Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Cards
Profile Image

Question By
peregrine247

1 Contribution
14 People Helped
Utilizing Credit Cards to Build Credit - WITH NUMBERS!
Okay, so this isn't a question. After frittering around for a while and trying to figure out how to use my secured card to improve my credit, here's what I've figured out.

You have to carry a balance when the statement is GENERATED. For instance, my card statement cycle runs April 23 - May 22 and the payment for that cycle is DUE on June 19. When the May 23 - June 22 statement is generated (on May 22), I should be carrying a balance of 10-15% of my limit (my limit on this specific card is $200, so I spend $25). AFTER the statement is generated, I pay the balance from the previous cycle (anywhere between May 23 - June 18). With my schedule I pay the previous balance on the 6th and use my card again on the 14th. Voila! You're carrying a balance, but not paying interest.

I'm up 63 points in eight weeks. My credit was TERRIBLE, though, so I started out with the secured Capital One card. I hope to be able to buy a house in the next six months ... which will improve my cash flow significantly after the initial out-of-pocket expenses and help build more credit. Hooray!

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-25 of 30Results per page: 5 | 10 | 25Page 1 of 2   Previous | Next
1 Contribution
43 People Helped

I followed this plan and it worked.

Helpful to 43 out of 48 people

I followed the advice of the original poster and it worked.  I had practically no credit history and a very low score.  I got a Capital One secured card with a $350 limit.  I used it for 6 months, staying in the 20-30% utilzation range each month.  The most important part of this plan is to make sure that you are carrying a balance at the time of your monthly statement.  Then, pay off the balance in full shortly after your statement becomes available.  Exactly 6 months later, Capital One offered me an unsecured card with a $3000 limit.  I am very pleased.  Thanks to the original poster for the good advice.

Top Contributor
53 Contributions
1391 People Helped

Helpful to 35 out of 39 people

My attempts to rebuild my credit seem to be on a favorable path ... though it did involve a mystery denial.

I filed a Chapter 13 bankruptcy in 2006, discharged properly in 2011 - 2 months before I retired.  In March of 2013, I started rebuilding my credit by acquiring a secured VISA through my credit union with a $1,000 credit limit.  The credit union's policy stated that if I made 12 on-time monthly payments, my card would be converted to an unsecured card and my security deposit would be returned to me.

A Chapter 13 disappears from your credit file 7 years following the filing date.  And, mine did in June 2013.  Later, in December with only 9 months of credit history on the VISA, I decided to apply for 3 other credit cards - a PayPal Extras MasterCard issued by GE Capital Retail Bank (aka GECRB), a Walmart Discover card issued by GECRB, a Texaco/Chevron credit card issued by GECRB, and a Discover IT card issued by Discover.com.  This is where the mystery comes in.

I was approved for the Discover IT card ($750 credit limit), the Texaco/Chevron card ($300 credit limit), and the Walmart Discover card ($800 credit limit).  But GECRB denied my PayPal Extras MasterCard application for an odd reason, quote, "Unfortunately, we were unable to confirm your identity with enough confidence to issue the card."  The reason this was odd is because GECRB approved both the Walmart Discover card and Texaco/Chevron card immediately - without any apparent "identity" issue.

For the next 3 months, I peppered GECRB with letters and phone calls trying to solve the mystery of why "identity" issues caused them to deny the MasterCard while, at the same time, approving two other cards without a similar issue.  And their replies to me didn't come close to solving the mystery.  They sent me one final letter on April 4th, standing by their odd denial reason.

I'm 63 years old, living on a pension and Social Security with a total annual gross income of $31,524.  And when I discussed my denial with friends, they suggested to me that certain credit issuers (or their co-branded partners) give cryptic denials like that because they have unwritten policies to not give credit to people without income from "employment" (ie., retirees, elderly people).  In short, they suggested that I might be the victim of a subtle form of age discrimination.  These are just the opinions of similarly-aged friends, however, and may have no basis in fact.

