses that I'd use my credit cards for. I'll use $800.00 as a round number. After that card closed, I'd transfer $800.00 from other cards onto the Cap 1. That lowered or paid off the balances of the other cards so there was little or no interest, less cards reporting a balance and higher scores (most of the time). The next month I'd pay $800.00 on the Cap 1 then repeat after the statement closed. So the Cap 1 card was only being used for BTs and the other cards were used for normal spending instead of using cash. The cash would be used to pay the Cap1. It worked very well.  

 

You have to test how long it take for a BT payment to post.  Barclays usually posts in 2 business days. Synchrony usually takes at least 7 days. 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
Cap 1 - $12,000 / PenFed - $10,000 / JC Penney - $10,000 / Discover IT - $9700 / Barclay Rewards - $5400
Merrick - $2400 - Total - $134,500

EQ - 756 / TU - 746 / EX - 749
Message 35 of 68
Established Member

Re: Tips and Tricks to improve credit?

Wow.
I'm gonna have to try that out..
Didn't even know my Cap 1 card had interest.
Message 36 of 68
Established Member

Re: Tips and Tricks to improve credit?

By the way how the heck do you have such HIGH credit limits?
Are you like a millionaire?
Message 37 of 68
Valued Contributor

Re: Tips and Tricks to improve credit?

It doesn't take high income to get high limits. My income was $200K + about 10 years ago. I owned my own business and had good credit. But I didn't have good credit knowledge. I didn't know about utilization, to many inquiries, regular CLIs ect... I just knew that I had great income and paid my bills every month. Could get a loan anytime I wanted and no problem with credit cards. They just increased on their own. Highest limit was $81K with Chase. I used the cards for the business so they got a LOT of use!  If I knew then what I know now, my limits would have been much higher.  The bottom fell out in 2008 and made me a normal person.

 

So I started from the bottom now I'm here. I actively got into rebuilding in 2013. I have a decent number of cards that I've been been very focused on growing.  This is my total credit card limit rundown from 2013. I update it everytime I receive a new card or increase -

 

09/17/13 - $13,800.
12/15/13 - $16,200.
01/11/13 - $18,200.
03/29/14 - $18,550.
04/24/14 - $21,550.
05/02/14 - $23,550.
07/16/14 - $25,050.
10/26/14 - $25,650.
11/05/14 - $27,650.
11/28/14 - $28,350.
12/03/14 - $29,850.
02/11/15 - $31,850.
03/04/15 - $33,150.
03/16/15 - $33,950.
03/16/15 - $34,600.
04/23/15 - $37,800.
06/04/15 - $40,800.
07/27/15 - $47,300.
10/26/15 - $48,500.
10/28/15 - $52,500.
11/11/15 - $49,500.
11/16/15 - $50,500.
12/05/15 - $53,500.
12/11/15 - $54,000.  
01/28/16 - $57,000 
01/30/16 - $82,000 - Added two Cap 1 cards
01/31/16 - $92,000 - Added Lowes 
02/01/17 - $99,000 - Called Lowes back to request more
04/28/16 - $104,500.
05/15/16 - $107,500.

 

 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
Cap 1 - $12,000 / PenFed - $10,000 / JC Penney - $10,000 / Discover IT - $9700 / Barclay Rewards - $5400
Merrick - $2400 - Total - $134,500

EQ - 756 / TU - 746 / EX - 749
Message 38 of 68
Established Member

Re: Tips and Tricks to improve credit?

Wow, forgot to reply to this post.

But one other question was what is the point of having 5 figure credit cards? Is it just for like an emergency? 

Message 39 of 68
Valued Contributor

Re: Tips and Tricks to improve credit?

I think the best benefit is being able to use my cards and not worry about my scores going down because of high utilization. For example, I bought a 55" TV at Walmart and took advantage of their 12 months no interest promotion. $1060. reported on a $15K limit is only 7%.  Scores didn't move. If I would have done the same thing with a $2500 limit it would have been 42% so I might have lost a few points. 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
Cap 1 - $12,000 / PenFed - $10,000 / JC Penney - $10,000 / Discover IT - $9700 / Barclay Rewards - $5400
Merrick - $2400 - Total - $134,500

EQ - 756 / TU - 746 / EX - 749
Message 40 of 68