how do you pay your credit card to start to raise your credit?

Question

i just got a credit card and im want to start building credit.... i was wondering what would be the best way to build credit.. i have heard i should only take care of the minimum, or something along the lines of that.... but never pay the entire balance.... i need help cause i would like to build my credit the right way.

Answer 1

1. Use the credit card only when absolutely essential. Pay your regular expenses by cash or a debit card. This will help you budget and not go overboard with credit card debt.

2. Follow repayment schedules like religion. Don't miss out and invite late payment fees, increased APR rates and blocked reward programs.

3. Don't stick to the monthly minimum payment. Pay the maximum you can afford and get that outstanding debt cleared as fast as possible. By just paying the monthly minimum the credit card companies reap the maximum rewards while, as a consumer you pay the maximum interest.

4. Get rid of multiple credit cards. Although this might sound difficult, but if you are struggling to repay on time and, juggling with the repayment dates is causing you to default- it's time to think. If there is a genuine need to keep multiple credit cards, then try to automate their monthly payments. This will ensure that you don't default unwillingly and face the negative consequences. Read more from: http://www.credit-card-gallery.com/article/264,5_not_to_miss_things_for_a_good_credit_score

Answer 2

Before you do anything else (besides staying current on this debt) read Total Money Makeover by Dave Ramsey. Borrow it from the library so it doesn't cost you anything. You can also go to his website and listen to his radio show for free online or find out when and where it airs in your area.

At any rate, the only reason you need to "build credit" is to get further into debt. The only thing you should get into debt for is a house where it's payment would be no more than 25% of your monthly take-home pay tops. You can find a bank that will manually underwrite your mortgage rather than being a slave to your FICO score. Churchill mortgage does this but there are many others as well. Just call around.

Do yourself a whopping favor and don't go into debt. It limits your options should any typical 'life occurrences' happen.....like an illness, expensive car repair, lay-offs or other job-loss, getting married, having kids, roof replacement, etc.

Build your wealth instead of credit. Debt doesn't build wealth. Pay cash for everything! You'll spend less every time you buy something. That plastic takes away the emotion of overspending. It's harder to part with cash.

Answer 3

While it's not the worst thing in the world to carry a balance, I can't figure out how it could be a "good" thing. If you have a 0% rate, it's not a big deal to carry a small $600 balance. It won't affect your credit score by more than a few points. Just avoid making late payments on this account and also your utility bills, and your credit score should be in the 700's in no time. Good luck!

Answer 4

You will get more credit if you do not pay off the full balance every month and you will pay extra for that credit. Credit companies WANT people who make regular payments on time. The interest charged (2%/month or more) is where they make their fortunes.

Answer 5

You're nothing without credit? www.daveramsey.com is a GREAT site for financial matters, he's on TONs of show with practical advice.

Dear Dave,
I’m trying to get my wife on board with us getting out of debt, but she tells me that if you don’t have credit you’re nothing. We’re Christians, we make good money – about $75,000 a year – so why does she feel this way? What can I do to help open her eyes?
Jay

Dear Jay,
Lots of people believe the only way to have good things is to have payments attached to them. Many times the only reason for this is that their parents had the same wrong idea about handling money, and it rubbed off on them. You two have a good income, so there’s no reason to have payments on anything except maybe your house.

It may be that she just needs her hope restored. That’s what most people in this country need. But since you’re both Christians, I think there’s a chance to help her and turn this into a great spiritual discussion.

Proverbs 13:12 says “Hope deferred makes the heart sick, but when the desire comes it is a tree of life.” In other words, when you can see something at the end of the tunnel that’s not an oncoming train – something that’s real light and real hope – you get excited. Think about it, Jay. There’s not one place in scripture where God uses debt to bless his people. In fact, the Bible calls debt a curse.

You can always crunch numbers and show someone how to save, budget or pay off debt. But I believe the easiest way to find hope or reach someone’s heart is to think in more spiritual terms.
- Dave

Answer 6

Pay more than the minimum, but not the whole balance, say like 25 dollars more. And don't charge over half your limit. We are buying a home, and this is the financial advice we got from the broker. And whatever you do, don't be late. Nothing will hurt you worse than that, other than going over the limit.

Answer 7

Charge things that you can afford to pay off at the end of the month. Pay off the balance each month. If you can't, just make sure that you pay at least the minimum and always pay on time.

Answer 8

Always pay on time.

I'm betting on "pay the entire balance every month."
After a few months, increase the limit (my card's website will do that without human intervention!) And, get a second credit card too.

Answer 9

Pay in full each month! This way you will build good credit score and will increase your credit.

Answer 10

thats f**ked up. You should make as sincere an effort to pay back your debt as you can. the best strategy is to pay by credit when you have the money in your account to cover it. thats why you get an interest free grace period on purcahses with many cards.

you can pay you debt as soon as you accrue it. If the credit companies didn't WANT you to do it they wouldn't reward you for it.