In any case, I decided to forget the PayPal/GECRB application and "move on" - using the "spit-wad" approach to credit acquisition (grin) ... that if you throw enough spit-wads at a wall, some of them will stick.  So, I submitted a "flurry" of applications for different cards.  Applications are still pending for a Chase Freedom card (VISA), a Chrysler MasterCard, and a Capital One MasterCard.  But (grin), two of the spit-wads stuck immediately.  In the last few days, I received a Slate VISA card from Chase Bank ($3,000 credit limit) and an approval for a Diamond Preferred MasterCard from CitiBank ($3,500 credit limit) that should be arriving no later than next week.

My current Equifax credit score is 725.  But, I'm sure my flurry of applications will bring that down a bit.  However, the reason for the "flurry" is because I plan on moving later this year.  And everyone knows that if you want credit, applying "before" a move is easier than "after" a move.  I'm certain my score will take another dive after I do.  But I'm hoping that, with proper utilization of credit, my score will be back up to the high 700s (at least) by the end of 2015.

P.S.  By "proper utilization," I mean this.  It's my intention to charge "something" to each card at least once a month ... but only for things I'd normally pay cash for (or use a debit card).  And each billing period for each card, I'll pay off the balances in full.  This will require card issuers to issue "glowing" reports on my utilization once monthly.  So, by the end of next year, I'll have an over-\2-year record of good credit with the first VISA card (became unsecured on April 1st as promised) and an over-1-year of good credit on the others.

Top Contributor

Reply by
jloes

150 Contributions
32 People Helped
Helpful to 0 out of 2 people

Get your credit cleaned with the help of a reliable personnel Fico and Ex Transunion agent! He's tested and trusted. I had a very low credit score (around 520) and it was ruining my life. I needed help. I was very depressed because of it and had been trying to repair it but It just seems nothing was capable of getting my score raised quickly. I needed something done fast. I had read a lot of good things about this hacker online which gave me a go ahead to try him out. I almost gave up my search for a real agent because I kept meeting fake people who are not capable enough and who are always after the money, I've been conned by them. this programmer is not about the money but about attaining a good reputation at always satisfying his customers. My credit score is now 780, 790 and 820 on all big 3 bureaus and it was 100% confirmed by FICO. This is my way of showing appreciation for a job well done on my credit report. Reach out to him for help at yatesnovakovic @ g m a i l . c o m  He's affordable and always at your service. 

Top Contributor
22 Contributions
84 People Helped

Something else you can do

Helpful to 40 out of 45 people

Some banks help you jump into the "secured" card faster, if besides what you are doing right now, you use your credit card a little bit more (i.e. that instead of having a single purchase of $25 in your statement, you have several purchases and payments, let's say $400 in purchases and $375 in payments). So, when they check this information they not only will try to secure your card faster, but it is more probable that they will offer you an increase in your credit line.

Reply by
darceldidit

1 Contribution
9 People Helped
Helpful to 9 out of 10 people

Thank you, I have been doing just what you are talking about, and I was wondering wether that was a good game plan. It is, Thanks

1 Contribution
31 People Helped

So Helpful

Helpful to 31 out of 36 people

Needed this very much.

Top Contributor

Reply by
jloes

150 Contributions
32 People Helped
Helpful to 0 out of 1 people

Get your credit cleaned with the help of a reliable personnel Fico and Ex Transunion agent! He's tested and trusted. I had a very low credit score (around 520) and it was ruining my life. I needed help. I was very depressed because of it and had been trying to repair it but It just seems nothing was capable of getting my score raised quickly. I needed something done fast. I had read a lot of good things about this hacker online which gave me a go ahead to try him out. I almost gave up my search for a real agent because I kept meeting fake people who are not capable enough and who are always after the money, I've been conned by them. this programmer is not about the money but about attaining a good reputation at always satisfying his customers. My credit score is now 780, 790 and 820 on all big 3 bureaus and it was 100% confirmed by FICO. This is my way of showing appreciation for a job well done on my credit report. Reach out to him for help at yatesnovakovic @ g m a i l . c o m  He's affordable and always at your service.  

Top Contributor
19284 Contributions
5332 People Helped

Good Job!!

Helpful to 16 out of 20 people

While you MIGHT not be able to buy a house in 6 months (lots of factors go into okaying a mortgage) you are at least on the way by careful use of and judicious payment of the credit card, which is building your credit score.  Keep it up!!!

