Ways to help your credit Score

Aleta · #1 (**permalink**) 10-12-2007, 10:35 AM

I just read something interesting on Yahoo's Finance site that is titled "GET THE MOST FROM YOUR BANK'. As you read on and click on to the credit score, it takes you to another site.

I don't know about most of you, but this was new to me. The article said that it would help your credit score if you would keep your spending at 10% of your credit limit. So, if your credit limit is $5,000., you should keep your spending at $500. or under.

There are many times that mine goes over. They say that if you consistently go over, to consider getting another credit card to spread around the expenses on the different credit cards.

Anyone familiar with this.

QuadSquadMom · #2 (**permalink**) 10-12-2007, 01:06 PM

That's called a utilization rate. I've always heard that is should be under 25% to make most lenders happy, 10% seems a bit low, but I'm fairly certain that less is best; as it demonstrates restraint.

Aleta · #3 (**permalink**) 10-12-2007, 02:43 PM

I think that it sounds low too since so many of us are putting so many everymonth expenses on our cards that you normally would have paid with a check. Alone there are some medical items like prescription glasses and medical procedures that could run that up real fast.

buzz · #4 (**permalink**) 10-12-2007, 03:32 PM

The article is exactly right. If I recall correctly, your score will be lowered approximately a point for every percentage point of credit card utilization. That being said, if you are not applying for credit, your day-to-day credit score is not that big of a deal.

If you are going to apply for a mortgage, for example, pay your balances down a couple months beforehand, and when the new balances are reported to the credit bureaus, your score will pop right back up.

ginene · #5 (**permalink**) 10-12-2007, 05:40 PM

Yes that is true. I was signed up with myFICO - FICO Credit Scores | Get a Free Credit Report Online a few years ago to improve my credit to buy my house and when I kept my balance down and just paid my credit card, my score went up 30 points as soon as I paid the balance down.

ginene · #6 (**permalink**) 10-12-2007, 05:40 PM

How do my links do that? I didn't even type in all of that.

alw_ays · #7 (**permalink**) 10-12-2007, 09:43 PM

I have found my credit score improves over time due to perpetual total credit card payoff, despite the percentage I need to put on it. Several cards run risks:
unclear totals
different interest rates
suprise finance charges
danger of late payment charges due to different due dates
(these are all I can think of right now.)

It is important to me that I am consistant with my credit card usage and payoffs. I use it every month to varying percentages of my limit, and then pay it off completely, even if it means I have to limit my pocket cash.

InDebtInDC · #8 (**permalink**) 10-13-2007, 12:13 PM

Please seriously reconsider going into debt just to increase your credit score, even if you do repay within the grace period.

At the very least, you may get flagged with "overdependency on revolving credit".