Am I using the wrong Credit Card rebuild strategy?

[Student_Loans_Kill]

I currently have 3 credit cards opened within the last 3 years. I think I must have been really low before because I was declined for a secured CC from Wellsfargo over the summer. I got the USAA secured credit card for $500 and started charging everything and paying off monthly. I never carried a balance to the next month. I then received a non secured Capital One for $300 and was doing the same with that card. I just applied for and received another Capital one Rewards card for $500. My question is what is the best way to build my credit from these cards?

It seems eventhough I pay monthly and never carry a balance, my credit FICO score is being hurt because I charge to the max almost.

[MarineVietVet]

---

@Student_Loans_Kill wrote:

I currently have 3 credit cards opened within the last 3 years. I think I must have been really low before because I was declined for a secured CC from Wellsfargo over the summer. I got the USAA secured credit card for $500 and started charging everything and paying off monthly. I never carried a balance to the next month. I then received a non secured Capital One for $300 and was doing the same with that card. I just applied for and received another Capital one Rewards card for $500. My question is what is the best way to build my credit from these cards?

It seems eventhough I pay monthly and never carry a balance, my credit FICO score is being hurt because I charge to the max almost.

---

Welcome to the forums.

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[seattletravels]

+1

You need to find out the actualy statement/reporting date and make sure that they're report little to no balance on that date.  

[Anonymous]

---

@seattletravels wrote:

+1

You need to find out the actualy statement/reporting date and make sure that they're report little to no balance on that date.  

---

If you call the CC company and ask they will give you the statement & reporting dates.  I was given them when I activated my Orchard MC.

[Student_Loans_Kill]

Thats the odd thing. I have paid my CC 2 times a month and carried no balance over to the next month. When i did my FICO, its reporting a balance.  My simulator said to pay down my $493 balance, which was done.  My statements read $0 due

[RTOrockstar]

You also need a mix of credit to really boost your numbers. Credit cards alone will be much slower than when paired with personal loans. I'm not saying go out and get a personal loan or mortgage, but those things do factor in to your FICO score.

[Student_Loans_Kill]

What about that USAA CD deposit loan for $2500? That would give me $3000 in CD and $3000 of Secured Debt with USAA? Also USAA does not run a credit report on this loan.

[webhopper]

I used a secured loan through chase when I was rebuilding. It counted as an installment loan on my credit report, which is a higher quality of debt than credit card debt. I would say for you to do this, as it will be a good way to build positive payment history on an installment.

[Cdnewmanpac]

The amounts don't really matter. Do the minimum usaa requires. Keep all cards reporting zero balance except one. Keep reported balance on one card at <10% of your total revolving credit, pay loan on time. In a year, you should see quite a difference in score. If the only reason your score is low is a lack of history, might only take 6 mos. if you have lots of negatives, might not be big until those negatives age.