7 Contributions
12 People Helped

Statememt Cycle

Helpful to 9 out of 11 people

How do you know when your cycle is? I know my payments are DUE on the 26th of the month, but how do I figure out when I can pay it off without paying interest?

Top Contributor

Reply by
EddyTX

2662 Contributions
4186 People Helped
Helpful to 21 out of 23 people

you typically have 21 days to make your payment from the end of the cycle. i.e. statement closed on the 5th. 

to make sure my payment is always on time, I have e-bill sent to my Ebanking accout. I have it set up to pay the minimum payment 5 days before the due date.

generally i will go in and schedule another payment so i can pay more of the balance off.  But if you don't at least the min payment will be paid and you won't incur any late fees or have a missed payment.

another good idea is to use the card only for things you will be paying cash for anyway, Gas, Electric bill cable tv etc.  you already have this in your budget to spend so you are using the card to spend money you were going to spend anyway.

Top Contributor

Reply by
TaylorP61

14 Contributions
20 People Helped
Helpful to 0 out of 1 people

Enter Your ReplyContact the Issuer of the Card. there is a Telephone Number on your Card or statement

Top Contributor

Reply by
jloes

150 Contributions
32 People Helped
Helpful to 0 out of 1 people

Get your credit cleaned with the help of a reliable personnel Fico and Ex Transunion agent! He's tested and trusted. I had a very low credit score (around 520) and it was ruining my life. I needed help. I was very depressed because of it and had been trying to repair it but It just seems nothing was capable of getting my score raised quickly. I needed something done fast. I had read a lot of good things about this hacker online which gave me a go ahead to try him out. I almost gave up my search for a real agent because I kept meeting fake people who are not capable enough and who are always after the money, I've been conned by them. this programmer is not about the money but about attaining a good reputation at always satisfying his customers. My credit score is now 780, 790 and 820 on all big 3 bureaus and it was 100% confirmed by FICO. This is my way of showing appreciation for a job well done on my credit report. Reach out to him for help at yatesnovakovic @ g m a i l . c o m  He's affordable and always at your service.  

Top Contributor
27 Contributions
116 People Helped

Helpful to 1 out of 1 people

Everyone states Capital One is the best company to go with but unfortunately for me, I don't qualify because when I filed a BK they were included in the list of discharged accounts :(  so needless to say I can't go that route.. Can anyone recommend 2nd best on the list of secured card financial institutions?

Top Contributor

Reply by
jloes

150 Contributions
32 People Helped
Helpful to 0 out of 2 people

Get your credit cleaned with the help of a reliable personnel Fico and Ex Transunion agent! He's tested and trusted. I had a very low credit score (around 520) and it was ruining my life. I needed help. I was very depressed because of it and had been trying to repair it but It just seems nothing was capable of getting my score raised quickly. I needed something done fast. I had read a lot of good things about this hacker online which gave me a go ahead to try him out. I almost gave up my search for a real agent because I kept meeting fake people who are not capable enough and who are always after the money, I've been conned by them. this programmer is not about the money but about attaining a good reputation at always satisfying his customers. My credit score is now 780, 790 and 820 on all big 3 bureaus and it was 100% confirmed by FICO. This is my way of showing appreciation for a job well done on my credit report. Reach out to him for help at yatesnovakovic @ g m a i l . c o m  He's affordable and always at your service.  

4 Contributions
27 People Helped

Me too!

Helpful to 1 out of 1 people

I did the same time. Opened 3 secured cards with $1100 a/c. I'd charge daily expenses but made sure come the 12-14th of the month, there was only 10-15%. After 6 mon. Capital One gave me a credit increase to $1200 and my credit score has risen 100pts (confirmed w. other sites). 

