New CC; what's the best utlization strategy for maximizing points?

[Anonymous]

Hi all,

I've taken out a new visa SOLEY for the purspose of increasing my FICO score now that I've had all the negative information (that's been weighing it down) removed.

I know I should keep the utlization sub 10%, having heard the lower the better, but I'm wondering if I should max it out the first month?  Don't know enough about FICO scoring to fully understand so any help is appreciated:

My quesiton is would I get more points if it were maxed out in month one and kept at sub 10% for all other months as opposed to keeping it low right from the start?

Any help would be useful

Thanks! :-)

[fused]

Welcome to the forums, Jped!

Since your question is about FICO scoring, I'm moving your post to the Understanding FICO Scoring forum.

[marty56]

Maxing out any credit card is a score killer.  Infact it might lower your score to have any balance report.  The only time having a balance report could help your score is if you have no accounts reporting a balance.  In that case $1 will be as good as a full 9% of your CL.

[MarineVietVet]

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@Anonymous wrote:

Hi all,

I've taken out a new visa SOLEY for the purspose of increasing my FICO score now that I've had all the negative information (that's been weighing it down) removed.

I know I should keep the utlization sub 10%, having heard the lower the better, but I'm wondering if I should max it out the first month?  Don't know enough about FICO scoring to fully understand so any help is appreciated:

My quesiton is would I get more points if it were maxed out in month one and kept at sub 10% for all other months as opposed to keeping it low right from the start?

Any help would be useful

Thanks! :-)

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This is not at all necessary. FICO only scores the utilization of whatever your credit limit is each month.

You might have to play around with the utilization for a few months to see what works best for you. One month have a zero balance show on your statement. The next month have just a few dollars show. Many people report though that the same utilization will result in different scores they get from TU and EQ.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[vanillabean]

Browsing the archive, I stumbled over a most amusing thread entitled "Getting scores up to and past 800", which may remembered in part for someone's "darling wife", but along the lines of utilization strategy, someone else noted the following.

"You need to use at least 4 cards every 6 months to keep them active on your credit reports. I like 3 months."

I take "active" to mean that at least $1 must be reported to the credit bureaus as an official balance.

If the credit limit is reported, I don't know if it matters all that much if the balance is $1 or it's 9% of the credit limit.

If the credit limit is not reported, but the high balance is, then it makes sense in one month to build up a solid balance.

If neither is reported, another card is recommended, I would think.

[Macroman]

I don't think  that it is necessary to let the balances report. Managing activity is keeping the card issuer from thinking that you've forgotten about their card. At times issuers will go around closing cards that have not been used recently. If it's Chase they may close the account without telling you beforehand.

[vanillabean]

Macroman wrote:

"I don't think  that it is necessary to let the balances report. Managing activity is keeping the card issuer from thinking that you've forgotten about their card."

That's probably correct. Still, "Don’t always keep your (reported) balance at zero, though: in order to have a credit history, you need to demonstrate that you are actually using credit.

If Credit Scoring Is a Sport, the Goal Is 850

http://www.nytimes.com/2007/10/14/business/14count.html

[Macroman]

The usual advice is that  it is sufficient to let 1 card report a small balance for credit score maximization. It's perfectly OK if most lines never report a balance on your report.