Credit Card Utilization and Your Credit Score

Credit Card Utilization and Your Credit Score

Credit card utilization refers to how much of your available credit you use on a monthly basis and is a metric often used in credit scoring algorithms. It is defined as your total open credit card balances divided by your total open credit card limits. The resulting percentage is a component used by most of the credit scoring models because it is often correlated with lending risk. Generally speaking, the higher your credit card utilization, the lower your credit score.

Why does it impact my credit score?

The utilization rate is an important indicator of lending risk. A person who constantly charges all of the money they can, hitting or going over their credit limit, is far more likely to have difficulty repaying that money than a person who uses their credit cards sparingly.

How does it impact my credit score?

As there are dozens of different credit scoring models, it's difficult to calculate exactly how credit utilization will impact your credit score. However, there is a strong correlation between a consumer's credit card utilization rate and their credit score. With the exception of consumers who keep their credit card utilization at 0 percent, those who keep their utilization percentage low on average have higher scores than those who constantly max out their credit cards.

High credit utilization on a single credit card could negatively affect a consumer with little credit history and only one card far more than it could someone with multiple cards and a long and excellent credit history.

Although it is an important factor in calculating your credit score, it is important to remember not to just focus on this one aspect of your credit score. Keep the big picture in mind.

How can I lower my credit utilization?

Here are three tips that may help you lower your credit utilization. One tip is to make credit card payments more than once a month so that your balance never gets too high. If you have more than one credit card, another good way you might lower your utilization is to use multiple cards each month. This results in various cards with low credit utilization rather than one with high utilization. Lastly, you could try to increase your available credit. If your income has increased, if you've maintained an amazing credit history or if you have little debt, it doesn't hurt to ask for a credit limit increase. Just remember that this can sometimes result in a hard inquiry on your credit. If you lack excellent credit, you may want to consider opening a secured credit card and adding to its security deposit over time.

Other Tips

  • You do not have to carry a credit card balance or pay interest every month to show credit card utilization. Even if you pay your credit card balances in full every month, simply using your card is enough to show activity.
  • Experts recommend keeping your credit card utilization below 30 percent on each card and collectively. This shows lenders that you know how to spend responsibly and can help your credit score. However, creditors also care about the total dollar amount of your available credit, so if you have a low credit limit, it usually is not a big deal if your credit card utilization rate is slightly higher than recommended.
  • Although high credit utilization can be detrimental to credit scores, keeping credit utilization at 0 percent is not recommended either. Creditors want to see people who use their credit, but are able to manage it responsibly.

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I use to be a mortgage loan officer. The way I understand it, you should only use 30% of whatever your limit is on any card you hold. If you have a limit of $1,000.00 for example, you want to keep your balance at or below $300.00. Totally ignore the real limit and treat the card as if your limit is just $300.

To avoid paying high interest, pay off all but $5.00 of your balance (or as much as you can afford) each billing cycle. Leaving a $5.00 balance will automatically register with all three credit bureaus that your manageing the card at less than 30% usage. Bottom line, never allow your limit to go over $300.00 /or 30% of your actual limit.  If you do this with each of your cards, you should have an "A" for credit card usage within a years time. 

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Reply by
EddyTX

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A good trick, once you are able to get on to multipul cards. 

I put a recurring charge such as netflicks or my pbs monthly donation on a card. Then put that card away. Only using occasionally through out the year. Then set up a recurring payment to the account for a little less than the balance due. 

When you use the card for something else. You can pay that off.   The card will show activity and keep the balance low using money you are already spending. 

Reply by
Tuffkat4050

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Leaving even a minimal amount of your balance unpaid results in paying interest on the entire balance for the most of the billing month and often the following month too, because your balance due is never zero-balanced. On balances that are not paid in full, interest accrues from the date of the charge until the charge is paid in full and all already billed (showing on a statement) charges are paid in full. Pay ALL of the billed balance due by the due date if possible. You will still show credit activity that builds your credit score but will pay ZERO interest. It's a bank's dream for you to pay all but $5!

Don't charge it if you can't pay in full by the billing due date!

Reply by
jbk109

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thank you, very helpful and well follow what you said  :)

Reply by
diboch

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"Leaving a $5.00 balance" will leads you pay interest. Bad recommendation. Or you don't know that neither. I learnt it many years ago to try $1 less payment that statement balance.

Reply by
Sun32flower

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Thank you. I unstood what you said better. :-)

Reply by
shamanmama333

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Thank you this was clear, excellent advice:)

Reply by
Ipromiseyou

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I wish someone would explain to them that the credit cards are not mine. They were my mothers. She passed away at Thanksgiving of 2013. I am trying to get all of the little bills caught up now. I have 1 income. My disability check. That has to pay my monthly bills and only 1 collection company has been good enough to understand this. They took all of the bills I owed under one (bill) added them together and asked me what I could afford a month I will be finished with that one in October. My mom had a habit of not opening envelopes. I think a lot of the small doctor bills of mine jus accumalated and now they are large and in collection. They have her address on my credit report. The one when she was married to her second husband. In the mean time they are trying to get me to take the best offer on the credit cards. And to go to a free consultation with a law firm of how to handle this situation. I know how to handle this situation. Not to take on a credit card that I will pay a fee for not using and a fee for using. And a law firm that after that consultation isn't going to help unless I pay witht the money I don't have.

If they would just listen I could clear this up. If a lot of the collection agencies were as nice to work with me as the ones I am working with now, the collection agency could get the money they paid for the account. I guess they didn't know that some of us stupid folks didn't know that they bought the account. The money goes to them not the one that provided the service.

Thank you for giving me the advice, and the chance to tell what I have been wanting to yell about to someone that will listen.

I Promise You!

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How come you have to leave $5.00 on the account?

Reply by
TaiCurry95

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Thank you for the information

Reply by
starsigndavid

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I cannot figure out why my report says I am using over 60% of my credit cards.  My usage is under 5%, with two cards having a zero balance.

Reply by
hareese86

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I use this trick myself and also never pay interest. It's just important to be clear about what we mean by "all but 5$ of your balance". The balance on your bill and the balance by the time you pay it are often different. Then by the time the card company reports to the credit bureaus, your payment is subtracted so it's going to be a different amount again. So there are 3 relevant balances.

Say your billing cycle closes on the 1st. If you owed $300 on the 1st, then $300 is what will appear on your bill and how much you have to pay by your due date in order to avoid interest. Say your due date is the 21st. If you charged anything between the 1st and the 21st, your "outstanding balance" will be higher than $300 by the due date. Let's say it's $450. 

