High Utl as a Temporary Strategy?

[jazhead077]

I'm in the early stages of actively rebuilding my credit. As of last month, I had 2 active cc accounts and 1 student loan, Secured FNBO - $1500 Paypal connect - $500. I've seen my largest score increases (20 points last month) by caring a high balance on a statement and paying it off on the next billing cycle. My question is, should I continue this practice to increase my scores? I'm reading that it's ideal to keep utl 1-9% on one card and 0 balance on remaing accounts. This month I was approved for 2 cc Discover - $1000 and C1 - QS $3000. I currently have 2% balance on my PP and 0 on FNBO and I am considering charging on my FNBO before my statements closes on the 25th and paying the balance off next month.

My short term goal is to purchase a car this Spring (May or June) and would love to get my EQ around 680+. I am also working on my baddies (2 - CO DV, GW letter pending, 1- 120 day late - GW pending, 3 - Collections (DV pending).

Thanks in advance!

EQ 630 TU 624 EX 638

[Anonymous]

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@jazhead077 wrote:

I'm in the early stages of actively rebuilding my credit. As of last month, I had 2 active cc accounts and 1 student loan, Secured FNBO - $1500 Paypal connect - $500. I've seen my largest score increases (20 points last month) by caring a high balance on a statement and paying it off on the next billing cycle. My question is, should I continue this practice to increase my scores? I'm reading that it's ideal to keep utl 1-9% on one card and 0 balance on remaing accounts. This month I was approved for 2 cc Discover - $1000 and C1 - QS $3000. I currently have 2% balance on my PP and 0 on FNBO and I am considering charging on my FNBO before my statements closes on the 25th and paying the balance off next month.

My short term goal is to purchase a car this Spring (May or June) and would love to get my EQ around 680+. I am also working on my baddies (2 - CO DV, GW letter pending, 1- 120 day late - GW pending, 3 - Collections (DV pending).

Thanks in advance!

EQ 630 TU 624 EX 638

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It will make no difference in the long term. UTI is a current 'snapshop', and is not related to what it was in previous months. It has no 'memory'.

[RobertEG]

Carrying high % util, either for a period of time, or erractically up and down, may cause creditor concern and trigger a review of your existing credit limits.

If uneasy, they may cut your credit limits as a means to minimize potential loss that could result from very high utils should bad times hit.

As stated, you can recover from high % utils as far as scoring goes, but it might trigger reveiw for potential credit limit decreases, which could then make it difficult to reduce your % util as you pay down your debt.  It is not, in my opinion, a good strategy to continually have high utils.

[jazhead077]

Sound advice. Thanks!

[Anonymous]

As you stated you're in your early rebuilding stages imo just keep your uti low <30% and down to <5% in may for a good boost. Dont add any more inquiries.

[Anonymous]

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@jazhead077 wrote:

I'm in the early stages of actively rebuilding my credit. As of last month, I had 2 active cc accounts and 1 student loan, Secured FNBO - $1500 Paypal connect - $500. I've seen my largest score increases (20 points last month) by caring a high balance on a statement and paying it off on the next billing cycle.

My question is, should I continue this practice to increase my scores?

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The funny thing is the answer is YES but NO...

As you've found out YES you can experience a nice bump with this 'method' but it isn't something to play with nor plan as a m.o.

As@Norman mentioned

"It will make no difference in the long term. UTI is a current 'snapshop', and is not related to what it was in previous months. It has no 'memory'."

(Sorry don't know how to do the 2nd quote thing)

If you 'add' debt in Jan. 'yes' the computer formula will give you 'juice' in Feb. but it's not like it carries over to April or May....

Meaning ok you jump up 20 point 'that ONE time at band camp' but for it to work 'again' you have to LOSE points for stacking debt UP in order to get the

bump for the high util being paid off ...get it 'roller coaster'.....so while it worked 'that one time'

So 'yeah' went from 65% to 29% nice bump....ok 29% to 9% let's give you that.....ok NOW what?

