What's a better way to improve my credit score?

Question

What would work better to improve my credit score. Would I be better off by keeping a zero balance on my credit cards and just using my debit card from my checking account? Or would my score improve faster if I were to consistently put charges on each on of my current credit cards and pay off the balance in full each month?

Answer 1

You have asked a very good question, and I intend to try as much as possible to provide answer based on my knowledge.

I would like to first say that a credit card is a great financial tool. It can be more convenient to use and carry than cash, and it offers valuable consumer protections under federal law. At the same time, it's a big responsibility. If you don't use it carefully, you may owe more than you can repay, damage your credit rating and create credit problems for yourself that can be difficult to fix.

There is absolutely nothing wrong in paying off your credit card bills in full each month. If, however, you are unable to do so, then I would strongly suggest you don't carry over to the next month more than 25% of your credit limit. Even if you pay only the minimum amount, your credit card company will still report the balance on your card each month to the credit bureau(s).

It is advisable to use your debit card more often than your credit card(s). This will greatly reduce the temptation of charging your credit card(s) in such a manner that could become so difficult in paying back. Should this be allowed to happen, then, the credit score would be affected greatly.

On the other hand, if you don't use your credit card, no activity would be reported to the credit bureau(s) and that would not earn you any point.

Above all, use your credit responsibly and watch your credit score climb the ladder.

Good luck as you build your credit score! I was once in your shoes.

Derrick

Answer 2

Use your credit cards for everyday things, never exceed 30% of your credit limit in any given month and pay them off in full before the due date.

This will do two things, first it will establish a payment history and second it will keep you debt to credit ratio very low. These two things alone make up 65% of your credit score.

Don't worry about a balance, the lag time between the billing date and the due date will leave a very small amount for the credit card compaines to report each month and you will not be paying interest on it.

I have done ths with 2 credit cards for the last 2 years now and have raised my score over150-points.

Debit cards do not report to the credit bureaus.

Answer 3

while you're 21 and employed 12/18 month. placed the $one thousand in a saving account and convert it right into a secure credit card out of your monetary company or credit union. merely make useful they report to the credit bureau month-to-month. Use it for small products and pay the stability here month. In 12 months, you may have a honest score (620/659 and in 24 a sturdy score 660/749.

Answer 4

Believe it or not, it would help your credit score to use your credit cards and leave a little balance on them from month to month. Banks want to see that you know how to manage debt that you have. Not having debt is best in theory, but it also shows that you just have more credit then you need.

Answer 5

Using your credit card and pay off the balance each month would give you a history of you finance situtation. most lender prefer to see that you are paying you bill on a timely maner.

Answer 6

http://www.daveramsey.com/

https://www.mytotalmoneymakeover.com/index.cfm?

http://www.crown.org/

It is called Financial Insolvency.

Of course pay your living costs first - consider moving and spending less in these costs.

All will tell you pay small credit off 1st, then next up - called the SNOWBALL EFFECT. Works

Buy all your food for 2 years or more, to save. You can make extra sandwiches and sell at work sometimes, other extra incomes.

Yes, YOU WILL MAKE IT. No movies, restaurants out! MAKE THAT BUDGET!

Answer 7

consolidate all your bills into one...some company or bank does it.