If you pay $445 and do not use the card again until the company reports to the credit bureuas, then the balance reported on your credit report will be the optimal $5 and you also pay no interest. If you pay only $300, your reported balance will be $150, which is of course not as good as $5. If you pay $295 trying to micromanage your credit score, you just incurred interest.

So pay at least your full "statement balance" (the one on your bill) and leave some tiny amount of your "outstanding balance" (the up-to-the-minute one on the website) for next month.

If you're an autopay aficionado, just autopay your outstanding balance in full and then use the same card to autopay something small like Netflix on a date right after your credit card's due date. Done.

Reply by
katpao

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I know, I have a card with a 300 limit and if I go shopping, it actually lowers my score... on some reports more than others. Real accurate depiction here. Why the hell should I have to play a numbers game with a 300 credit card that affects my score, the same as if I have one with a 20,000 limit? That is absolutly absurd and has nothing to do with credit worthingess. This country is a joke. The people who benefit off of this sloppy, inaccurate scoring system are the ones who created it. It is like playing monopoly with assh0les who are blatently cheating....  and then everyone not only continues to allow the assh0les to play, they make them the bankers. Yes, we are that stupid and the assh0les are laughing all the way to their offshore bank accounts with the money we work for, so they don't have to. You know, other countries don't allow the assh0les to play like this.

Reply by
Mom4rachel

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Thank-you so much for the valueable info.  I'm giving myself that 1 year to get my score up by 100 pts.  Fingers crossed :)

Reply by
Srond

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I have two credit cards that I secured with my own funds by borrowing against my own money. I have one student in college, so he uses the money on his card up to about 60-80% each month., So I just transfer money from my account to his about 5 to 6 times a month. I really dont pay a bill because I am constantly putting money on his account which I am on the card, so it shows up on my credit. I am not using someone elses money.  I have a $3000 credit card that I did the same thin with, I borrowed against my 3000.00 and I use my card the same way.  I do not have credit cards open that are unsecured..  Both careds are 5% interest, but since I'm constantly putting so much money on each month, I really dont pay much interest, because I am earning interest on my money.  I refuse to use debit cards because of hacking issues and my credit cards have special benefits if this should happen.  Does it matter to the bureaus if my cards are my own money? And if so, how can I get this information updated across the board??  Help!

Reply by
Srond

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I have two credit cards that I secured with my own funds by borrowing against my own money. I have one student in college, so he uses the money on his card up to about 60-80% each month., So I just transfer money from my account to his about 5 to 6 times a month. I really dont pay a bill because I am constantly putting money on his account which I am on the card, so it shows up on my credit. I am not using someone elses money.  I have a $3000 credit card that I did the same thin with, I borrowed against my 3000.00 and I use my card the same way.  I do not have credit cards open that are unsecured..  Both careds are 5% interest, but since I'm constantly putting so much money on each month, I really dont pay much interest, because I am earning interest on my money.  I refuse to use debit cards because of hacking issues and my credit cards have special benefits if this should happen.  Does it matter to the bureaus if my cards are my own money? And if so, how can I get this information updated across the board??  Help!

Reply by
XrayRep

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My score recently dropped from 696 to 693, which doesn't make sense because I have only one creidt card that I paid off about a year ago, and although I keep the card account active, I no longer use it. It has a $10,000.00 limit with a zero balance. Am I being penalized for having a credit card account and not using it? My score should go UP, not down as far as I am concerned!

Confused.

Reply by
jtselfmade

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Thanks for the explanation. I'm trying to built my credit but I was always spending over 30% of my credit  limit  on a monthly basis. Now I understand how to manage that.

Reply by
Dondec

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Thinking about refinancing my current mortgage from a 22 year remaining term to a 10 year mortgage, would raise my mortgage payment by about $200/mo. No credit cards or credit card debt, just have operated on a cash basis for my purchase, 1 auto loan original term 4 years, paid my balance down from 16,000 loan to 3500 in a year a 1/2...have applied for credit cards simply for mileage benefits not that I need a credit line, as I have managed to maintain without credit cards and declined...I know credit limits with credit cards can affect an approval for a mortgage whether used or not..was a mortgage underwriter years ago, have since changed careers..wondering whether I should refrain from applying for a credit card while going through the re-finance process?  Credit score 730, no late payments on current open accounts, no collections, not quite understanding why not approved for a credit card except no credit card history..most important to me at this point is not a credit card, but reducing the term of my mortgage loan from 22 years remaing to a 10 year loan..only carrying my auto loan to report payments on time for 2 years rather than paying the loan off..previous auto loans paid in full and on time any suggestions from mortgage underwriters out there?

Reply by
deepow

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I did this, and they kept increasing my limit. Eventually I had a 5000. tab on a 20,000 card and was laid off from my teaching job. BE CAREFUL.

Reply by
todd1762

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thanks! Didn't know that

Reply by
StellaMoon

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but i dont understand i worked hard after divorce and large amt of marial debt to pay back

took  over 2-3 yrs but i just check my score and i used to be 825 or so now 697 i dont understand  i have 12 credit cards some are older than others but my utilization is 89%

i feel ratherstupid that i dont understand should I lower the  limit amts on all cards.

Reply by
Doug1as

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Thank you for a really tangible formula / way to view using the cards and looking at the limits. I was only using one card and paying it off each month but then I just noticed it actually hurt my score this month because I paid off a hospital bill with the card just so I had a simple record I could view in the future if needed. Now I know I need to spread the cards around if I use them at all. Live and learn.

Thanks again,

Doug R., Memphis, TN

Reply by
wsmelser

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Is it true that if my "total debt" drops below 50% (currently 70%), then my credit score improves dramatically?  That's what I've always been told but now that I'm on CreditKarma, I keep reading about 30% or less.  I just came into some money with a death in the family and I'll be paying down two of my cards (apparently to $5.00 instead of ZERO).  But this still will only get me to about 45% total debt usage.  Will this help my credit score dramatically?  I'm tired of hovering at 720 on my total Credit Score...  Thank you BILL

Reply by
woahdood

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How is leaving a small balance on each card better than simply paying off the balance on each card at the end of each billing cycle? (In other words, (i) is that better for your credit? and (ii) if so, why is that better for your credit score than simply paying off the entire balance at the end of each month?

Reply by
FatalMusa

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I historically used to pay all of my credit cards completely off when I used them. I have 5 credit cards, some months I would only use 1 card and keep tha balance on the other 4 at zero. In many cases I was below a 1% utiliziation (many months I didnt use a card at all). This caused my utilization score to go from an A rating to a C rating. Does this mean if some of us do not use more than 1% of our total credit limits combined that we should be carrying balances over?

