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Question about CC payments when rebuilding credit


Twitchrdrm
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I was approved for a small credit line through capital one back in March. My question is do I want to pay the balance in full avoiding interest every month, or do I want to keep a little bit of a balance on there and pay it down over the course of maybe an extra month or two? I don't know what will work better for me on increasing my scores and ultimately helping me get cards w/ higher limits. I have seen conflicting info on the net saying I should do BOTH of those methods but I figured I would probably get a better answer here. The cool thing about the cap one card is that while it's only a 300 limit, they will increase it to 500 if payments are made on time for the first 5 billing cycles. Ultimately I want to get cards w/ much higher limits than 500. I'd appreciate any feedback!

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It'll take some time and patience. I would pay the amount in full each month and your credit score will gradually increase.

You could do this method to show activity: Use the card for a small purchase - gasoline, out to eat, etc which is about 10% of the credit limit ($30 bucks in your case), let it report to the credit report agencies, and then PIF.

..and it already seems Capital One will already increase your credit limit after 5 on-time payments.

Best of luck!

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Awesome! Thanks for the reply. That is what I basically do. If I make larger purchases I always pay it down before the statement is due on the card. I just got approved for another small limit CC. I'm hoping that by using them for small stuff like gas or lunch and paying them off in full that in a yr from now I can see some really good results. Does it matter that I pay my cards off in full before the statement date or do I want to let it linger and pay it off when it's actually due as opposed to earlier than that?

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I wait for my statement to come out for the month and then I make sure to PIF before the due date...of course :).

I only use 2 credit cards currently but by the end of the year, I will only use one.

I'll charge all my expenses for the month (usually auto-debits) on the CC and PIF at the end of the month.

That's my method and keeps me out of debt!

Stay within your means.

PIF at the end of the month.

Use cash when you can.

Good luck on your repair journey!

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Thanks for your feed back Esquire. I really do appreciate it. I keep getting offers in the mail now that I've cleaned a lot of junk off of my reports. Do you suggest just sticking w/ what I have now (cap1 card, target store card that I never use, and another dept store card that I never use) I will be getting a best buy Master Card (another low limit one 300)? I don't know if I should have 2-3 cards that I would use if that would help me improve faster. I know I can be responsible with these actual non dept store CC's, I just really want things to look better and I don't know if I should start opening CC's if I'm getting the pre-approval offers so I can show more available credit open even though I hardly use them. What's your take on that?

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I don't know if I should start opening CC's if I'm getting the pre-approval offers so I can show more available credit open even though I hardly use them.

No. More credit cards (with associated available credit) will hurt your credit score, not help it.

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I would stick with 2; department store (Target/Best Buy) and a Mastercard or Visa - if possible, try not to get any with annual fees.

On time payments and history with patience - you should start to see an increase in your credit score with positive tradelines. Remember: each time you apply for credit, the inquiry will have an effect on your credit score. (Hard) Inquiries remain on your credit report for up to 2 years; don't get credit-applying hungry. :)

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