Top Contributor

Reply by
jloes

150 Contributions
32 People Helped
Helpful to 0 out of 1 people

Get your credit cleaned with the help of a reliable personnel Fico and Ex Transunion agent! He's tested and trusted. I had a very low credit score (around 520) and it was ruining my life. I needed help. I was very depressed because of it and had been trying to repair it but It just seems nothing was capable of getting my score raised quickly. I needed something done fast. I had read a lot of good things about this hacker online which gave me a go ahead to try him out. I almost gave up my search for a real agent because I kept meeting fake people who are not capable enough and who are always after the money, I've been conned by them. this programmer is not about the money but about attaining a good reputation at always satisfying his customers. My credit score is now 780, 790 and 820 on all big 3 bureaus and it was 100% confirmed by FICO. This is my way of showing appreciation for a job well done on my credit report. Reach out to him for help at yatesnovakovic @ g m a i l . c o m  He's affordable and always at your service.  

5 Contributions
119 People Helped

Helpful to 2 out of 2 people

you are exactly right!! I have blogged about this on this forum before, I will say that i started to rebuild my credit with a secured card about two years ago .I chose capital one and it has been the smartest move I have ever made.After  6 months they gave me a $100 increase and after a year and a half they have in total given me a $500 increase! I have also gone on to apply for other cards and been approved!! And it all began with my secured card and responsible usage!!!! Good luck to you on your journey to good cedit health!

Top Contributor

Reply by
sgar1973

27 Contributions
116 People Helped
Helpful to 2 out of 2 people

I have one more question. I too have secured cards, and my concern is.. what happens after you've accomplished getting unsecured credit cards with better interest rate? Do you just let the money sit in those "secured" credit cards or how do we reclaim the money? do I close down the secured cards? Can anyone tell me what's the best approach?

Thanks :)

Top Contributor
53 Contributions
1391 People Helped

Helpful to 1 out of 1 people

Oops (grin).  In my earlier response, 2nd paragraph, I said I applied for 3 other cards.  It was 4 actually.

Top Contributor

Reply by
jloes

150 Contributions
32 People Helped
Helpful to 0 out of 1 people

Get your credit cleaned with the help of a reliable personnel Fico and Ex Transunion agent! He's tested and trusted. I had a very low credit score (around 520) and it was ruining my life. I needed help. I was very depressed because of it and had been trying to repair it but It just seems nothing was capable of getting my score raised quickly. I needed something done fast. I had read a lot of good things about this hacker online which gave me a go ahead to try him out. I almost gave up my search for a real agent because I kept meeting fake people who are not capable enough and who are always after the money, I've been conned by them. this programmer is not about the money but about attaining a good reputation at always satisfying his customers. My credit score is now 780, 790 and 820 on all big 3 bureaus and it was 100% confirmed by FICO. This is my way of showing appreciation for a job well done on my credit report. Reach out to him for help at yatesnovakovic @ g m a i l . c o m  He's affordable and always at your service.  

1 Contribution
13 People Helped

Don't need a balance

Helpful to 13 out of 24 people

I have yet to carry a balance in the 2+ years of having CCs and according to CK my score is at 745. When I did my research I read that your balance isn't reported to the Bureaus, so it's optional to have a balance. 

Reply by
fishywishy008

1 Contribution
16 People Helped
Helpful to 16 out of 16 people

BlueL - it's great that you do not carry a balance on your cards. I just wanted to clarify that credit companies actually do report your balance to the credit bureaus each month. The balance reported is based on whatever date your specific credit company chooses to report....it is not necessarily the balance you see on your monthly statement. The best thing is to ask your credit card company what date they report balances each month. :)

Top Contributor

Reply by
bluedog2384

14 Contributions
575 People Helped
Helpful to 4 out of 7 people

As a comment to BlueL you can also check the date CC companies report to the credit bureaus by checking info on CreditKarma.   If you double click on individual accounts, it will bring up additional info such as date acct was opened and date balance was last reported to the bureaus.

Top Contributor

Reply by
FirmAndSteady

52 Contributions
202 People Helped
Helpful to 3 out of 3 people

Balances are definitely reported.  Whatever your due date is, the balance will be reported a few days afterwards.  If you pay at least your amount due by the due date, you will be safe for the reporting or "Statement Date"  That is the the one reported to the bureaus.

Here are some examples:  Capital One reports about THREE days after due date.  Chase reports about THREE days after due date.  American Express reports about SIX days after due date.  Discover reports about FIVE days after the due date.  The others are very similiarly reported.  So, to be on the safe side, figure that the balance you will be carrying after your "due Date" will be the one reported to the credit bureaus.