Reply by
EKage21

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Thank you for your advice, Jambababe. I just have one question, when does the $5.00 get paid back, if ever? Will i need to pay it back in lump sum ( $5*12 mos= $60) at the end of the year??

That is a good trick, EddyTx. I'll probably use my card for a reoccuring expense, too.

Reply by
JoinMrTerry

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So I have less than 1% usage for the past 90 days and I still have a "C" rating. I have a limit of $37,000.00 and I'm using $120.00 for January so far....this is nuts....

Reply by
mykarmaacc

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From the tips above:

  • You do NOT have to carry a credit card balance or pay interest every month to show credit card utilization. Even if you pay your credit card balances in full every month, simply using your card is enough to show activity.
  • Experts recommend keeping your credit card utilization below 30 percent on each card and collectively. This shows lenders and credit scorers that you know how to spend responsibly and will help your credit score. However, creditors also care about the total dollar amount of your available credit, so if you have a low credit limit, don't worry if your credit card utilization rate is slightly higher than recommended.
  • Although high credit utilization can be detrimental to credit scores, keeping credit utilization at 0 percent is not recommended either. Creditors want to see people who use their credit, but are able to manage it responsibly.

Reply by
aroberts1872

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You need to show a small balance on your card right before your credit card company reports your balance to the bureaus. Find out when your credit card company reports, for instance if they report on the 20th of every month, pay your balance after that day, that was you won't show a zero balance.

scenario #2, charge a small amount like $10 a few days before they report & it won't show a zero utilization. 

Reply by
LenBoogie

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Say you use the full amount of credit provided and your score begins to drop. After paying all payments on time, will your score rise higher than what it initially started out as, or will it even go back to where it was.? Or will it just be lower until you recover it over time.?

Reply by
diboch

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the $5 unpaid balance would result you pay interest on the whole month balance, not no $5 only. Pay all off! 

Reply by
Robdigo

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hi i pay my card in full every month but score still not going up

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How is my credit affected if I was to borrow $750 of that $1000 credit limit if it was paid back in full within three weeks?

Reply by
dragonseye61

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GEES I NEVER THOUGHT OF THAT BUT IT WILL REQUIER CONSTENT ROLING OF MONEYS TO KEEP 5.00 IN ACOUNT HUMMM I NEED TO THINK ABOUT THIS SOMEMORE THANKS    

STEVE

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I'm not sure where you folks get your information that says you have to leave a balance on any credit card. A year and a half ago I had never owned a credit card my entire life, however I had a lot of collections for medical since I didn't have insurance. There was close to 25k worth of this. I paid quite a few of them in full and settled about 5 that still show on my credit report as settled in full. No company would give me a credit card. I started with a 572 credit score and by the time all of my debts were paid or settled, I had a 620 credit score. I had to get a capitalone prepaid card. After a few months I applied for Bank of America and they denied me even though I bank with them. So what I had to do with Bank of America is give 500 cash as a deposit. So my limit was 500, then six months later I called them and asked for a real credit card. They finally approved me and gave a 1k limit. After 9 months of using that and the Capitalone.. I was approved for Chase Sapphire. My score had raised to a 705 with a 5k limit.

My wife had zero credit and I had her get a credit card. She started off with a Kohls card to establish some credit. About six months later she had a 720 credit score strictly because of that card, and later she got a Bank of America, then after a few more months her score raised to 750. She then applied for Chase Sapphire and got a 11k limit.

The point of this story is.. my wife and I pay our credit cards the same day we use them. We never wait until the due date and we never carry a balance. My wife has a 780 credit score and I now have a 705. My advice is do not fall into the carrying a balance trap. It's not needed.

Reply by
oakbyriver

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I think you are a smart cookie! Yours is a real success story. To go from 572 to 705 is amazing! Now your wife has a score of 780 (soon to be 800, I am sure!) You are a smart, disciplined couple and I truly admire you. Please pray that my husband and I will be as successful and smart with our credit as you and your wife! Thanks for the info.! All the best to you both.

Reply by
RettMommy

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How did you get most of them settled your medical debts that is what I have and its $6000 and I have heard about sending letters asking for original bill and if they cant produce that you can make them take off how did you do it? I am really in need of some real experience first hand

Reply by
ESYoung

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RettMommy's:  Back in 1991 my medical bills were around 1.5 million so 6k seems like an amount you could pay off.  I could not pay off mine so I declared bk and now 20+ years later my credit score is much improved.  Hope this helps.

Reply by
wardboi33

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I have a 637 score and my limit is only $300 as of now, i have a balance due of $25, im trying to understand the credit card utilization,   what do i do?

Reply by
Michagm56

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I like that this is real good advice; thank you

Reply by
dopi889l

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How long did you and your wife use the capital one prepaid credit card until you finally got approved for the Bank of America card? I just got a prepaid capital one card and wan to see how long should I wait to apply.

Reply by
jtselfmade

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Thanks for sharing I will definitely try this little trick.

Reply by
Carloson

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Good for you.I'll follow your example.  

Reply by
grwilliams1971

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Thanks for the Tip!....

Reply by
grwilliams1971

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I'm going to try that my friend.....

Reply by
whittanddj

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How many months did you wait after her score went up to 700s ive never had credit got a capitalone card since july made every payment on time  my score is now 711 should i apply for a higher card or wait a few more months?

Reply by
missflo

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Thank You this is more helpful and actually makes sense! This is also on my mind, I only use my credit card if I have money to spare, meaning Im using my credit card but Ive also put away money to pay for the purchase then I won't have to wait for the due date and would have paid off in full before the given due date. 

Reply by
Shakedrap

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I really need help with my medical bills that what is taking up most of my credit score! What step do I need to take?

Reply by
luannescoringbig

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wow i am so trying to build my credit so bad im still very low on my score i have about 6 accounts credit that is and let me tell you it is hard juggling this stuff.. thanks for sharing i can not wait to pay these off and them see a 700 score im at 583 still and it is killing what should i do? 

Reply by
gettingright2015

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great info.  I was told to pay most of the bill off before the billing cycle ends and then pay the small amount of whats left on the bill due date

Reply by
50Bux

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I paid off 4 of my credit cards 4 months ago.  My credit score dropped 20 points because I didn't use them.  They getcha coming and going!

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Reply by
JRIVER20

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Very good guys! I do nearly the same here. I started improving my credit 2014 with a capital one. Before I became disabled I had a great credit score after my bankruptcy back in 2005. Lost my job because of my surgery my credit as messed up again. Finally I fought for inaccurate information and finally was able to get a capital one secure card. I wasn't happy cause I know they are pigs ! They are one of the reasons why I file bancruptcy. 

