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Nicjec

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80% credit utilization - very significant drop in credit score
I'm new to credit (1 year credit history at the moment) and I'm trying to establish excellent credit for myself. I wasn't aware that if you go over the 80% credit utilization, that your credit score would drop.

It dropped from 724 to 698. My heart sank when I saw this. I'm very responsible with my money and thought that if I'd use my credit card more, it'd positively impact my credit score.

I paid off the credit immediately. My credit limit is only $700, so it was only a few hundred of dollars. I use my credit card as if it were my debit card. I would never spend more than I keep in my checkings account. I've learned now that it's best to minimize usage of credit and make payments on time to establish good credit.

My question is: will my credit score bounce up back to 724 when they process the payment or did I make a big mistake? Any additional advice for a credit noob is greatly appreciated.

Thank you!

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It'll bounce back up pretty quick.  Your ideal usage for highest credit score is 9% or lower.  I know, that's not very much with the credit limit you have, but that is the 'ideal'.  Pay it after the bill comes in so it will be recorded as on-time payment.  It would also help when you are able to get higher limit credit cards and/or credit lines.  The mkore credit you have available, the higher the credit score.  Don't have to use it all (I sure don't!) but to have it available shows that the financial institutions trust you to pay them back.  May sound crazy, but I have learned that through the articles on this site and putting into practice what I have learned. 

Reply by
Nicjec

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Just the response I was hoping for. Very informative and helpful!

Thanks jwsister!

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