Is recovery feasible?

[Anonymous]

Hey guys, first time user as well as my first post on the forums.  I figure what better way to stay on top of my credit problems than to connect with a community that has much more knowledge in the field than I ( As you can tell from my scores).

My story is this.  I received my very first credit card through a mail offer from Discover when I started college, 18 years old at the time.  500 dollar limit, almost nowhere that accepted Discover anywhere near campus but plenty of ATMs and a young age make for a horrible combination.  I ended up having Discover close the card with a $480 balance which went unpaid and rose to $700.  I finally have things in order in my life as well as a stable job in the EMS field so I began trying to fix my mistakes so when Discover sent me a settlement through a debt collection agency I accepted (not the full $700). A few months after that I was approved for a Chase Freedom card with a $1,200 limit ( I own a Chase debit card).  While this remains on my credit history which is says will remain until 2018 for the Discover issue,  am I fighting a losing battle trying to rebuild my credit by 10-30% utilization, full payments 15 days before payment date on my Chase Freedom?  

Thank you, any help would be greatly appreciated.

[Anonymous]

Keeping UTI reporting low is NEVER a losing battle, IMO.

But you need to understand the difference between 'usage' and 'reported balance'.

The balance will get reported usually within a day or two of the statement close date. It will report whatever the balance was ON THAT DATE. Any higher balances that were paid down prior to the statement date are completely irrelevant as far as scoring models is concerned. You FICO score is only concerned with the balance that is CARRIED OVER to the next billing cycle.

Ok, so armed with that knowledge, to get the maximum value from your card, use it anywhere and everywhere you can, but go online and pay it down as often as possible. Use it for whatever you would normally pay cash for, or use a debit card for - groceries, gas, utilities bills, whatever. Make sure that the balance a few days before the billing cycle ends is below 10% of the cards limit, and then to keep from paying interest on that amount - go online and pay it off completely a couple of days after the statement date. The more you charge it up and pay it down, the happier Chase will be with you. This kind of usage gets them lots of vendor fees, with virtually no risk. That kind of usage tends to encourage Credit Limit Increases.