Finally  my score is nearly 700 and soon it will improve as my bancruptcy should come out this year.

I myself do not carry my balance each month but do paid by due date or before if I can. Although I have to admit, credit cards company love to closed account that they do not profit from. That's why, I Cary over a couple bucks and pay a very small interest fee on them.

Reply by
Cutegalfrommb

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As of Jan 2014, medical bills can no longer be on your credit report. I also had several due to a high risk pregnancy. I contacted Lexington law firm & they got every single one off my credit report. & my score went up 25+ points

Reply by
Jazz510

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This was very thankful thank you 

Reply by
slfate

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I don't even have a credit card and my score is under 700 - I pay my mortgage faithfully each month, my car payment on time each month, and I just last month took out a dental loan (ripoff loan) that I have already made two payments on for twice the monthly amount. The only bad spot is overdraft protection that I pay monthly but still has a balance. What are they basing this score on?

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It required  YEARS for me to get all my credit cards paid down to zero.  I cringe when I think about all the money the credit card companys extracted from my wallet in interest fees.  I now am debt free and I have five no-fee credit cards and I pay off all balances in less than 30 days - and I must laugh when I see a 'C' grade for my 'credit card utilization' grade on my credit report.  I pay off my balances on time and get a 'C' ... and if I DON'T pay off the balances quickly I get an 'A'...pah-leeze ... I'll stick with my 'C' grade and NO debt...I sleep better with the 'C' ... 

Reply by
expatbrit

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I know what you are going through with that. I naver carry a balance on my vredit cards but also get a C rating as my utilization is always zero and to the credit reporters computers 0=100 lol. That's why you and I will never get an A as we don't like to let them rip us off with interest charges ;)

Reply by
kimba999

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Me too! I have a 'C' grade even though I pay off my cards every month. I use them constantly but I always pay them off so I supposedly have 0% utilization. I too would rather have the 'C' grade then pay for interest. 

Reply by
Shane94116

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Yeah, my best buy cc isn't showing up, but I've got in the habit of paying of my freedom card  every month so that C grade was a shocker... 

Reply by
Shadow2084

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I felt the same way you did when I read my credit card utilization grade: "C"!  I too have NO debt - my bad, I guess.

Reply by
Hanq

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Carrying an overdue balance and carrying a balance for the current month (or statement period) are two different animals. The credit card companies want to see that you can handle having a little debt (30 days worth, with up to another 30 days to pay)but also that you are able to pay that debt off.  

So in other words, if you pay your full statement balance from last month (and avoid the ridiculously high interest rates that come with not paying your full due balance) but keep your current month's balance until it comes due at the end of the month, you are keeping a balance while avoiding the dark side of the lending game.  I think of it as the credit card company is spotting you for 30 days. And you are earning rewards and building credit at the same time . Nobody needs to be paying interest in order to improve their credit score.  

Reply by
Shadow2084

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I too am debt free and carry a zero balance on my credit cards.  Like you, I received a great score of "C" (sarcasm intended).  My bad I guess.

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ESYoung

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A previous post said to pay off the credit cards down to $5.00.  That way the interest charge is low and the Utilization is high (A).

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bLueidbLondie724

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ITA....  I was thinking the SAME exact thing myself. It's like I'm ****ed if I do, & I;m ****ed if I don't. Grrrrrr.

Reply by
Moneymarker007

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I realized credit utilization is just a game with numbers. Keep it simple, make a low monthly subscription to something to be due 1 day after your card is due, and set your card to pay off the full bill when it is due. Then, you will always carry that 1% credit utilization through the whole month. 

For example, my main credit card is due on the 22nd of each month, I pay for my cell phone on the 23rd then I set the card to be paid off automatically by the due date. As a result, I don't have to remind myself later if I paid for the card and not, it does not matter when they pull report my credit utilization for that card, it will show the card has a credit utilization of 1.5%. Any other additional purchase, then you might want to consider paying it off, so it doesn't go over 10%. This alone will get you an A for credit utilization.

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CrPac

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I completely agree. I have 0% utilization for years now and still have a C. I'll take the C on my score. In my mind having no debt is an A+. It means I have the cash on hand to psy cash for what I need. I can't understand why the credit bureaus find this a negative thing. 

Reply by
wizard8873

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You can get to A easily. All you need to do is pay once you're monthly statement closes. Say you close Dec 3 and require payment by Jan 1. Charge you Nov expenses on the CC and pay on Dec 4. You're then seen as using your credit, gain a good grade, and you don't pay interest. Just make sure you stay under 20% for your CC and total credit otherwise you can fall into the B and C range still.

Reply by
SirSavesALot

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Hanq is right. Your score will be higher if there is a small balance owed (ideally as little as possible, definately under 10%) at the statement closing date as opposed to a zero balance owed. You then pay off the small balance owed by the due date and you are not charged any interest. There is no benefit whatsoever to your credit score of carrying a balance/paying interest. Also note that paying the entire balance off on time every month is not enough to get the highest score possible. The utilization rate (most cards report this as the amount you owed on your statement closing date) is one of the most important aspects of your credit report.

Their thinking in a nutshell is that even if you pay your bill on time every month the fact that you use a high percentage of your available credit means that if you fall under unfortunate circumstances you will be less well prepared to deal with it than someone who typically uses only a small percentage of their available credit.

Reply by
joelfed1

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Same with Me, Karma !!!

Reply by
operator4220

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its all a gamed enterprise. 

Reply by
kimba999

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I have the same thing - I have over $75,000 in limits and I have $0 in utilization and they give me a "C"grade. I don't get it.

I use my cards all the time (particularly two that I get points on) but pay them off every month. I haven't paid interest on a credit card in many years. 

Reply by
Miky469

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i  agree with you

Reply by
APeople

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Agree 100% And WATCH OUT FOR CREDIT KARMA's ALERTS The two times I followed their advice, my credit score went DOWN. The first alert was I'm not using my "good" credit to my advantage and I should utilize it by getting a Credit Card or Loan to improve my Credit Score. Thinking "I do really need to improve my score", I got a $500 limit card from my bank, paid it off every month. Score went DOWN 80 points. Next ALERT Credit Karma told me I had not updated my information for 6 months and blah, blah, blah so updated all of my information. Score dropped 20 points.