The only way to get the 'nice' jump is to LOSE points by jumping back up to a high 65% util rate which means you're just playing

roller coasters with losing and gaining the same exact points....not a 'strategy' a 'tool' as youre organically building otherwise...it's a yo-yo waste of time,

you're running in place.

@Anonymous yes it works because you're lowering your debt/raio but it ain't a 'plan' because once you've got your ratios in a decent position the impact won't be 'good' again unless you go 'bad' again, so take you points as they come and move it along....this is the kind of 'magic' done just before closing on a house to get the 'number'...pay off a bill to grab the temporary bump but it's a diminishing effect because as @Norman correctly states the 'snapshot' changes monthly....

I call it 'picture-day'....because you 'are' what you are on picture day until the new picture comes out, so getting your hair n make up is meaningless the day AFTER pic day cause the camera is gone...but if your teeth are brushed and the lighting is just right when they snap the pic you're GREAT....till next month but it's a month by month photo  

[jazhead077]

@ Gemini, thank you for the hillarious and insightful response! I was hesitant to ask the question as a noobie, but I've learned a lot from the replies!

This is a great forum! It really feels good when you are effecting change in something that has been weighing on your shoulders for years! 

[Anonymous]

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@Anonymous wrote:

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@jazhead077 wrote:

I'm in the early stages of actively rebuilding my credit. As of last month, I had 2 active cc accounts and 1 student loan, Secured FNBO - $1500 Paypal connect - $500. I've seen my largest score increases (20 points last month) by caring a high balance on a statement and paying it off on the next billing cycle.

My question is, should I continue this practice to increase my scores?

---

The funny thing is the answer is YES but NO...

As you've found out YES you can experience a nice bump with this 'method' but it isn't something to play with nor plan as a m.o.

As@Norman mentioned

"It will make no difference in the long term. UTI is a current 'snapshop', and is not related to what it was in previous months. It has no 'memory'."

(Sorry don't know how to do the 2nd quote thing)

If you 'add' debt in Jan. 'yes' the computer formula will give you 'juice' in Feb. but it's not like it carries over to April or May....

Meaning ok you jump up 20 point 'that ONE time at band camp' but for it to work 'again' you have to LOSE points for stacking debt UP in order to get the

bump for the high util being paid off ...get it 'roller coaster'.....so while it worked 'that one time'

So 'yeah' went from 65% to 29% nice bump....ok 29% to 9% let's give you that.....ok NOW what?

The only way to get the 'nice' jump is to LOSE points by jumping back up to a high 65% util rate which means you're just playing

roller coasters with losing and gaining the same exact points....not a 'strategy' a 'tool' as youre organically building otherwise...it's a yo-yo waste of time,

you're running in place.

@Anonymous yes it works because you're lowering your debt/raio but it ain't a 'plan' because once you've got your ratios in a decent position the impact won't be 'good' again unless you go 'bad' again, so take you points as they come and move it along....this is the kind of 'magic' done just before closing on a house to get the 'number'...pay off a bill to grab the temporary bump but it's a diminishing effect because as @Norman correctly states the 'snapshot' changes to enough....

I call it 'picture-day'....because you 'are' what you are on picture day until the new picture comes out, so getting your hair n make up is meaningless the day AFTER pic day cause the camera is gone...but if your teeth are brush and the lighting is just right when they snap the pic you're GREAT....till next month but it's a month by month photo  

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Excellent explanation, Gemini!

[Anonymous]

@Jaz

Thanks for 'getting' some of my humor (my kids don't think I'm that funny)

I think it's important for us to share info and insight...

And from many different POV's and methods because I've learned different things make it 

check for different folks at different times....plus as my kids pay less attention than I think they should.

Who knows one day, the way one of you younger ppl say something on some 'cool' ap or something another

their on will get it to 'click' for them....we all need to send out the karma, we never know when the six degrees

of separation positively effects some future grandkid or great grand kid.

Keep the questions coming, sometimes questions REMIND all of us what to do and what to STOP doing, again

Funny how life works...in school we share it's called cheating in real life it's called taking care of the village....