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Question By
peregrine247

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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!

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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

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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. :)

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Reply by
bluedog2384

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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.

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Reply by
FirmAndSteady

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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.

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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

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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. 

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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. 

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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?

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Reply by
EddyTX

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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.

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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

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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.

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Reply by
bybridges

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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. 

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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 ? 

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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 %?

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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). 

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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

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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.

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$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.

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