3 Contributions
2 People Helped

Improving credit report card

Helpful to 1 out of 1 people

I have five credit cards, ThreI have five credit cards, Three of them have zero balances and not being utilized should i canceled them ?

Reply by
lauralt8

4 Contributions
27 People Helped
Helpful to 2 out of 2 people

Never cancel a credit card if you can help it. The decrease in available credit and length of accourts will take a hit. Even if you don't use them. 

Top Contributor
10 Contributions
65 People Helped

Helpful to 1 out of 2 people

Oops, I did it wrowng last month, no wonder this didn't work lol. I read it wrong and purchased something on the 3rd so I'd have something on there by the 5th. Guess my real rebuilding starts next month, as all I've done so far is lower my credit history length (by about half because of the new card) lol. Oh well, live and learn :D Thanks ya'll for the replies. 

1 Contribution
0 People Helped

determine when to use your card

my billing cycle is the 11th - 12th and my due date is the 8th. If I use my card on the 10th of January and pay it on the 4th of Febuary doe that work?

Top Contributor

Reply by
EddyTX

2662 Contributions
4186 People Helped
Helpful to 8 out of 8 people

REALITY CHECK!  you may be able to figure out the cycles that you cards use to report to the CB's but don't depend on it as a way of calculating when your score will change.

For instance, I have 1 card that only reports once every 2 months or so and never on the same day. another only reports when i have a balance due over $1000. then doesn't report again until its at zero.  but then all the past months unreported will be updated at the same time.

Also realize that almost every financial institution uses a different algerithium to figure out you score. So what affects one score may not another.

As a rule of thumb, use your card wisely, keep your utilization low and pay on time and your score will go up.  it just takes time.

1 Contribution
0 People Helped

I was able to get a new credit card without it needing to be secured.. Then noticed my credit score dropped by -13.. Why did this happen ?

Reply by
BillionersHunter

6 Contributions
13 People Helped
Helpful to 7 out of 9 people

there is an equation. to raise your score only charge 33% of your limt. no matter how low. ex. visa $300 limit. charge $100 a month.{no less) pay on time and full. 45-60 + to score.

Top Contributor

Reply by
bybridges

32 Contributions
30 People Helped
Helpful to 0 out of 1 people

Scores tend to drop right after you apply for a credit card once the credit card company does a hard pull on your credit. It'll recover in several weeks if you continue to remain in good standing. 

1 Contribution
0 People Helped

I have the same problem, I have no credit history which is why my credit is soo poor, but just to get a better understaning of the subject, I have a 200 credit limit secured credit card i opened 2 months ago and I have ran into probalems where I have to use mostly all the 200 is that hurting me even if i pay my balance in full when the bill comes? should i pay my balance as i go spending it ? and just make sure i have a low balance at the end of the month ? 

1 Contribution
0 People Helped

Could you help me understand better? MY credit card is due on the 27th of each month the 6th is my statment cycle? if I understand.So when Do i pay off my credit card and how much %?

Top Contributor
227 Contributions
105 People Helped

Helpful to 1 out of 2 people

you guys are making this more difficult than it really is. the balance at the end of your billing statement is what is reported. pay it off and make sure your payment has enough time to clear before the end of the billing cycle, and they will report a zero balance with positive payment history. that's it. if you don't believe that, check the balanaces on your credit report against the balance on your last billing statement. they will match (keep in mind if your statement just closed, check your last statement since reporting is usually 2-4 weeks lagging behind). 

1 Contribution
0 People Helped

How to

I want to try this but I'm a little confused. I have a$500 limit my due date is the 4th of the month. If I spend $50, where do I go from there? 

Reply by
l9529

3 Contributions
0 People Helped

You want to have less than 30% of that $500 in use (always less than $150). You can spend what you want, but keep that number under 30% usage of your total credit limit. 

You'll get charged interest if you carry a balance from month to month... you need to use the card, but wait until the statement is issued (and your useage is reported to the credit reporting comps) before you pay it off in full. If you pay it off in full.. you shouldn't be charged any interest.

