93 People Helped
Member Since: October 2010
Not quite. You don't have to pay any interest to have a good utilization ratio. The utilization is based on your last statement balance, but if you pay off the entire statement balance before the due date, you won't be charged any interest.
For example, say my card has a $1000 limit and my statement balance at the end of January is $200. My utilization is 20%. As long as I pay $200 before the due date (say February 25th), I won't be charged any interest. Now let's say I charge another $300 on the card to get my balance to $500, but then I pay $200 on Feb. 20th. I won't be charged any interest because I paid my balance of $200 in full, and my next statement balance will be $300, and my utilization would be 30%. Now if I couldn't pay off the full $200 by Feb. 25th, then I would have to pay interest on whatever my balance was.
Also, the credit card companies aren't the ones that determine what goes into a credit score
albertoleecho's reply was:
It looks like Equifax has stopped giving away the free score
Credit.com and Creditsesame.com both give you the Experian score once a month.
Quizzle.com will give you your Equifax report every 6 months but not the score. As far as I know you can't get your Equifax score for free.
albertoleecho's response was:
The first card that you are transferring from will have a lower balance, so your total balance to limit ratio will go down. This will help you as long as you don't run up the balance on the old card again after you transfer it.
However, because you opening a new line of credit, which usually knocks your score a few points, you might not see the increase right away.
Yeah it's kind of weird but you basically don't help your score at all by paying off your bill early. You have to wait until the actual statement comes out, and then pay off the card. Luckily, you still don't have to pay any interest.
I agree that it's ridiculous that you have to wait before you pay off your bill to help your credit score.
Ask them for a credit card and explain your situation. Hopefully they just approve you for a regular card with a low limit ($500). More likely though is that they will give you a secured credit card for 6 months, which is basically a credit card that you have to put down a deposit for. Use the card at least once a month, it doesn't matter how much, and always pay your bill on time.
After a few months you will probably start getting credit card offers in the mail, which you can take if you like them. Or after about 6 months you can go back to your bank and you should be able to get a regular credit card.