FICO Masters...Choose Your Strategy

[Anonymous]

I've never heard of this spending 90% of your limit in a day thing.  Even in an entire month rarely would someone achieve this unless they have a card with a very low limit.

Imagine someone spending 90% of their limit per day on a $30k card?  That would be about a $10M spend per year!

[newhis]

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@Anonymous wrote:

I've never heard of this spending 90% of your limit in a day thing.  Even in an entire month rarely would someone achieve this unless they have a card with a very low limit.

Imagine someone spending 90% of their limit per day on a $30k card?  That would be about a $10M spend per year!

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What I have read from some people with some lenders, using up to 90% the low limit card in the month and paying it down to $0 or $10 by statement date, they think this help for CLIs, not daily. Some people even go to 90% 2 or 3 times in the same month.

I think it all depends on a) your limit, b) your income and c) other cards you use. If you have good income and low limit and building credit, it makes sense that you can almost top your card 1 or more times a month. But if you only make 10K a month and you put 2-3K on your $500 the first month, it doesn't add up. It even put a red flag on your account (my guess).

[Anonymous]

Right.  Per "month" I completely get... I just think the per "day" reference is a bit bogus.

[newhis]

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@Anonymous wrote:

Right.  Per "month" I completely get... I just think the per "day" reference is a bit bogus.

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OP put the every day reference on a couple of posts, even listed as Strategy #4. I don't think is possible to put 90% the limit on a card each day. Charges start as pending, most cards you can't pay more than the actual balance, then you will need to 'push' a payment from your bank, even then, they will not 'release' your purchase limit until several days.

I think even trying to do this 2 times a week may be a red flag.

Thinking about this, if you have money and you want a card with good limit right from the start, get BofA secured or Discover secured and put the max amount they allow. When I got my BofA secured they told me I can secure up to 10K. I think Discover is 2.5K. I'm sure that if you get the 10K card after a year you could get a few cards with 10K limits as well. In 6-7 months your card will unsecure and get the money back.

[Anonymous]

Again thanks for the insightful comments.

OK, now Ive coalesced the following strategy:

Have a total of three cards.

Use them as normal or no more than twice a month use 90% and paydown.  

Before due date, pay 2 down to 0 and keep 8% on one.  

Repeat.

ScoreExplorer

[newhis]

Sorry, I think I didn't fully answer the original question.

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@Anonymous wrote:

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?

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The 'use your card normally, pay all but one to $0 before statement date and low balance in 1', is just a way to get the max points for your profile at that point.

From what I understand score has no memory, I can have 2 cards at 90% for 5 months, then pay 1 to $0 and the other $10, let them report and the score will be the same at that point that if I do the $0/$10 every month.

So I think the answer is, 'there is no way to increase Fico score faster in 6 months' by only changing the use/report on 2 cards.

If you want a higher score faster you need to look at other variables, like pay down some types of loan to less than 9% (extra points for low balance), get a secured loan if you don't have an open loan (extra points for credit mix), be AU on parents old cards with low balance/perfect payment (not Amex, extra points for better AAoA and even AoOA).

The 'strategy' to go to 90% several times a month, may be helpful for some lenders to increase your limit but your score will be the same if you have 2 cards with $500 limit each, one $0 balance and the other $10, as if the limits are $5,000 each.

[Anonymous]

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@newhis wrote:

Sorry, I think I didn't fully answer the original question.

---

@Anonymous wrote:

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?

---

The 'use your card normally, pay all but one to $0 before statement date and low balance in 1', is just a way to get the max points for your profile at that point.

From what I understand score has no memory, I can have 2 cards at 90% for 5 months, then pay 1 to $0 and the other $10, let them report and the score will be the same at that point that if I do the $0/$10 every month.

So I think the answer is, 'there is no way to increase Fico score faster in 6 months' by only changing the use/report on 2 cards.

If you want a higher score faster you need to look at other variables, like pay down some types of loan to less than 9% (extra points for low balance), get a secured loan if you don't have an open loan (extra points for credit mix), be AU on parents old cards with low balance/perfect payment (not Amex, extra points for better AAoA and even AoOA).

The 'strategy' to go to 90% several times a month, may be helpful for some lenders to increase your limit but your score will be the same if you have 2 cards with $500 limit each, one $0 balance and the other $10, as if the limits are $5,000 each.

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+1

[Anonymous]

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@Anonymous wrote:

Again thanks for the insightful comments.

OK, now Ive coalesced the following strategy:

Have a total of three cards.

Use them as normal or no more than twice a month use 90% and paydown.  

Before due date, pay 2 down to 0 and keep 8% on one.  

Repeat.

ScoreExplorer

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The twice a month and 90% part is not necessary.  Just use them as normal, whether that be a small spend or a large spend, and PIF (allowing $0 to report) on 2 out of 3 cards.

The third and final card does not HAVE to report an 8% balance to yield maximum FICO points for utilization; anything in the 1%-8% range is just fine, so don't feel you need to report a balance that's as high as 8% of the CL when any balance will suffice and round up to 1% assuming it's $5 or greater, generally speaking.