Credit utilization (On Credit Card) went from C when I didn't use it to a D when I got a card and paid lt off every month. No it did not go from C to D because I paid it off every month, it went down because the day I looked at it was 3 days before I usually pay off what I owe. SO $311 owed on a $500 limit card is OVER 60% of my credit of the credit available is used, so I get a D!!!! Checking it again the following month AFTER  I paid off the card, my score is a C again because $0 is not more than 60% of my available credit. CREDIT KARMA maybe useful for some things but when it comes down to the nitty gritty, don't panick if your score drops when you update your Credit Karma account information. It is neither accurate, nor does it help in these types of situations!

I'm with you Karma2959446 I can do just as well without my CC, and leaving it at a no balance is just as useful as carrying a balance and paying it off at the end of the month! If I want to improve my personal score, I will have to take on debt and not pay it off in full. In other words actually borrow money I don't need and pay interest..... No Thanks...

Reply by
BARON987

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Agreed - I use Credit cards for as many purchases as I can, I pay them ALL off before the due date , I pay NO INTEREST EVER (Except for my home mortgage) and they still offer cards they say will lower my monthly interest charges - AGAIN, I pay no interest!

Reply by
Karma242

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I had the same experince and could not understand the change from A to C after paying my 16% credit debt and reduce it to 0%. Now I know.

Reply by
kmb1011

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I am in the same boat. I really don't understand why I get a "C" if I pay them off I guess its becasue they are not making any interesrt off of me. Credit report are really unfair.

Reply by
Rockboflex

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Yep same here, I'll bet people who set this up owe up to their eyeballs in debt and are just ****ed that some people refuse to live that way. Funny story....my son and daughter n' law tried to buy a house...no debt, no credit cards, own everything they have and 25% down in cash. They were denied by three sources because of lack of credit...so I took the money out of one of the banks that turned him down and bought the house...then closed my accounts with that bank. 

Reply by
Elaine221

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Same here.  I also have a C and have NEVER missed a payment, and I also pay off my balances in less than 30 days.  If that ain't an A,  well..........I pass. 

Reply by
skiman13579

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A user who worked in a bank said what you do for that A grade without spending a lot of interest is pay off all but $5 of the balance every month.  The remaining balance gets reported as higher than 0% utilization and you get an 'A', but the $5 is so little you pay only pennies of interest.

Reply by
Oliviasnan

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I am the same. It took me  over 8 years to pay off 6 CC and I am finally debt free, with a "C"  credit card utilization grade! I don't care to get an A. I'd rather be debt free. If I don't have the money in my checking account to buy something, I don't buy it!

Reply by
SStehley

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there is a very simple solution. Pay off the balance before the due date. this eliminates any interest owed. the statement date reported to the bureaus is about a week later. Make a small purchase before the statement date under 20% and you get a A rating and you still pay no intrest

Reply by
okiegene

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I'm with you. Keep paying off and have no debt. You should have and A in my book.

Reply by
inDOzarks

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You're not alone but I discovered something to keep my scores high. I pay almost all JUST BEFORE MY STATEMENT CUTS each cycle. Let's say my balance on Disc is $205 cuts on July 12, I make a payment of $200 5 days that date so when statement cuts, it reports $5 to CRA. I do this on all my active cards and I maintain my scores in the 800s. I have a high revolving credit limit because I carry several cards, I keep the ones with the longest history while the ones that I have gotten my rewards from and have high annual fees, I just close them before the fees are charged. My credit score gets dinged with those applications but as long as I get approved and get my rewards, I don't mind. What matters is I don't get into debt while squeezing rewards and cash back for using credit cards.My scores bounce back in 3 months after several applications when I pay my balance in full.

While many say CCs are evil, I have to disagree. It can be a great financial tool when used responsibly.

Reply by
1Desmond

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good for you I am the same way''Blees you

Reply by
mrchipburner

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Amen to that!

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Termal

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I totally agree with you.

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wsmelser

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I've recently come into some money with a parent passing away.  Instead of paying off all my cards to zero, I kept my lowest interest card going and paid off ALL my other cards to $100 balance.  According to CreditKarma, a balance of zero shows Zero Utilization which is also a C grade.  But if you keep 1% balance on your limit then you get an A on CCU.  I'm waiting for my Credit report/history to pick up these payments to see what happens to my CCU score.  My credit score is also shooting up.  was 710, then 726, now 746....  BILL

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inDOzarks

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I can't help but laugh either. I'm 'punished' for having 0% utilization since my balance is a few hundreds while my credit limit is several hundred thousands? It doesn't make sense to me at all since I have a long credit history and even if I spend a few thousands spread into 3 cards that are active, I pay all the balance in full even before the bill comes. I'm not contemplating on any loans and I'm over 750 mark so I am at ease and can sleep soundly that I'm not getting sucked to advice online to keep a balance to meet below 30% credit utilization. No thanks.

Reply by
ThomMcCarthy

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This is a Catch-22 for everyone. I have three cards, but only use one because it keeps things clean. I pay it off twice a month when I'm paid. Hello C grade.

This is a bad situation. The credsit card companies want to make something or they'll hit your credit score.

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i am with you dude, sleeping peacefully, and if you have a chance to do a 0% balance transfer then you would be crazy not to take the offer, worry about your credit score when it really matters, like when your buying a house or car, in most other cases it doesnt matter, sleep well with the C!!

Reply by
Widman4

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I know. It's all a game to get us to use charge cards. Only in this crazy day is CASH not king!

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jacklondon2255

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@Shane BBY has trasnfered hands twice in the past year. The latest card (depending on what you credit limit is, is going to take a while to catch up with your credit report) I would recommend treating yourself to something small at BBY and charging it to the card. You can then call the # on the back of the card or online and ask them to upadte with the BIG 3 credit reports and you should soon be golden.... Thats a trade line and it could help. (I by no means know your situation, so please do not do exactly as I said if you feel an inkling that this could be detremental to your score... All in all its a trade line so it could be good or bad depending...

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jacklondon2255

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Do you think they want us to pay late/ carry a balance in order for them to make money? There is not point in lendig someone that is "always going to pay" right?

I too am a C paticipant that went from a 770's to a 680's by leaving a balance on my ccount for a week.... it happned to be the week the cards reported.... I hope it bounces back, but we will see...

That score is so important to me and I am trying so hard to not obsesss lol.

Has anyone else been in similar situations and had a good outcome? My next step is purchasing a home and after all these years of trying to get it right, this last score was devestating!

Reply by
RCT1962

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I agree. This game is STUPID! I have never stiffed anyone for anything but becasue I have a small heating and air business and started using a "rewards" card to purchase instead of the "company credit account" my score tanked due to using 80-90 percent of the credit limit on some months that were very business heavy. Never mind I paid ALL THE BALANCE and did not pay one red cent of interest to the CC company. Ha ha. What wonks came up with this silly crap? What a shame we all have to live on this plantation.

