Yes, the limit is $600, so I know I can go up to that amount each billing cycle. However, I've been told that a low debt to balance ratio looks good and that you should never go over 1/3 of the cards limit because it looks like you're spending just to spend. On the other hand, I've heard that you shouldnt spend too little either. The lady at my credit union says that my spending history looks good and I'm on the right track and my credit score is increasing. What exactly increases my credit score and how can I make it go up faster? How do I know what spending range to stay in on my card?
2007-01-29 07:50:49 · 8 answers · asked by Anonymous in Business & Finance ➔ Credit
It doesn't matter one bit how much you spend during a business cycle. Pay it off every month no matter what. Some people seem to think that if you keep a balance it will help raise your score. Don't listen to them. Why would you pay interest when you don't have to? If you pay off your bill every month on time you will have a stellar credit score in a few years. Personally, I would suggest spending around $500 per month (basically just close to your limit) and pay it off. Or better yet spend $500, pay it off mid-month and then keep going. This will indicate to the bank that you are a timely payer and need more credit. After some time, they will raise your credit to attempt to entice you to carry a balance. It's a whole risk/reward equation they run. Higher credit limits will help to raise your credit score. Eventually, you will not want a card that has less than a $10,000 limit, anything below actually reduces your score. No matter what, just pay it all off on time and don't worry about it. In the long run you will be fine.
2007-01-29 12:42:43 · answer #1 · answered by zchamilton 1 · 0⤊ 0⤋
You are right. Don't go over 1/3, and 1/6 might be better. Also don't pay it off every month. If you leave a little on it (not much or the finance charges will add up) then your credit report will show that you are responsible enough to handle revolving credit. I don't know why but, the f'd up credit bureaus don't give you points for paying off your card every month. I think it's a conspiracy myself. But anyway, you sound like you know what you're doing.
2007-01-29 07:56:37 · answer #2 · answered by crazylifer 3 · 1⤊ 0⤋
1/3rd credit line to balance carried ratio is ideal, within a few percentage points. It makes you look like you're in control of your finances and understand how credit works. The length of credit history, the credit line to balance ratio, and payment history all make up your credit score.
Rocky S, you're lucky enough that what is called "revolving credit" didn't bite you in the ***. No one here wants this guy to have a bad credit score. Please read http://bankrate.com/brm/news/cc/20061114_cancel_card_credit_scorea.asp for further information on how your credit score is calculated.
2007-01-29 07:55:08 · answer #3 · answered by sovereign_carrie 5 · 0⤊ 0⤋
If you don't pay off the balance each month down to zero, try to spend less than half the limit if you use it on a regular basis. (A one-off for one big purchase here and there is okay.)
2007-01-29 08:19:32 · answer #4 · answered by zippythejessi 7 · 0⤊ 0⤋
As long as you make your payments on time all those other answers are BS they want you to use it. I always go over 1/3 and my credit is fantastic.
2007-01-29 08:01:45 · answer #5 · answered by ? 6 · 0⤊ 1⤋
295
2007-01-29 07:55:02 · answer #6 · answered by Nora 7 · 0⤊ 1⤋
Anything up to 90% wont hurt your score too significantly...however anything after 90% utilization will hurt it bad.
But if you can keep it down, the lower the better
2007-01-29 08:45:06 · answer #7 · answered by Anonymous · 0⤊ 0⤋
you should only use 30% of that $600
2007-01-29 08:36:11 · answer #8 · answered by bootieme 1 · 0⤊ 0⤋