Not using credit hurting my score?

[jeremy032180]

Hi all,

I have 1 secured cc with a 301 limit, I got about 1.5 years ago.

I have 1 car loan with a 5,200 balance on it from about 1.5 years ago.

Never missed a payment on either.  I bought my transunion score from this site, and it's a 666.  My Equifax is a 655, also bought on this site as part of ScoreWatch.

Last month my cc posted a 0 balance, and my EQ score didn't budge.  When I bought my Transunion score, I got the following message:

'Your credit report shows no recent balances on your revolving account. Your FICO score was hurt because you are not currently demonstrating active revolving credit management.'

So, I have a $17 balance on my CC (301 limit) at the moment, but it's not due until July 4th.  My next statement will be out around June 15.  Should I leave that $17 on there, or pay it off and use the card again before the July statement?

Also, anyone have any advice in general?  Should I get another cc to raise my score?  I'd like to get it in the 700's so I can secure a mortgage at a good rate.  I need some new furniture but I am reluctant to apply for credit at the store because I don't want a ding on my score.

Sorry if this is all over the place, but I've been looking online for advice and my brain is fried.

Thanks in advance.

[guiness56]

It is always good to leave a 9% or under balance on one CC.  As you can see FICO likes to see you use your credit.

You can charge as much as you like just make sure when it reports to the CRAs that it is at 9% or below.  If you don't know exactly when they report you can call and ask.  Once the small balance reports you can pay it off before the due date so you will incur no interest.

You could probably use another CC.  There is something called the shopping cart trick you can search for on the forums.  This results on a SP only on your CR and will not be scored against you.  I have never tried it but others have had success with it.  You could also try your banking institution to see what they offer in the way of a CC.

Getting another installment loan won't help your score.  You already have one. 

Your credit file is very thin and that will be your biggest issue as your scores are decent.  But ontime payments for the next 6 months to a year and your score will start to go up.

As an aside, applying for credit and getting a ding on your CR is a necessary evil when trying to get credit.  It is just something that has to be done, when necessary.

[nma851]

Hey Jeremy and hope all is well considering. Welcome as well, BTW!

Without knowing if this is your entire history, ie are you new to credit or did you have issues & are now rebuilding (assuming such as the CC is secured), only having a 1.5 year old TL and the car note, also 1.5, isn't necessarily hurting you nor really "helping as much" just yet. Don't get me wrong as paying them on time each month is certainly helping, but there are only 2 active TL's at the moment reporting. Again, depending on what else is on your report (any major derog's or CO's or CA's) will be hurting rather than harming.

Another factor is the low limit on the secured. That message about "no active revolving" - in just MY words/opinion only, is more/less a "FYI" type thing depending how long and/or how often that card has sat at a PIF each month when they report. Lets say you've not used it for 4 months, then yes, it doesn't show "much" activity demonstrating how you're handling that one and only revolving CC. Again I am assuming this is the ONLY revolving TL you have along with the installment.  I've also learned that apparently having that "zero" balance (Thank you Guiness) DOES NOT make FICO too happy.  It seems counter-intuitive, but the way it was explained is FICO likes seeing you "use" it, but keeping it below that 10%.  I learn something new every time I read and/or reply to a post - and I emphasize the "Veterans" on here will jump in & not only help out the OP, but anyone responding as well.  That is the case here given I was incorrect on that zero balance part. 

As long as you're paying them as agreed, time will raise those scores. Also, if and when you are able, keep depositing more to raise that limit so you can demonstrate your ability to pay on higher CL's.

Sooner than you think, those numbers will go up and up. You sound like you're doing all the right things and I applaud that - just know in the wonderful world of credit, and I'm sure you have heard it all before, time is the #1 thing. PAA'ing every month is critical as is less than 10% util of your revolving debt(s).

Additionally, don't go applying for many all at once. Too many inquires will make lenders think you're desperate for credit and that, too, lowers the scores. It's all about a delicate balance of the key factors.

I kept raising my CL on the secured and just recently got an unsecured, after about 1.5 years with the secured's and of course after I paid my "7 year penalties" that is!!! What helped me as well is all the GOOD TL's I still have now that the derog's are gone - this helped me as I had a longer AAoA. See - we are ALL unique in this credit game - and luckily I had all that good hanging around after all the bad went flying away

Also get another secured if need be should you not qualify just yet (although I don't see why not with mid 650's - you will likely have higher interest rates for the time being but again, in time, you'll get there!)

Don't fry your brain!!! I know it can be VERY VERY STRESSFUL AND DISCOURAGING BUT YOU ARE DOING ALL YOU CAN FOR NOW - PARTICULARLY PAYING ON TIME! That alone is showing you're demonstrating responsibility.

Feel free to ask away if you want to discuss further. We are all here for the same reason - well in this category that is - and we are all here to help if we can.

All the best and again, kudos on what you're doing thus far Again, if you're open to more in-depth discussion, feel free!!!

[nma851]

---- SORRY - TYPO IN LAST SENTENCE OF FIRST PARAGRAPH HERE: Again, depending on what else is on your report (any major derog's or CO's or CA's) will be hurting rather than HELPING.

Hurting rather than harming - thats a new one for my book of "bloopers"!!! My apologies there!!

[jeremy032180]

guiness56, thank you for your time and response.  I think I will leave that $17 on my cc (approx 6%) and when the June statement posts I will see what happens to my score.  If that works then I will pay it off and do it again.  I actually used the cc on this site to get my Transunion score to see how it compared to my Equifax (Scorewatch), so maybe I'll make that a habit.  I also looked at the shopping cart trick.  That is clever.  The thing that scares me is people would more susceptible to opening up a dozen cards if they got approved at the sites.  I will look into this further later on tonight.

nma851, thank you as well for taking time out of your Saturday to give advice.   I do have a few old accounts that were in collections but they are all almost 7 years old.  Then I used no credit for about 6 years.  Had a 'thin' file so I couldn't get credit.  Yes, I couldn't get credit because I had no credit.  So I got the TL at a very high rate, then got the secured card, and a year and a half later, here I am. Your advice about raising the limit on the secured card is golden.  Had not even thought of that.  Plus your thoughts about having nice clean lines when the baddies fall off makes me think things will be OK soon.  

I appreciate the kind words and noticed you both stressed one thing, time.  So paying on time, giving it time, and using the tips you gave me, I will keep at it.  Thanks again.