97 People Helped
Member Since: April 2012
Sounds a little like a Cinderella "Credit Building" story.....and if it was that amazing, why four stars instead of five? I have a capital one credit card right now, I utilize between 10-50% each month and pay it off when it's due...it was nice for the first four or five months, and then my credit score inscrease completely stopped, even though i still continued to show very responsible credit utilization for another 8 months. They seemed eager to help with building my credit at first, and even showed that they were a little effective in building my credit score for the first few months....but after that, (and it has been about 14 months since I opened the credit line) they haven't had any effect on helping my credit, and surely haven't offered an increase in my credit limit on the card....I'm thinking unless they see some sort of long-term benefit to them, they won't be doing a whole lot in the line of helping out the average consumer.
drm0352's reply was:
so, that cc has a credit history length of 5 years....which helps your credit regardless of the standings on the account more than people realize. Since you are a joint account holder on that account, I think the best course of action would be for you to try and get the account balance down to at least below 50%, and below 20% if it's possible. Don't close the account if you dont have to, or don't remove yourself from the account unless you absolutely have to.
I went through the same situation, accept my credit score dropped to a 520. I got a secured credit card with a limit of $300, and that was exactly a year ago. I have been using the card monthly for purchases ranging from $30-$70 monthly, and paying them off by the end of the month. My score on credit Karma has only gone up about 60 points, and the company i got the secured card from is still telling me I'm not eligible for a credit limit increase. I find this hard to beleive, since when i got an actual credit report pulled, my score was 650, not 580 like credit Karma is reporting it, and I get pre-approved credit card notices from more prestigous financial institutions for unsecured credit cards with higher limits. I'm not sure if taking on another credit card ( even though this one will be unsecured instead of secured like the one I already have ) will be the best idea for continueing to repair my credit......any suggestions, or any good ideas for a good financial institution to obtain an unsecured credit card from?
blueskies....if she had an interest rate of 20%, like im sure orchard stuck her with.....actually do the math before you open your mouth please....when the monthly payment your making doesnt even pay off the interest on the total amount, and that starts compounding each month....it is very possible to have a large balance after 6 months of a 20% APR compounding interest......the best thing to do is to use around 1/4 of your limit monthly, and pay the amount you use off completely before the due date, or if you want you can even spend like $50, and make a payment for $45....that way you technically are carrying over a balance that the greedy credit company can put their high interest rate on, and this makes them happy, and since they profit more, they are more likely to increase your limit, and report your usage to increase your credit score.
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.
Actually...no...this isn't correct or helpful advice. I have noticed that paying off your balance before the due date is great for not having to pay interest on the balance, but is not helpful when trying to buld credit. The only thing that matters for your actual credit score is that your payments are on time, and that you keep your utilization between 10-20% when the cc utilization is reported to the credit Bureaus. The percentage of utilization is what they consider, and having a record of 0% utilization does not help to build your credit score, in fact, I've personally experienced it slightly dropping my score....and that's because when your not showing any utilization of your credit, then what would they have to grade your credit score on? Just try to have the balance of the card paid down to around 10% before it's due date, and by the time it is reported to the credit Bureaus to show that you pay on time, and that you are responsibly utilizing your credit by actually showing some percentage of utilization on the balance. I am not completely sure if having a balance ranging from 1%-10% when it is reported to the credit Bureaus will have a much different impact on your credit score, or what impact if any it will cause as compared to having a balance of at least 10%. I guess it would be possible ( though I haven't tried this yet, as my cc company reports 2 days after my bill is due ) to pay your balance in full 2 days before the due date so you don't have any interest charged, and then increase your balance to around 10% immediately after your bill due date, so that the balance of ~10% will be the utilization that is reported to the credit Bureaus, but you won't get charged interest at the same time. Let me know if someone has tried this, and what impact it has had....in the meantime i hope this was helpful, and I will be trying the method I mentioned towards the end of the post.
And what if you have a secured card with a cc, and you have utilized it and payed it off monthly for a year, and the cc still will not approve an increase in the credit limit on the card? I beleive that this is one factor that it currently keeping me from increasing my credit an further than I already have, having a low credit limit with a cc that isn't willing to raise it....any suggestions?