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Does my strategy for increasing my credit score check out?


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My new strategy for increasing my credit score is to use 2 secured credit cards for my expenses though-out the month and use my checking account to pay for the cards when the due date comes. I want to stop using cash and use credit, so it can grow! Now, i’m getting stuck on when to 

 

1. actually use my cards during the month

2. whens the best optimal time to pay back

 

from my understandings i need to pay when i have a balance due (Due date is the 18th) and not the current balance, so that they can see i’m using my card, is that right? Or pay when the new statement comes out (21st of each month is when I get a new statement in my bank app). I just don’t want to be spinning my wheels thinking i’m doing this right, and my credit remains to same, i’m trying to get this new house ya’ll. Also i hear that some people pay multiple times throughout the month why is that, and the benefit? 

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There algorithms will know whether the card is used.  Having only two cards makes life difficult when it comes to maxing scores though.

 

You will want to ensure one reports with a zero balance and you will want the other to report with a minimal balance.  This means not only the closing balance from the prior month being paid but also an amount close to paying everything in full a day or two prior to the closing date.  You will learn within a few months how many days there are between the due date and the closing date.  And, of course, it will take a few cycles to see when they tend to report balances to the bureaus.

 

As quickly as possible, get good cards so you don't get stuck with just a few secured offerings. 

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4 hours ago, c0moneyman said:

@centex so don’t add another secured card? and when is the best time to pay when I have a balance that’s due or when my statement is updated?

For the card that you want to report a zero balance pay it on the statement due date then do not use it for the few days until the new statement drops.  Once you get the statement showing a zero balance:  charge away.  For the card reporting a small balance pay it by the due date and keep a small balance (less than $25) and do the same thing:  do not charge for the few days until the statement drops showing the small balance.  If you need to make "room" to use it more you can do additional payments during the month to do free up space so to speak.  

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There are really a couple of different matters here.

 

1) How a credit card account works.

 

Each statement will have a statement balance ($353.43 in this example).

 

gE94lvU.png

 

If you always pay this amount by the due date (6/16/21 in this example), beginning with the first statement, your account will always be current.

 

You'll also never pay interest (unless you have certain bottom feeder cards from fringe issuers who specialize in deep subprime customers).  

 

2) Maximizing your FICO scores.

 

- 5 open positive revolvers (major credit cards) is optimal; more is fine.

- Exactly one card with a small balance is optimal, and it goes down from there.

 

 It's really more important that you completely understand how your account works before you look at optimizing your scores (at least if you're like me and have trouble focusing on two things at once).

 

Are you new to credit, or do you have a history of bad credit?  In the latter case, the impact of optimizing how your account balances impact your scores will be much less pronounced.

 

 

Edited by cv91915
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@cv91915 Now that’s what i needed, great example! That helped me understand that credit game a lil hit more, and yes I do have a stain on my credit, something that went to collections that i paid off and i’m looking in the future to get it removed since i paid it off.

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13 hours ago, cv91915 said:

There are really a couple of different matters here.

 

1) How a credit card account works.

 

Each statement will have a statement balance ($353.43 in this example).

 

gE94lvU.png

 

If you always pay this amount by the due date (6/16/21 in this example), beginning with the first statement, your account will always be current.

 

You'll also never pay interest (unless you have certain bottom feeder cards from fringe issuers who specialize in deep subprime customers).  

 

2) Maximizing your FICO scores.

 

- 5 open positive revolvers (major credit cards) is optimal; more is fine.

- Exactly one card with a small balance is optimal, and it goes down from there.

 

 It's really more important that you completely understand how your account works before you look at optimizing your scores (at least if you're like me and have trouble focusing on two things at once).

 

Are you new to credit, or do you have a history of bad credit?  In the latter case, the impact of optimizing how your account balances impact your scores will be much less pronounced.

So I currently have 5 Unsecured CCs (3 New this month) , 1 Secured CC, 4 Unsecured Store Cards. Would using 3%-9% of the balance every month and paying them off in full every month for like 2 years increase my score tremendously?

 

I have 1 Charge Off that I am disputing to due to it be inaccurate. This only appears on my EX & TU Credit Reports.

