aspire Posted May 6, 2007 Report Share Posted May 6, 2007 I received Home D. preapproved offer ($500). If I sign up but will not use it will it help to build credit? Link to comment Share on other sites More sharing options...
onthedot Posted May 6, 2007 Report Share Posted May 6, 2007 Everyone recommends 30% balance, but it also helps to have used a lot of the limit and pay it off because your CR will show what your high balance was. Link to comment Share on other sites More sharing options...
Diehard Posted May 6, 2007 Report Share Posted May 6, 2007 I don't think appling for a credit card and not using it at all improves your score any. You have to utilize it in order for it to report your spending habits and repayment fullfilments. It has been stated that your utilization should be 30% or below, even 25% is better. Just because you're given a high CL doesn't mean you should run out and nearly max, or max it out. It does not show your creditors that you are using your credit responsibly. So calculate 25-30%, charge that amt. and pay it back with more than the minimum required payment. Then throw it in your sock drawer. This should help you more than not using it all.Diehard Link to comment Share on other sites More sharing options...
SecretAgentWoman Posted May 6, 2007 Report Share Posted May 6, 2007 I agree. Charge SOMETHING, pay it off, and charge something at least yearly until you have better trade lines, then sock drawer it.Don't close it unless you have a long history with better cards and they want to charge an annual fee just to keep it open. Link to comment Share on other sites More sharing options...
aspire Posted May 6, 2007 Author Report Share Posted May 6, 2007 What if I'll spend all available credit in first month, pay all back next month and then sock drawer it... will it help? Link to comment Share on other sites More sharing options...
VonAngel (aka EarthAngel) Posted May 6, 2007 Report Share Posted May 6, 2007 What if I'll spend all available credit in first month, pay all back next month and then sock drawer it... will it help?FICO considers your PAYMENT history to calculate your score. If you pay it off next month, then sock drawer it, then what's there to calculate? A $0 balance? Then there won't be any amount to determine how you use credit. Keeping your balance below 30% and above 0% is what increases your scores. Link to comment Share on other sites More sharing options...
willingtocope Posted May 6, 2007 Report Share Posted May 6, 2007 Just a further thought...it depends on what kind of FICO score you're going for...there are like 17 different scoring models that are used by differing credit grantors.If you want people who issue you CC to issue you more, I'd suggest you open CC accounts and stay right around the 30% utilization, maybe even throw in a late payment or two. Those people want FICO scores that predict they'll make money off your "charge, and make minimum payments, thereby paying us interest and penalties".If you want mortgage grantors to look favorably on you, only have 2 or 3 CC's, with as close to $0 as you can manage. Those folks look at the FICO model that says they'll get their money back...Remember...the FICO scoring models means different things to different creditors. You need to decide what you'll use credit for... Link to comment Share on other sites More sharing options...
aspire Posted May 6, 2007 Author Report Share Posted May 6, 2007 I'll do RE. And I want mortgage grantors to look favorably on me. Link to comment Share on other sites More sharing options...
onthedot Posted May 8, 2007 Report Share Posted May 8, 2007 FICO considers your PAYMENT history to calculate your score. If you pay it off next month, then sock drawer it, then what's there to calculate? A $0 balance? Then there won't be any amount to determine how you use credit. Keeping your balance below 30% and above 0% is what increases your scores.It would, however, report a high credit usage, which wouldn't be bad. Maybe charge the max, then pay it down to 30%. Link to comment Share on other sites More sharing options...
VonAngel (aka EarthAngel) Posted May 8, 2007 Report Share Posted May 8, 2007 It would, however, report a high credit usage, which wouldn't be bad.It would be if the lender also reports the CL. However, for issuers like Cap1 that don't report CLs, maxing the card out and paying it down to 30% would be a better tactic. Link to comment Share on other sites More sharing options...
geekspeed Posted May 8, 2007 Report Share Posted May 8, 2007 30% mark is key -- but gooseeggs make you more attractive to mortgage lenders. Also be wary of your debt to income ratio and your income to avail credit ratio -- keep those under check. Link to comment Share on other sites More sharing options...
leilehuamule Posted May 29, 2007 Report Share Posted May 29, 2007 I received Home D. preapproved offer ($500). If I sign up but will not use it will it help to build credit?$0 balances on cc tl's is not good. it is best to keep a util of 1-9% on most of your cc's. if you do not use the cc the cra's will ding your scores for lack of revolving cc experience. Link to comment Share on other sites More sharing options...
kailix Posted May 29, 2007 Report Share Posted May 29, 2007 can I pile on here? I keep reading on this thread "30%" but when I ran my FICO the other day, and did the "get your best score" simulation, it said "pay down your credit card debt" even though my credit card debt is only at 17%. Oddly, when I did the simulation specifically for "pay down cc" (not the "tell me what will work best") it didn't really predict an increase, which makes me think the problem may not be my credit card util at all, but rather my consolidated student loans, which show up as a "note loan" (not "student loan") and are at about $48K of a $50K debt. any thoughts on that? (if I should start my own post let me know!) Link to comment Share on other sites More sharing options...
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