@tk777777 wrote:
(Note to mods: this might belong in the Credit Cards or the FICO Scoring section of the forums, I'm not sure.)
I'm planning for my first secured CC, which will probably start out wth a $200 limit since that's all I can afford to deposit.
I don't have any other TLs, so $200 will be my starting total CL.
I will only be utilizing 9% of it -- $17 per month, one of my automatic bills. Won't be carrying a balance.
So should I be paying it off early so it only reports as $0, or let that $17 report instead? Also, should I be utilizing closer to 30% instead or is 9% more of a 'sweet spot'?
As backwards as it sounds you'll actually get dinged for zero balances on CC's because FICO likes to see revolving accounts being used. So you need to make sure that some small amount reports each month. For most cards the statement balance is what is used to calculate utilization for the month. You can use if as much as you want during the month (making sure of course not to go over limit) but just make sure you have that balance down a few days before the statement posts and then try to pay in full before the due date.
That <9% utilization is what seems to work well for most folks but even having $1 report will work also. 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%. It's not one size fits all.
From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782
"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".
