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Drastic drop in credit score
Hi there
Hopefully you can answer a question for me. Last month I opened a new account and financed an item for $2,500. My line of credit was $2500, just enough to cover the item. My credit score dropped 54 points as a result of this. If I go ahead and pay this thing off before they report to the credit bureau again (June 2016), will I get my 54 points back?

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You would probably get most of them back because your credit utilization would drop drastically, and that's nearly a third of your score. You might not get all of them back though, because opening new lines of credit often cost you a few points, which you get back over the next few months as you establish a pattern of paying on time.
You can spend up to your credit limit no problem, but there are a few days of the month when it pays to be mindful of your balance. The first is your due date, the second is the closing date. Your balance on the closing date is what is reported to the credit bureaus. 

Best strategy: pay your bill in full by the due date. From the day after the due date to the closing date, put something small on the card, and don't use more than 10% of your limit. After the closing date, use it freely (without going over the limit, of course) until the next due date. This way you won't pay any interest, but you will still be reporting a balance. A small balance is better for your score than none at all. 

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Whenever you get NEW credit, it is normal for your fico score to drop... your fico will go bacck up after you pay your account monthly ON TIME. If you just pay off the account, your fico may stay the same and not go up. Fico scores arre calculated on your payment and credit usage.. meaning.. that account that you took for $2600, paid monthly on time will increase your fico score again, once your account balance it's lower and you made at least 6 payments you will notice it.. One thing you can do it's pay more than your monthly payment, or some to your principal balance, but leave a balance so you can make payments on it for a few months.. the best accounts to impact your fico are paid monthly for at least a year, if it is an installment account, if it is a credit card, pay more than the monthly payment, if you can bring the balance to at least half the credit line it will be the best way to get your fico up.. any credit line with higher than 30% balance will be contraproductive.

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Don't lose hope

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I will assume that you have other credit account. If you you pay it off right away your scores may exceed what they previously were. Allow me to explain...

By opening a new account, your available credit increased, thereby, lowering your credit utilization. (Good) However, you maxed out the credit line, which increased your utilization (bad, looks like risky behaviour to a creditor). 

My advice to you is if the new account has favorable terms, such as, 0% interest for a period of time, I would not be in a hurry to pay it off. If, however, this is not the case, and you are planning on opening any more accounts, especially if you will be financing a house or a car in the nearer term, I would suggest paying it off imediately and keeping the account open for as long as possible (assuming there is no fee for doing so)

The increased cost of getting additional financing would far outwhey the short term benefit of any favorable terms.

I hope this helps and good luck!

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Yes, things get better.

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I did the same thing. 

I got a merchant credit card for some tires, used the entire credit line.

My credit rating dropped the same 54 points.

I then paid it off but still showed up as using 100% of my credit line for the card.

My scores were around 650, 2 months later and my scores are up to 710.

Pay off the account or get the balance down to 10% or lower and you will be in good shape.

Pay all credit card balances off too every month.

Good luck.

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Probably not right away. Your score probably dropped because of a few things: A new inquiry, a new account, higher debt. These things will eventually help you, but initially they wil have a negative impact.

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I am trying to establish credit history

I have lived debt free for more than a decade. I bought my home and cars with cash and live within my means. I buy what I need and save whats left over  towards the next thing I may want,Recently I have been helping a family  member alot  and decided it may be best to buy them a home so I inquired about a home equity loan at my bank as i found a nice starter home for my family member and even considered moving to that home and renting this one  out if they didnt want to relocate here.

My bank was nice and said  my home was worth more than triple of what I wanted to borrow BUT since my only credit report was on Equifax they couldnt approve since they have some sort of business relationship with Experian, I have an Experian account but its always zero as i never have anything reported good or bad as I pay my bills on time. I was advised to get a CapitolOne card and use it like my debit and that would go into my credit report and in a few months I could reapply for the Equity loan.

I do have a question however since i am used to paying right away, as to how to keep my credit card paid and still get credit reported. Its confusing to me as I signed up for autopay for the minimum in case i ever forgot but I go to their site within 1-2 days and keep paying off the balances as I dont want to get caught into their interest rates later as it currently is a high rate if i leave a balance.

Do I have to leave a balance on it to have them report it to credit bureau? Wouldnt my transactions be reported? At the moment I am actually overpaid as the monthly min they take out is $25 and I have only a $20 balance so should I charge a few little things so it will show a few days before the due date? I want  to be responsible as this credit card isnt what I wanted but since I have it I want to use it to build  my credit score enough to show on Experian. maybe I am getting old but it confuses me.

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FHA is your friend. Interest rates are very low.  I just bought a home with a 3% down payment.  SWBC is my lender and they were fantastic.  They didn't look at my income and tell me what I could "afford".  The asked me where I wanted to keep my total mortgage/interest/tax bill, and worked backwards from that.  Even *after* you've got a mortgage with them, they're awesome.  My first month, I wanted to make two payments.  The goal is to make two payments a month for six months (leaving me paid up for six months in advance in case of I'm out of work for injury or illness), then making one payment plus additional towards the principal.  Welllll, I forgot that I had set up automatic draft, so I ended up having three full payments drafted from my checking account in 2 weeks.  Called them up, and the reversed one of the charges - quick, easy, painless. Couldn't be happier with them.  Just be prepared for a significant drop in your credit score when you close on the house.

I've read that credit cards can build your credit pretty well, but I've also found out the hard way that they can drag you down as well.  

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I have no score,but scared to obtain new credit. What should i do

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Don't be scared, you have to start at some point. The biggest thing is: Take care of your credit like it is a living thing. Good credit is necessary to finance a house, car, loans...etc.

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