9 Contributions
330 People Helped

$2200 Credit Limit Increase in 5 Months

Credit Karma showed my score as 624/618 respectively for Transunion and Equifax in early September 2015. I applied for and received a secured card from Capital One and a few days later I again applied to Capital One and was approved for an unsecured Quicksilver Card with a $300 limit.

I used both cards, paying both in full at various times throughout the month. Some months I showed a balance due on my statement, other months I had a zero balance. Some months I used over 50% available limit and even showed over 50% of the limit on the statement a couple times. I paid zero interest on either card always paying in full, sometimes making a payment more than once a month.

My scores now stand at 641/635 and it has been 5 months since approval for the Capital One Cards.

I requested a limit increase on the unsecured card and instantly received a $500 increase making my credit limit $800 on that card. I then requested an increase on the secured card and was denied due to lack of time the account has been opened.

A day or two later I was checking my score here on Credit Karma and decided to check out other cards. I am a Veteran so I applied for a USAA unsecured card and was denied but was approved for a secured card. I figured I was going to take a slight hit on my score for the inquiry so I accepted the secured card.

I also applied for a Discover it Card and was denied for the offer with all the great incentives but given the option to apply for a secondary offer. My jaw almost hit my laptop when I was then approved with no annual fee and a credit limit of $1200. A few days later I get the card in one of the most professional looking packages I have ever seen. The website is beautiful and easy to navigate. 

A week goes by and last night while checking my Capital One accounts I notice my limit on the unsecured card was raised again another $500 so now it has a limit of $1300. A few hours later I received an email informing me of the increase. 

Credit card companies get paid every time you use their card so they like to see usuage and a lot of it. I am not sure anyone can prove exactly what they look for (other than the obvious late payments, collections, etc.) when evaluating your credit worthiness as it appears they look at everyone differently. Some use Transunion, some Equifax and others use Experian. 

Your credit score will fluctuate depending on the percentage of your available credit you have used. While your number may be down this month you can get it back up by paying off your balances. I wouldn't give myself a headache trying to figure out when this one reports or that one, just keep them all paid off in full every month if possible. 

I think the trick is to appear you don't need the credit and you will get more of it. Try to make it appear as though your cards are used out of convience more than necessity. Once you get a couple of cards from different companies they should began to compete for your business.

1 Contribution
0 People Helped

Good Advice

Very useful, thank you. I also verified this at another site. Showing a balance on the statement is key. I use my CapitalOne secured cards for gas because it's money I was going to spend anyways.  I will now wait until the statement is generated before paying them off.

Credit Karma Team
9 Contributions
0 People Helped

Building Credit Health

Hi peregrine247,

Building financial health can take some time and requires making some smart decisions. This article might be helpful for you or others who are trying create a better financial future.

https://www.creditkarma.com/advice/i/build-solid-financial-foundation/

Top Contributor
26 Contributions
56 People Helped

Perfect!

This is exactly how you do it. It's so hard to explain this to people. Carry a balance less than 10% but once you get the bill pay it all off. You never need to pay interest to have a great credit score. And if you get a card that give you cash back they will give you money to use their card! I get hundreds a year from Discover card.

Top Contributor
10 Contributions
65 People Helped

Helpful to 0 out of 1 people

I'm confused, so I would pay after the new statement. If it's due on the 19th (for example) pay it on the first day of the new statement?

Reply by
Frostacious

4 Contributions
30 People Helped
Helpful to 14 out of 14 people

They were stating that if a cycle is from Jan. 4 to Feb. 5, thats one cycle and payment is due for that cycle after it ends on the every 15th of the month.  So what they are doing is paying it off before the 15th.  With me so far?  Now the kicker is they use the card again before the 15th to bring back a charge. So in the eyes of the bank your carrying a charge from month to month, but your also making your payments as well no aquiring any interest!

Hope this helps.

Top Contributor
10 Contributions
65 People Helped

Helpful to 0 out of 1 people

I e-mailed Capital One securely on their website so I'd have documentation about when my dates were. I was told my DUE date is the 2nd of the month and my BILLING CYCLE is the 5th of the month. If I wanted to use your findings myself, would I have to change my due date? 

Results 1-25 of 30Results per page: 5 | 10 | 25Page 1 of 2   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.