FICO Masters...Choose Your Strategy

[Anonymous]

Starting with just two brand new cards, one Visa and one MC, both with zero balances,

given all other factors remain exactly the same, which Strategy listed below,
repeated for 6 months, would safely increase a Fico score Faster and why?

For the Strategies, assume the specific following example dates for both cards:

Statement date Jan 20th - Feb 19th.
Due date Mar 15th.
Reports to CRA on Mar 19th.

Strategy #1) Charge 8% of both of the card's limits at the beginning of the cycle (Jan 20th) and then pay one down to 0 balance
before due date (Mar 14th) and make a minimum payment on the other, and then pay that one to zero the day after new cycle begins (Mar 20th),
and then repeat, meanwhile switching which card gets the 8% holdover balance everytime.

Strategy #2) After new cycle begins (Jan 20th), Charge 90% of both cards limits and pay off both to 0 right before
due (Mar 14th), and then repeat.

Strategy #3) After the new cycle begins (Jan 20th), Charge 90% of both cards and pay one off to 0 right before
due (Mar 15th), and pay the other down to 8%, and then after new cycle starts (Mar 20th) pay that card to 0, and then repeat.

Strategy #4) Everyday starting after the new cycle begins (Jan 20th), charge both cards up to 90% and make daily payments to
bring the balance down to 8% everyday and then right before due date (Mar 14th), pay one down to zero and then pay the other down to 8%,

and then after that new cycle starts (Mar 20th) pay that card to 0, and then repeat, meanwhile switching which card gets the 8% holdover balance everytime.

Or maybe a combination or a new Strategy I haven't listed, ie your custom Strategy #5.

The Entire Goal is to illuminate a repeatable Strategy and System.

Please share your experience and expertise on the best repeatable Strategy.

ScoreExplorer

[newhis]

How about Strategy #5:

- use the cards any way you want/need

- before Feb 19th make sure one is $0 and the other less than 8%

- pay the card with balance in full before due date (March 15)

- no need to change the reporting card every month, it could be the same

The general rule is 1 card with 8.99% balance or less, the others with $0 balance. Some people even say that a lower balance (for their profile) get a few extra points.

[Anonymous]

OP, I feel that your different "strategies" outlined above involve far too much micromanagement.  As newhis said, just use your cards however you naturally would and if you want to worry about their reported balances for maximum FICO scoring under the utilization sector, deal with only allowing one to report a balance when the time comes.

Also you stated that you have exactly 2 cards, so as of now you have 3 options as far as cards reporting balances... 0% of them reporting, 50% of them reporting or 100% of them reporting.  Most believe that for maximum scoring you want to have less than 50% of your cards reporting, but not 0%, which is something you can't do without adding at least a 3rd card.  By doing this and letting one report, you'd be at 33% of your cards reporting which in theory would yield you the greatest amount of points for the utilization piece of the FICO pie.

[Anonymous]

Great wisdom they have to give you, young Skywalker!

[Anonymous]

Thank you all for responding, I enjoy programming computers, and Fico being algorithm based,

my goal is to learn how to feed the input it (Fico) wants to get the desired outcome (higher score).  

I will get another card so I will be at 33% when I keep two at 0 balance.  

Not relating to the CRA or score but is it true/generally accepted, that if you use 90% of your card on a near daily basis and pay it off immediately

and then repeat continuously through the cycle, that again, generally speaking, that particular bank will be more

inclined to increase your limit on that card vs just spreading the charges throughout the cycle and then pay down to 0 before due date?

Again, thank you for your insight.

ScoreExplorer

[Anonymous]

---

@Anonymous wrote:

Thank you all for responding, I enjoy programming computers, and Fico being algorithm based,

my goal is to learn how to feed the input it (Fico) wants to get the desired outcome (higher score).  

I will get another card so I will be at 33% when I keep two at 0 balance.  

Not relating to the CRA or score but is it true/generally accepted, that if you use 90% of your card on a near daily basis and pay it off immediately

and then repeat continuously through the cycle, that again, generally speaking, that particular bank will be more

inclined to increase your limit on that card vs just spreading the charges throughout the cycle and then pay down to 0 before due date?

Again, thank you for your insight.

ScoreExplorer

---

I dunno.... but WOW does that ever sound expensive.  If you had only a $500 limit, and you used only 80%, and you did that only every other day, that would still be six thousand dollars of spending every month!

That's a very costly way to get a credit limit increase.  Especially since getting a credit limit increase does not in itself help your credit scores at all.

A real risk of credit cards is that they induce people to increase their spending, which is always a bad idea.  The rewards and other inducements are always much tinier than the loss of the money you would have otherwise been able to save.

[NRB525]

Best Repeatable strategy:

Never ever miss making every minimum payment on time.

Everything else is noise in FICO scoring.

[Anonymous]

Again, thank you for the reply.  I agree that spending out of control is bad, but let me explain about my

thinking about that particular strategy of high 90% daily charges to get higher limits.  

It isn't that much real money because I have a few hobbies, ie coin collecting and collectible cards,

that I can buy with credit and sell quickly for just a small percent of loss around 5%, or even a small 5% gain

depending on the deal, and then pay that immediately back to the card, so the real cash involved stays about the same.  

The reason I want higher limits is I have a friend who is retiring and will sell me his business for $60,000.

It makes around $5000 a month profit.  So my goal is to get my credit limits up to as high as possible and then

use my savings plus the credit to finance the purchase, so a portion of the profit from that business will the pay

off a portion of the cards' balance every month.  It's a service business with no real hard assets, ie vehicles/land so banks won't loan on it.  

It's his niche, track record and loyal customers that are valuable.

Again, only if higher credit limits would be achieved, in your experience, would I be doing this 90% daily charge strategy.  

Thats why I was asking if anyone had direct experience with getting limits increased.

ScoreExplorer

[Anonymous]

I believe that NRB (who has chimed in) has used something a bit like the strategy you mention with some success.  You may wish to PM him if he doesn't say anything further.

I think someone documented an internal memo at Wells Fargo or some similar bank that they are most likely to award CLIs to someone who's card has (at the moment of statement printing) a low individual utilization (< 29%) but not too low (> 21%).  Thus the sweet spot (for that institution might be a card with an individual util of 22-24%.  And of course you'd want your total util to be even lower if it can be, just to improve your score.

[newhis]

Well, every lender is different.

Discover, for example, can give you 6K CLIs even if you use the card for only $200 a month. You need time to get to this point. My Discover started growing like that after 2 years. I was able to increase the limit more than 20K in less than 8 months (after the 2 year mark).

Amex can grow fast. I started with 2K card and 8 months later it was at 15K. DW SL was 3.5K, after 3 months the limit was 10K.

I don't know who issued your cards, maybe they will not auto-CLI your cards, HP for a low CLI or could give you a good CLI with SP/HP.

If you are looking for a card that can grow fast I recommend Amex. A friend got his Amex less than 3 months ago with 1K limit (mid 600s), used the card a lot (had to pay it down a couple of times during the month) and he got a CLI to 3K. Now he needs to wait 6 months to ask again for 9K or get auto-CLI before that, then ask for 3X.

You said the cards are new, so I guess your profile is thin. Once your profile gets thicker you can try to get cards that you know start with good limits, like Venture card or Chase CSP (5k) or Chase CSR (10k). Don't try Chase unless you have 1 year with good credit history and/or some good relation with them. Good luck.