Reply by
Crosstownbus

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I agree with you! I had over $20,000 in credit card debt two years ago. I now have zero balances and a "C" grade. I love it!

Reply by
Coacher2037

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Same situation here. Credit card debt free!!  I will take the "C"

Reply by
duplex80

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The trick to this is understanding your Closing Date versus your Due Date.  Whatever balance is on your card at your Closing Date will get reported to the credit bureaus.  However, you then have a grace period from then to your Due date to make the payment, interest-free if you pay off the entire balance.  This is how I get my credit utilization to reflect an A grade.  Add in automatic payment of the entire balance each month near or on the Due Date, and you don't even have to worry about it.  I don't pay interest on my credit cards, and I use them for ALL my purchases, for the cash back rewards of course - this way they're essentially paying you to use their cards.

Reply by
tech05

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That makes a lot of since. What I see is that no matter how hard you go in, they reward those that stay in debt. You are a example of what should be the thought process of all people.

Keep the credit to 0 and use cash.

Reply by
Bigbuck00

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Man......... This is so true!  I pay my CC balance of $1000.00 down FAITHFULLY before my due date every month and never been late in 6 months and I was at at D grade which just got upgraded to a C!  WTH!!!

Reply by
AlexaLog

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Comment To: Karma2959446's Grading Score of ""C" with ZERO (0% Utilization) - Check out the scoring chart, again!  First Column which U and I are fall into, with NO to very little Debt on Credit Cards n Score Way High.... is a "C" with a darker background, then "A", B, C, etc.  I don't believe it is differentiated from the "other grade C" - How to tell and why?  Please explain this scoring, Credit Karma!  I believe my credit scorer should be MUCH higher and is lower than shud be due to this "Grade C"  Thank you!

Reply by
deastl

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I was wondering the same thing...I have a C as well, and I pay my credit card off on the same day that I charge it most times.  I don't understand the C.  Also my "credit score" on this website is a lot lower than the credit score on the 3 major credit company websites.  My score is well in to the 700s on Trans, Experian, and Equifax.  But on here, it's in the upper 680s.  What's up with that?

Reply by
MediaGuy71

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I agree completely. The calculation of someone utilizing zero percent of their available credit cards should be an A. It's such a racket. Now, to boost my credit score, do I need to carry a balance on those cards, or is it beneficial to simply use them and pay them off every month?

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I learned my lesson about the high utilization on a single card the hard way. After building my score up to over a 750 in just 7 months (over a 100 point increase), paying off 2 credit cards in full, I got those 2 cards to give me a great balance transfer deal (0% for 12 months). My third card has a terrible interest rate so I did the balance transfer to my two cards, and although my overall utilization rate is actually lower due to payments I have made, my credit score tanked 76 points practically overnight.  Never do a balance transfer that will leave a single card with over a 90% utilization rate even if your overall rate is good. Luckily I had the money to get the rate under 90% immediately, but watching my score tank 76 points really hurt haha, especially when you have to wait weeks for your due date and the new balance to report.

The advice in the CK article mentions single card utilization rate impact referring to those with little credit history; however, I have a long and overall good credit history and it still tanked my score 76 points, so do not feel comfortable with that advice they gave, no matter your credit history...it hurts.

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jessieantjoee

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I can definitely confirm this. I did a balance transfer of 500 so I would stop paying so much interest and hopefully pay off the credit card faster... (and I did this 2 months before my plan of applying for a home loan) and my credit score tanked like a solid 50+ points. 

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rveney

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Thanks.This was very helpful. I have a lot of debt and I have been reduciing the debt down. I wasn considering doing a balance transfer to a single card for the lower rate. So now I will spread the accounts out to lower rated cards to keep the utilization down.

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CKfriend

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I know, I had my score plummet 17 points in one week after 2 hard inquiries. I was devastated. I have worked very hard to overcome some serious financial hits when I got laid off several years ago and even had to sell my home. I appreciate your advice as I was considering a balance transfer  on one of my cards. I will follow your advice. I am so thankful for Credit Karma. I have learned alot from the site and people's comments as well.   

Reply by
Gideonjoshua77

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If you are transfering a balance,make sure that the card you are transferring to has a utilization rate of 30% or less.The lower your utilization rate the higher the score.

Reply by
kimba999

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I think it was still a good idea if you saved a lot of money on the interest by doing the transfer. You'll build your score back up.  Unless, of course, you were buying a home soon after and the hit on your score drives up your mortgage. 

Reply by
digiben

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After reading this I now know why my score tanked 100 points in a month or two, because I did a balance transfer!  Argg...  This is terrible as I was around 760 and now at 649.. right when I am buying a house.

Reply by
nsorrentino

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What cards do you recommend to increase your credit if you have bad credit . Trying to rebuild . 100 points wow teach me please 

Reply by
marilu333

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Thanks. Same thing happened to me. Overall utilization is great but that single transfer to get the 0% interest dropped my credit score from excellent to good.  Not good.

Reply by
CBP1

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I wish I had read your post before I listened to CreditKarma's advise. I transferred high rate credit cards to a 18 month no interest credit card. Now my credit score has dropped just as I was rebuilding my credit. Last time I will listen to CK!!

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   I have had a Capitol One card for 2 years now. I use it to pay several of my bills, and 95% of all other purchases;. I have only had a $0 balance twice in the last year. Yet, I have paid $0 in interest, and have cashed in over $100 in rebate credit this year. That means they have paid me over $100 to use their card. 

   I do this, because I make a payment every week. The rule is: Every purchase has a grace period until the due date following the 25 day minimum . So as long as no 1 purchase makes it to its due date, there is no interest. Basically, I average $1000/mo in transactions, so I pay them $250/wk. This means I always have a balance to report, but I never pay interest. They have also, increased my credit limit twice in 2 years.

   I also have a Chase card that I quit using, so they lowered my limit and increased my interest rate. So, for that card, I started using it for my netflix bill. I let it sit for a month so they could charge me interest on $8. Then I paid my balance minus $5 every time my card was billed. After I cancelled Netflix, I started making one purchase per month, and I pay all but $10-25. I let them charge me interest on that. Then, I use it again and repeat. They have increased my limit again, and always report a balance. It cost me about $10/yr in interest. 

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Learningtopay

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Thank you! Very helpful!

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What I've learned more than anything in the almost 20 years I've been on file with the bureaus is, KEEP YOUR OLDEST ACCOUNTS OPEN even if you don't intend on using them.  They are your proverbial stake in the ground when it comes to "credit history."  Replacing those accounts with new ones is entirely permissible, just don't close them in the process, at least not without realizing the consequences.