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5 hours ago, moonpirate said:

So I currently have 5 Unsecured CCs (3 New this month) , 1 Secured CC, 4 Unsecured Store Cards. Would using 3%-9% of the balance every month and paying them off in full every month for like 2 years increase my score tremendously?

 

I have 1 Charge Off that I am disputing to due to it be inaccurate. This only appears on my EX & TU Credit Reports.

As long as the charge-off is still being reported, there will be obstacles to progress, which will prevent your score from progressing. A charge-off is a major derogatory.

 

When both negative and positive tradelines are reported, at the same time, your score will not increase significantly, and you need to get rid of these negative effects, which hinders your score forward.

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4 hours ago, MP80 said:

As long as the charge-off is still being reported, there will be obstacles to progress, which will prevent your score from progressing. A charge-off is a major derogatory.

 

When both negative and positive tradelines are reported, at the same time, your score will not increase significantly, and you need to get rid of these negative effects, which hinders your score forward.

I will get them off soon! My EQ is clean in and this past Feb my score was at 775 FICO8! I thought getting that high would be challenging but it was done with just following this method I mentioned before. I'm actually going to do 7% instead of 9% after this video I just watched. My EX has been raising since opening cards recently. It seems each CB measures things differently.

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5 hours ago, moonpirate said:

So I currently have 5 Unsecured CCs (3 New this month) , 1 Secured CC, 4 Unsecured Store Cards. Would using 3%-9% of the balance every month and paying them off in full every month for like 2 years increase my score tremendously?

 

I have 1 Charge Off that I am disputing to due to it be inaccurate. This only appears on my EX & TU Credit Reports.

 

Past balances aren't factored into your credit scores. The main things you want to do are

  1. Pay at least the minimum due every single month. No late payments ever.
  2. Use each account once a year so it isn't closed for inactivity

That's the minimum you need to do. However best strategy is to be on top of your finances. Don't put things on credit you couldn't pay off in full right away and pay the full statement balance so you don't get charged interest. If you follow that then it's just a matter of adjusting when you make that payment to boost your credit scores.

 

And if you just got 3 credit cards take it slow. You have more than enough for great scores. Work on credit limit increases for now and when you apply for cards in the future make sure they're decent cards. Don't just apply for more to fluff your credit scores --  with 10 cards it's not going to help scores, but letting 51%+ might help a little.

 

 

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4 hours ago, chrishillson said:

 

Past balances aren't factored into your credit scores. The main things you want to do are

  1. Pay at least the minimum due every single month. No late payments ever.
  2. Use each account once a year so it isn't closed for inactivity

That's the minimum you need to do. However best strategy is to be on top of your finances. Don't put things on credit you couldn't pay off in full right away and pay the full statement balance so you don't get charged interest. If you follow that then it's just a matter of adjusting when you make that payment to boost your credit scores.

 

And if you just got 3 credit cards take it slow. You have more than enough for great scores. Work on credit limit increases for now and when you apply for cards in the future make sure they're decent cards. Don't just apply for more to fluff your credit scores --  with 10 cards it's not going to help scores, but letting 51%+ might help a little.

 

 

I applied for 5 this year after being in the Garden for 2 Years. 4 of them pulled my clean EQ CR which got me decent limits:

$1,500 Amazon Synchrony Bank (Pulled my TU with a Chargeoff)

$7,000 Citi Bank Double Cash

$15,000 AODFCU Visa Signature

I was declined via PenFed but I am going to do a recon. I'm currently waiting for a supervisor to call me back.

$900 Target RedCard

 

My other TLs that I aged for about 2 years are:
$1300

$800 - PayPal Credit (Requested CLI from $500 to $10,000 and got increased to $800)

$500 - BOA BankAmericard (Secured -> Unsecured)

$300 - eBay Mastercard

 

I'm still confused about when I should pay my bill. I just got the dates from my Experian CR of when the balances are updated but I am still a bit unsure of when to pay. I just opened up a Stripe account to put my CC Charges on autopilot. I am charging 7% of balance to my CCs besides my $15,000 AODFCU Card since it has the best benefits. I'll be spending around $15-$20 a month to keep it on autopilot with the 2.9% Fee + 30 Cents but I think it'll be worth it in the long run.

Edited by moonpirate
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