John asks…
How high can my credit score climb if I have only credit cards in my credit history?
My current credit score is 745 and I’ve built it solely by using credit cards and paying on time (but never had any loans). Somebody told me that the abscence of installement-paid loan will prevent my score from climbing much higher. Is it true? Should I take some consumer loan to boost my credit score since I am planning to apply for a mortgage in the near future?
answers:
You don’t need an installment loan. More often than not, they pull you DOWN. Who told you that?
Betty asks…
How come my credit score was Zero after Bankruptcy Discharge & how can i build my credit?
I filed bankruptcy in 2008 and discharged same year. My Credit Score is still Zero, How can i rebuild my credit score again. I got a 2 secured credit cards, 1 from USBank and the other from Golden1 Credit Union.
answers:
Go to your bank and ask them about a secured card.
Make sure it reports to the credit bureaus – and you replace the money in full each month.
Ask to see if this card will turn into a credit card after a year even with a bankruptcy on file.
That is your best hope to rebuild credit.
Once it turns into a credit card – remember to pay in full each month.
Not the minimum, not close to the minimum, but the entire balance – no games.
Carrying balances can destroy credit and in some cases ruin lives.
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Mary asks…
How do you lower your credit limit without lowering your overall credit score?
I have only have one revolving credit card, and I have a very high credit score. Because of this overall score they subsequently increase my credit line, even though I don’t ask for or use this revolving line of credit. Question? I have been told if you ask for a credit line decrease they lower your overall credit score? Why? What can you do to minimize a lowered credit score?
answers:
Your talking about your debt to credit ratio which makes up 30% of your overall score.
If your balance is really low and your new credit limit reflects no more then 30% usage, your score will not be affected.
If however your new limit makes your debt to credit ratio over 30% your score will take a hit.
There is nothing wrong with having a high limit as a matter of fact it’s good since it makes it hard to exceed 30%.
It’s not the credit you have that matters it’s how you manage it that counts.
Joseph asks…
How does credit utilization work for credit score?
I’ve heard you should keep the credit ratio for each card at 20% or below. If I have $600 credit limit and I spent about $180 on the card, which is 30%, will this affect my credit score if I pay it off the next day? Do the credit bureaus count credit utilization as credit balance carried over for that period or whenever you use that much credit limit even if you pay it off asap without carrying a balance?
answers:
If you carry balances on your credit cards of more than 30% of your limit (debt to limit ratio), you hurt your score. Pay off the balance and your score rebounds. If you pay your balance in full every month, this makes no difference.
Utilization is not the same as the debt to limit ratio. Yes, utilization does impact your score. However, it REALLY is not worth the effort to figure out exactly when when the credit card will report to each of the three credit bureaus and then schedule charges and payments to get the perfect utilization rate for the best score. By the way, the perfect utilization rate is a lot more than 30%.
You should also not make payments immediately after making the charge. Wait for the statement and then pay the balance in full. Credit card companies only report once a month. Whatever shows on your account at that time is what gets reported. If you immedately pay after making charges, you are likelyl to show no utilization at all.
Basically, don’t over think it and don’t worry about all the extremes for a point here or there. Utilization all evens out over time. Just use the card for regular purchases, wait for the statement, and pay the balance in full. You will build good credit history and avoid interest.
By the way, the fastest way to get a limit increase is to use 70%+ of your limit and pay in full every month for abotu 9 months.
Helen asks…
How to raise my credit score once my credit cards are paid off?
How can I continue to raise my credit score once both of my credit cards have been paid off?I don’t plan on using either one of them unless its an emergency,but I don’t know how to keep getting my score to go up after that.Is there a way to get negative reports taken off my credit report?
answers:
Negative reports will only be taken off your report once enough time has passes. In the meantime you have to demonstrate that you can use credit responsibly, so not using your cards isn’t going to help you. What you need to do is find some small to reasonable purchases you were going to make anyways (like groceries, or gas) and use your card and pay it off in full each month and on time. Don’t spend more than 30% of your limit on any card and like I said – make sure you pay it off on time. If you pay the full amount each month you won’t be charged any interest, so it’s not going to cost you any money to do this.
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