Additionally, I can't agree more with the fact paying off your credit cards each month is strongly advised.  The bureaus need to see there's been activity on your account, but it's not as important to them if you choose to carry a small balance.  Paying interest just to play that game is unnecessary and ill advised.

Finally, don't get caught in the cash rewards trap unless you've planned well ahead.  Have a clear cut strategy if you're going to get involved in points/cash back, or else expect to overspend just to "earn" your reward(s), even though spending less and keeping your own money in the bank instead of with the CC companies would have been a wiser choice.

Spend less or save more, and you'll do all right.

Credit Karma Team
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Great tips! Thanks for sharing.

Reply by
ESYoung

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Thank you

Reply by
soozen22

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I agree, keeping those old cards open is key. My score was 815 and I made the mistake of closing my oldest 2 cards and my score tanked to 736. No one ever told me about this. I pay my balance off every month which is also vital. Now I am trying to build back up.

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MLDAWG

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I agree with you prefer not carrying a balance at all.  I had to buy a car unexepectly and had a CS of 680. When I lokked at my credit report and started using  CK I leanred about utilization.  I had 2 cards with $1500 CL apiece.  I never wanted them to go higher and I paid them off almost in full each month.

But because my limist were so low I kept getting a bad score.  SO  I have taken a chance and opened 4 new cards with $5k apiece in CL.  I did a BT for $2k to a Chase Freedom card.  Ran up some expenses on an Amex card for $300 and set up recurring payments of $35 per month from an acct I dont use.  Opened a 2nd Amex just ti use and pay off each month.  Then shredded all of the cards except one.'

I like my life simple.  I dont care about rewards. Prefer to save and carry no balance.  So I set up aitomatic payments cut the cards  up and forget about them. Use one card for purchases and pay that card each time I make a purcchase.  I do use one card to pay my auto insurance but I pay that each month.

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CsrLiz344

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I disagree with your last point. I don't overspend just to get cash back, I use my cards on budgeted expenses ( gas, food, bills) so the money is always in my bank account waiting to pay the bill.

 Used wisely, credit cards are a good thing.

Reply by
Greg661

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I agree with this analogy compleetly

Reply by
NtGvgUpMyLife2

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At this point, I couldn't care what score I have. Haven't for years. Had 1 CC for years, using very sparingly and paying off whenever I did. Turned to strictly cash transactions, even when buying a car. The fact that such companies can control your life and wreck havoc on it just boggles my mind. We all felt the housing crash because of people who could not afford to own one to begin with. Where was the safety check back then? Oh, that's right, our glorious Gov't said everyone has the right to own property. My CC score is now a Big Fat "F". I owe $43 on a BoA card (only cause I bank there now) and needed it for an internet transaction. Just closed my Kohl's accout I never even activated and will do same for Sears. Got the savings for applying, don;t need them. My credit was ruined because a judgement on the person we sued 4 years ago and won the case, was put on our names instead of him. Though two were removed after cost, the Equifax one remains, setting my score now at 754. I am working towards getting off grid soon. Let those who worry about what big brother says, I don't want someone else controlling what I do, especially the BANKS!

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I  started my credit one year ago, I have a cc from B ofA and have used it for a year, it shows an F  for usages , and and A for PAYMENT , but I made the mistake of paying and 8,000 dollard account and my credit drop from 702 to 585, so I call Karma , they gave me a bunch of ideas , I did what they say, and its true , if you keep your usage below 30 % it will go up but jesus, it takes for ever, and about paying it of , its not a good idea, you should keep at least 5 %  this have increase my credit up by 20 points in a two month period , I hope this helps someone out there. 

Reply by
BARON987

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So you are saying - I should keep a balance and pay crazy interest  to get a few points on my credit score - sorry, I would rather be debt free and NOT pay the banks 20% interest

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This article states that you can pay off your revolving accounts monthly and still show activity and have a good rating, but then it states that 0% utilization is also bad. I spend thousands of dollars on my revolving credit cards every month but I pay it in full each month which should be the epitome of responsible spending; however, my utilization shows as 0%, negatively affecting my credit score. This article contradicts itself in that way and I am not willing to pay unneccesary interest on revolving balances just to increase my utilization, so I am being punished for being responsible which is silly. This article makes it sound as though if you use your credit regularly but pay the entire balance each month it will still reflect in your utilization but that is just not true, or at least it hasn't been for me. 

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hurryblonde

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i use my cards throughout the month and pay them off before they are due. my credit score on this website does take a slight hit for having a zero percent utilization. but my real scores as checked at annualcreditreport, and through banks etc. are significantly higher than what creditkarma calculates. i think the real institutions recognize the facts and reward paying off the entire balance monthly. zero utilization is probably only a negative factor if someone simply never uses their credit at all. just a guess.

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shakazoid

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You misunderstood the article's point of "zero utilization" . It means not using the card at all , totally different from paying off the balance monthly once you have received a statement. You are already doing it the right way . Nothing is reported to the credit bureau if there is no activity(usage) within a cycle. Hence it is advisable to use and pay off whatever balance you get as a bill to avoid interest payment and still get a satisfactory report generated to the bureau

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WilliamMitchell

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Your due date and end of billing cycle are two different things.  Wait for the bill to come out, they don't charge interest until after the due date.  If you pay off your balance before the bill actually posts, you will show a 0% utilization.  So you always have activity showing, a balance showing, but never pay interest.  Hope this helps.  It's what I do and my credit went up 62 points in three months since getting the new card.

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theeref

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Paying off balances each month in full negatively affects credit, because it doesn't show utilization. The card will report current balance only, not usage, so it is best to leave a few dollars on the account so they can report something. Credit card companies designed it this way, because the cc's purpose is to make money through interest. People who pay off their balances, make them no money, and they certainly will not go out of their way to help those people with their credit scores. It is really not fair, because it is not an accurate portrayal of credit worthiness, but there are ways around it. After poor credit, loan default, maxed out cards, and years of work on my credit, I have figured out how to be the one who benefits from my finances! I have 11 revolving credit accounts (that I worked hard to get), 1 that I paid off and never use due to 31.99% rate, 1 home depot for specific items, and 1 low low low interest card, used daily for gas and restaurants, and nearly paid off each month. The rest are paid off, and each month, I assign one to be used for merchandise, travel, etc for that month only, and I pay it off in 2 or 3 payments after that. This ensures that I pay very little in interest, use all cards at least 2 or 3 months of the year, and maintain very low balances on each. This keeps me living within my budget and paying close attention to my finances. I only carry the low interest card and the card that is assigned for that month, the home depot card only comes out to go to home depot, and the rest stay locked in the safe!

