Building credit score with credit cards

For just about anything you want to get off your chest about credit cards.
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averagejoe23
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Building credit score with credit cards

Postby averagejoe23 » Wed Jun 29, 2011 12:46 am

Hi guys. First post on this forum and just had a few quick questions about building up my credit score. I currently have a Discover More card with a 750 limit and a Wells Fargo College Card with a 1000 limit. I really want to use my Discover card because it has a better rewards program, but, unfortunately, it's credit limit is lower. I always pay my balance off it full every month but, until I came to this forum, my spending was above 30%. Thus, I have the following questions.

1. Should I request a credit increase/will it decrease my credit score?
2. I've heard that it's ideal to keep usage below 10% but this is more or less impossible with my current state. However, I've also heard that only the balance at the end of the billing period affects the credit score. So, for example, if I spend 500 a cycle but pay off 450 before I receive the statement, the bureaus will only see that I spend 50 for the month and my score will shoot up allowing me to take advantage of the card's rewards.
3. Should I apply for a third credit card?

Thanks everyone!


averagejoe23
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Postby averagejoe23 » Wed Jun 29, 2011 3:13 am

I've been reading around a bit more and it's been recommended not to carry a balance. Does that mean that if the billing billing cycle closing on the 10th, and payment is due the following month, it's best to pay everything off on the 9th?

dfm990
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Postby dfm990 » Wed Jun 29, 2011 8:00 am

Welcome, some companies will give you a credit increase without a hard pull, so I guess it would be worth asking if u don't have too many inquiries on your credit report. As for the second question yea that's right, but its not so much when u get your paper statement, you should go online or call them to see when they post it, and try to pay it to the desired amount a couple of days before, so its already completely processed by the time they send the information to the credit buereus. And as for the 3rd question it all depends if have too many inquiries, research the card u want to get and make sure its actually feasible to get, that way you won't waste a hard pull.
Amex Gold NPSL (35000 Approved)(11/13)
Discover It $22500 (12/13)
Bank of America Cash Rewards $7000 (3/13)
Amex BCP $6000 (12/14)
Walmart Store Card $3050 (2/10)
Capital One Platinum $2000 (3/11)
Chase Slate $1000 (1/16)

Money card
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Postby Money card » Wed Jun 29, 2011 9:14 pm

I would never ask for a increase Yes I think it would hurt your score. The 2 cards you have are Fine. If I were you I would go and alternate to try and keep your Discover down to about 200 a month and wells Fargo to 400 a month. once the company sees you don't use
all of your credit then they will raise your credit up higher.

Capital
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Postby Capital » Wed Jun 29, 2011 10:09 pm

averagejoe23 wrote:I've been reading around a bit more and it's been recommended not to carry a balance. Does that mean that if the billing billing cycle closing on the 10th, and payment is due the following month, it's best to pay everything off on the 9th?


The rule that most creditors live by is if you pay your balance in full by the due date, then you pay no interest charges. This is where the 25-30 day grace period comes into play. Say your statement closes on the 1st of every month. If you have a 25 day grace period, then your payment is due on the 26th and if you pay your balance in full by the end of your grace period, then you pay no interest. There is no need to pay off your balance in full by the time your statement posts and in fact, this practice may be deleterious to your credit score. This is because your creditor will not report a balance on your account to the credit bureaus if you don't "carry" some sort of balance for the statement period. Hope this helps.

averagejoe23
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Postby averagejoe23 » Thu Jun 30, 2011 12:14 am

Many in this forum are suggesting keeping spending between 1-10%. So would the ideal situation, if I were to spend 30% of my limit, to pay it down before the statement closes so that the amount is between 1-10% when the statement closes .

Meltdownblitz
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Postby Meltdownblitz » Thu Jun 30, 2011 8:46 am

Capital wrote:The rule that most creditors live by is if you pay your balance in full by the due date, then you pay no interest charges. This is where the 25-30 day grace period comes into play. Say your statement closes on the 1st of every month. If you have a 25 day grace period, then your payment is due on the 26th and if you pay your balance in full by the end of your grace period, then you pay no interest. There is no need to pay off your balance in full by the time your statement posts and in fact, this practice may be deleterious to your credit score. This is because your creditor will not report a balance on your account to the credit bureaus if you don't "carry" some sort of balance for the statement period. Hope this helps.


That's what I thought too. Why do people say to pay the balance off in full before your statement ends.. There's a big misconfusion on this.

Capital
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Postby Capital » Fri Jul 29, 2011 1:35 pm

Meltdownblitz wrote:That's what I thought too. Why do people say to pay the balance off in full before your statement ends.. There's a big misconfusion on this.


I would add one other point to this thread: not all issuers report equally.

For example, I know that Discover reports my highest balance (as opposed to my ending balance) on my CR. So in this case, paying off your balance in full before the statement date would do you no good. Has anyone else noticed this with their issuer?

Meltdownblitz
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Postby Meltdownblitz » Fri Jul 29, 2011 4:03 pm

Capital wrote:I would add one other point to this thread: not all issuers report equally.

For example, I know that Discover reports my highest balance (as opposed to my ending balance) on my CR. So in this case, paying off your balance in full before the statement date would do you no good. Has anyone else noticed this with their issuer?


Wow really? I've never heard of that. That doesn't make sense though because if you paid it off before your statement ends, why would it matter? Hmm..



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