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Hi there,
I was doing some research on rebuilding my credit. I currently have a score of 677 and have one unsecured credit card for 2000. The main point of what I'm finding out is that it DOESNT matter how much my limit is but rather that I maintain 10-30% of it and make my payments consistently and in a timely manner ( please correct me if I'm wrong). If this is true, would it be a good/bad idea to cancel my current card and open up 2 secured cards for $100 each? This way my percent to total is less when it comes to the interest I would have to pay on 10-30% of my max credit. I understand that opening 2 at once would lessen my credit age, but would any variantion of this approach be a 'smart' idea?
Thanks!
My 2 cents of opinion is this ...
Too much attention is paid to scores and not enough on the robustness/strength of one's overall credit profile. I recommend that you focus on the latter.
To build and maintain a robust credit profile, one needs several tradelines [3 to 5 is my recommendation] that consist of a some revolving and some installment tradeline types. Once that is accomplished, then timing of payments and level of utilization are the two most ongoing components of maintaining a robust credit profie.
@kanakanaka77 wrote:Hi there,
I was doing some research on rebuilding my credit. I currently have a score of 677 and have one unsecured credit card for 2000. The main point of what I'm finding out is that it DOESNT matter how much my limit is but rather that I maintain 10-30% of it and make my payments consistently and in a timely manner ( please correct me if I'm wrong). If this is true, would it be a good/bad idea to cancel my current card and open up 2 secured cards for $100 each? This way my percent to total is less when it comes to the interest I would have to pay on 10-30% of my max credit. I understand that opening 2 at once would lessen my credit age, but would any variantion of this approach be a 'smart' idea?
Thanks!
I wouldnt close the unsecured card no matter what. Try to get the utilization down to under 10%. If you open a secured card try to open them with as much cash as possible. I opened one with a few thousand via my credit union and it helped my credit score tremendously. That strategy works if you can put the money aside and leave it there for a while. I put the money there and never used more than 10% of it. My level of expertise is nowhere near a lot of the contributors here. Its my opinion...I hope it helps.
@ezdriver wrote:My 2 cents of opinion is this ...
Too much attention is paid to scores and not enough on the robustness/strength of one's overall credit profile. I recommend that you focus on the latter.
To build and maintain a robust credit profile, one needs several tradelines [3 to 5 is my recommendation] that consist of a some revolving and some installment tradeline types. Once that is accomplished, then timing of payments and level of utilization are the two most ongoing components of maintaining a robust credit profie.
Your two cents are worth their weight in gold. I loved this response.
Thanks for the responses. Just applied for a department store card.. nailed it.. Since I don't want to apply for too many cards at once is there a general rule to follow for amount of time to allow between applications?
Thanks!
Best advice? After you have a few good TLs, only apply for credit if you need it. Don't go and get a bunch of low limit cards. Try to get a couple that will grow with you.
I agree with you, I'm just trying to find the quickest way over the next year to raise my score. I want to buy a house in the next year and would like an option for a 'won't have to pay 1-2 times the value of the house' interest rate. I don't need credit cards. I pay everything on my current card off every month, which I discovered might be a reason my score had been stuck for so long. That's why I was asking about lowering my limit. The lower my limit, the easier and cheaper it is to maintain the 10-30% every repair site says to keep your credit cards at.
Thanks,
Jess