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jambababe

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Try always leaving a balance of $5.00. Just enough to trigger the credit bureaus that your keeping your limit below 30% of the limit on the card but not so much as to have to pay a lot of interest.

Reply by
alti2de000

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

The problem is, folks, that the reporting system does not allow the credit agencies to continuously check your credit during the month.  All they know is if you spent, and if you paid.  If you are carrying a balance, they know if the balance resulted in a $0 balance, or if it resulted in a +$0 balance.  I agree that this is not an accurate depiction of your credit worthiness.  But, I don't want anybody in my business all month.  I understand why we all must graded on our credit wortiness, but the less...the better.  I actually carry a balance on my 10 credit cards around $100, but still got a grade of C on my Utilization.  Last I checked, any balance above $0 is an above 0% Utilization.  Right?

Reply by
themrjkr

1 Contribution
0 People Helped

All you need to do is send your payment the day after you receive your credit card statement. If you charge $100 on 9/15, and your statement closes on the 9/30, wait until after 10/1 to pay the $100. You won't be charged interest if you pay it off by 10/31. A lot of folks have had this problem, but it's really very simple. The $100 will show up on your credit report as utilization, but you won't pay any interest.

Reply by
BARON987

3 Contributions
41 People Helped

Boy are you right! - I do the same - I have never been late on a payment and pay of ALL balances and the end of the period.  However, my balances seem to get reported monthly, so it seems that I always have a balance even though it is paid off monthly - I guess that's okay based on what others have said about a credit card balance's effect on your credit score - still I PAY NO INTEREST, so I am happy!

Reply by
smbangel44

1 Contribution
0 People Helped

All you have to do is find out what date your credit card company reports your balance. Ask them to make your due date a bit after that date. Pay your credit card off in full when it's due, each month, and profit.

Reply by
007Bat

1 Contribution
0 People Helped

You should play their game.  Take one of the cards you had been paying off monthly, leave a balance and pay it off in say 3 months.  Next quarter take another card and do the same while keeping the other cards with zero monthly balances.

In the three months you carried a balance, your finance charges should be minimum however your credit score will increase expeditiously.

Reply by
srfrgrl1

1 Contribution
0 People Helped

I do the same thing and have a C rating...I charge nearly all my monthly expenses on a credit card (gas, groceries, utilities, etc), then pay off the balance each month. I guess the banks want to "punish" you for either being responsible or not being foolish enough to pay their outrageous interest charges. Ridiculous!

Reply by
bogwalkercg

1 Contribution
0 People Helped

I really thnk it all has to do with the credit card company making money off of us in interest and that is that! If they do not make money off of us in interest, we get a "C" as punishment.  They dont care a bit about us.

Reply by
buckleroos

1 Contribution
0 People Helped

Same issue with me...

Reply by
oshonbreez58

3 Contributions
0 People Helped

I too, am a person that clears my balances, depending on amount utilized, within a month or 2. I find here that I'm still penalized for not carrying a balance. This doesn't make sense. How should paying off accounts  negatively affect your credit score. How do you correct this

Reply by
goldenlioness

1 Contribution
0 People Helped

Same with me -- utilization shows as zero, even though I do use a little bit of the limit (less than 10%) each month.

Reply by
drm0352

7 Contributions
93 People Helped

The main point, is that if your trying to build your credit, it takes resources, and it will usually take money in the form of some kind of interest payment. It is true, you do get penalized slightly for having a 0% utilization when it is reported to the credit Bureaus, because this shows them that you haven't been utilizing your credit and they don't have anything to grade your credit on, besides the length of time the account has been open, and whether or not you have been on time with your payments. Even though it is not desireable to have to pay some interest on an account with a utilization balance between 10-20%, it at least gives the credit Bureaus something to go off of for grading how responsibly your using your credit....and not using it at all ( 0% utilization ) tells them you don't use it, and possibly don't need it.

1 Contribution
67 People Helped

Helpful to 67 out of 74 people

I understand the logic behind 0% credit card utilization affecting credit negatively. But I'm able to pay off my credit cards every month and do so. It doens't make sense to carry a balance and incur unnecessary expense solely for the purpose of improving my credit from excellent to "more excellent." 

Plus it gives me the warm fuzzies to use the credit card companies' money for free. 

Reply by
djmartinusen

4 Contributions
190 People Helped
Helpful to 29 out of 33 people

The credit card companies are still making money on your purchases, charging vendors when you shop. The more you spend, the more they make. It all adds up.

Reply by
WilliamMitchell

2 Contributions
16 People Helped
Helpful to 13 out of 15 people

You don't incur interest until after the due date, not the billing date.  If your bill shows $300 on a $1000 card, you will show 30% utilization.  Pay it before the due date but AFTER the bill posts, and you will pay 0% interest and still show utilization.  Paying off before a new billing cycle starts nets you nothing with the beureaus. 

Reply by
OnTrack2

3 Contributions
10 People Helped
Helpful to 10 out of 13 people

You are getting the warm fuzzies of the back of the business owner.  No, the credit card companies are making money on your transaction.  I am a VERY small business owner with a Merchant Account (means I can accept credit cards from customers)  I PAY out of what I charge a customer.  So the CC companies make money off my back AND if you don't pay your balance they make more money on your interest.  They don't loose.  They just passed a law that businesses con "NOW" add the cost of the CC company fees on to the customer.  It was always done before, but just hidden in the cost of what you are buying.  But now the business owner can set the cost of the product or service PLUS ad the fees the CC company charges businesses.  So you are paying for your warm fuzzy.

1 Contribution
79 People Helped

Helpful to 79 out of 87 people

I'm glad to have joined this community of individuals that have contributed their personal experience's in rebuilding their credit issues'. As I begin to rebuild my credit I am coming to understand that it is not as fearful as I thought it would be. All I had to do was make a committment to focusing on the issues in my credit history that were affecting my credit. After coming to Credit Karma and researching through so many contributors experience's I realized that I was becoming inspired to hear their testimonies and their success's. I began to understand important distinctions' in understanding the FICO Scoring system a little better than I had previously. Although, I carry alot of student loans which are all current "THANK GOD" I still have other aspirational goals for my future. I have to now focus on re-building my credit-debt-ratio. I would like to thank everyone for their personal testimonies because, wheither you know it or not it is helping others (such as myself) in realizing that if others have over come the fear of tackling their credit score's and have been successful at it, then they can too do it!

Steadyclimber

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