Credit rating.. HELP?

Question

I'm 18 and have had a credit card since i was 16. To my luck i got one, I grew up in a shitty neighborhood with little money in my home. Anyway, I have owed my credit company for a lil bit now, money that i cant really pay off all at once. I owe under $500 & about every month drop $20 or $30bucks when i have it. Can anyone tell me if my credit could be bad because of this? And also if I one day drop in and pay off 100% whats due will this bring my credit back to perfect? PLEASE HELP!

Answer 1

As long as you are making at least the minimum payment, or more, every month, and making the payments on time, that aspect won't hurt your credit.

If you pay late, your credit will suffer. Late payments are a major score killer.
Lates will remain on your credit report for 7 years from the time you were late.

Another major score killer is utilization.
If you have no other cards or loans, and if you are at 50% or more on the utilization with that card, it will hurt. Try to keep your overall utilization below 30%

If you had ever gone overlimit on the card, that will hurt your scores.
It will also show on your reports that you had a higher balance than what your credit limit is. Credit lenders will notice it.

If you have always made payments on time, never over limit and your utilization looks good - making monthly payments instead of paying it off all at once "will not" hurt your scores.
The only thing that will hurt is paying the interest.

Answer 2

You say you drop in $20 - $30 bucks when you can but this is not really how finances are managed. You have to give them the money - when they send you your bill.

Do you know what your minimum monthly balance is? Instead of paying when you can - you need to pay consistently based on your minimum balance. Always try to pay more than the minimum too.

With that said, you can get a free credit report from the federal government that will give you credit information. You can see if the credit card company has been reporting you to the credit bureaus as delinquent.

If you pay the entire balance of, it won't hurt but it won't raise your credit score 100 points either. Your credit history is just that "history" so eventually you credit score will go up but not the instant you pay off the entire debt. It takes time.

I hope this helps. You are smart for thinking about the future now.

Answer 3

One of the biggest misconceptions people have about credit scores, is that they think simply having debt hurts yuor credit score. Normally this is not the case unless you are maxxed out on your cards. Typically the people with the best credit scores will always hold some debt, or at least have been in debt at some point in their lives. The most important thing is always making your payments ontime. That is the real backbone of your credit score.