How to manage a credit card for maximum FICO boost

[casablanca]

Hopefully I've put this in the right forum . I declared BK7 a little over a year ago and have had a devil of a time getting any type of credit since. Recently my CU approved me for a small unsecured credit card, and I would like to know the best way to manage using and paying it to help my FICO score the most so that I can qualify for other credit in the future.

 

I don't need to use it, and honestly I don't even want to use it since credit cards were at the root of the reason I declared BK, but I know that I will have to learn to manage it in order to improve my credit.

 

Any help and advice is very much appreciated.

[eazy_money]

there is relationship between your score and your balance. It's called utilization. It makes up 30% of your score. For best results... The best way to use your new credit card to build credit is to charge just 8% of your limit just once each month, pay in full when you get your statement. allow your payment to post then once again make a small purchase no more than 8% of your credit limit. repeat for the next 24 months.

 

having a small balance is important....

 

Copy and paste from myfico.com (the horses mouth)

 

What matters are the monthly balances that creditors report to the credit bureaus. These balances are weighed against your available credit, and this debt-to-credit-limit ratio, or utilization, makes up about 30 percent of your FICO score, the most widely used scoring formula. If you charge your card to the limit each month but always pay in full, the score will react as if you've maxed out the card. It's all about the reported balances. That said, a tiny reported balance can trump a zero balance. "In short, the lower a consumer's credit utilization, the better, but having a small balance is slightly better than having no balance at all," says Barry Paperno, consumer operations manager for FICO, the Minneapolis-based company that created the popular credit scoring formula. In other words, a teeny charge does a FICO score good. Use the card on an inexpensive item and then pay off the balance when you receive the bill. The small reported balance will help your score, and you'll avoid finance charges at the same time.

 

 

[jolla]

You'd probably get more replies in the Credit Forum. This forum is for discussing optimizing your finances, which isn't always the same as raising your FICO.

[casablanca]

You'd probably get more replies in the Credit Forum. This forum is for discussing optimizing your finances, which isn't always the same as raising your FICO.

 

I reposted it over in the other forum. Thanks for letting me know this wasn't the right place.