If you were given a 200 dollar credit line how would you use that to create big dollar credit?

Question

suggestions ideas?

Answer 1

I am going to assume that you are in the United States and base my answer on our credit practices as I understand them. Since I am a professional Credit Advisor, I believe I understand them rather well.

First of all, do not exceed one-half of your credit limit, EVER! As soon as you exceed one-half of your credit limit by one cent, your FICO score starts to drop. Once your FICO score has dropped to a certain point most credit card companies will increase your interest rate even if you have always paid your bill on time.

Pay ALL of your bills on time, especially those bills that routinely report to the credit bureaus. Credit card companies will periodically check your credit and if they see that there are multiple instances of late payment of failure to pay, they will raise your interest rates. These instances will also delay approval of increased credit.

Keep your active credit card accounts to a minimum. No more than three. If you have more than three your FICO score will drop. Also, credit card companies and any other money lenders will consider you a risk if you have more than three active credit card accounts. This is because the temptation to borrow beyond your means is very great. It is also another excuse for credit card companies to increase your interest rates. Do you see a recurring theme here?

Give it time. Most credit card companies want to see a three year history of payment before they consider increasing your credit limit.

And a word of advice, DO NOT PAY FOR YOUR CREDIT CARD! The headaches caused by these kinds of credit cards will haunt you for many years to come.

If you have any questions regarding your credit issues, please feel free to email me at [e-mail]

Answer 2

One thing to note is if you get a new credit card then immediately take it to a high percentage of your credit limit it can have a negative impact on your credit rating.

Its been a couple years now since my bankruptcy and I finally applied for a credit card. I got one with a $300 limit. I figured it is better to use it so you can show payment history on it so I told the wife to use that for part of her Christmas shopping.

When I first received the card my credit score went up 25 points (boy was I excited). When we put $294 on it my credit went down 34 points.

The reason is when you get new credit and immediately max it out the assumption is you need the credit to live therefore you are a bad risk. I'm hoping paying it off or down to less than 5% of the balance will recover a large part of what I just lost on my credit rating.

Answer 3

I have to admit that I had a lot to say about this but after reading Robert's post I don't think I could have said it better myself. The only thing I would add is that if you open a line of revolving credit, only use it a few times a year and keep a small balance on it a couple of months a year. I have no way of knowing for sure but I have heard that this helps your credit score.

Answer 4

If this is only the beginning credit line than pay your bill on time or before its due and slowly they will increase your limit when they find that you are credit worthy.

Answer 5

ummm use it and pay it on time and eventually if they dont give you a credit line increase you can ask for one...just make sure you pay your card on time!!

Answer 6

I don't really know how to answer this

Answer 7

I think it depends