Does paying minimum affect credit?

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Davyvfr
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Does paying minimum affect credit?

Postby Davyvfr » Fri Aug 30, 2013 6:27 pm

Hello,

I have some general questions regarding credit cards. I am a college undergrad and get by perfectly with two debit cards with rewards programs. However, I have a few questions regarding credit cards:

1) If someone pays the minimum, and their single card is nearly maxed, will it lower ones score? This would yield a high utilization though. Lets say this card is a store credit card. What is a good utilization percent?


Sevenfeet
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Postby Sevenfeet » Sun Sep 01, 2013 12:05 pm

It does count as you paid your bill for the month, so there's that. But it may count against you for a credit card company's internal metrics in asking for CLIs later (which happened to me).
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Chase Freedom Visa ($25K)
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randeman
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Postby randeman » Sun Sep 01, 2013 2:27 pm

Davyvfr:

To answer the rest of your question, the general rule of thumb is for your utilization to be less than 10% of your total credit limits in order to maximize your FICO score. Assuming that is your goal. It's my understanding that, if you are applying for new credit, your maximum utilization should be no more than 30% of your available credit. YMMV (your mileage may vary) meaning that some creditors my overlook as much as, say, 50% utilization, but most creditors won't approve you for new credit if, say, you are within 85% of your credit limit(s). It's best overall to use your credit, but pay it off before your due date, and don't use anymore until your statement date, which is usually about five days after your due date.
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takeshi
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Postby takeshi » Wed Sep 04, 2013 5:47 pm

Davyvfr wrote:If someone pays the minimum, and their single card is nearly maxed, will it lower ones score? This would yield a high utilization though. Lets say this card is a store credit card. What is a good utilization percent?

It's the high utilization that affects the score.

Davyvfr wrote:What is a good utilization percent?

As low as possible but not 0.



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