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Question By
hbraxton

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just opened a secured credit card w/200$ limit and my score went down 52pts. Paid first bill in full
why would it drop so much? I was told to use 30% but since my limit was 200 it really didnt matter as long as I paid it in full (which I did) 2 days before the due date.

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Top Contributor
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Keep making your payments

your score will drop until you have made a few payments.

Scores are not a permanant thing, they fluctuate daily. opening new accounts will lower your score temporarily, specially when you have few accounts. pay the bills on time and your score will go up.

Also realize that it takes a time for reporting to occur, sometimes up to 60 days for cross reporting so time is the key.

Good luck

Top Contributor
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Utilization

When you say "it didn't matter" i'm assuming you ended up using more than 30%? It very much does matter if you use more than 30%, whether or not you pay it off on time. That is because the company reports your usage to bureaus on a DIFFERENT day than your statement's due date. Usually before. So if you used 80% at the time it was reported, regardless of whether or not you paid it off, your utilization ratio is high. Utilization is just as important as paying off your balance, even if you pay it off in full. You can avoid this in the future by asking your CC issuer when they report to bureaus and planning to only have between 1-9% (up to 20% max IMO) on the day they report. If you spend more than 20%, see if you can pay off your balance more than once a month. If you can, you might have luck paying off SOME of your balance, enough to get that utilization back below 20% before they report it to the bureau. And as always, pay your balance in full whenever possible.

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