Improving Your Credit Score

[kmitchl]

Maybe my expreience will help someone else. I had always had a good credit score. We pay any credit cards off every month. In 2016 we started building a house. So where it made sense I used a cash back credit card to pay suppliers. Some months the card would have 10 to 15K on it at the end of the billing cycle. We paid this off every month. After several months I notched my credit score had declined considerably. One would think that showing the financial ability to pay off this level of charges would have either a neutral or positive effect on credit score. What I found was my creit score was declining. What I found was using a larger percentage of the available credit was causing the decline in credit score. So what I started doing was to go in online a few days before the closing date on the account and pay off all but a few hundred dollars so when the statement came out it appeared that I was using a smaller percentage of the overall credit. In a few months the credit score was back to about where I started.

[Tyrex750]

Keep 30 percent are less of your limit is what I have been told

[RobinHood]

Makes sense.
Following for more tips. I’m about to pay off some credit cards and was told instead of paying them off completely, to leave a small balance on each one. Is this true?


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[.270]

Makes sense.
Following for more tips. I’m about to pay off some credit cards and was told instead of paying them off completely, to leave a small balance on each one. Is this true?


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That works in theory sometimes. When the cc see's you have a low balance and not using your card and they will sometimes lower your limit "due to inactivity". That 30% just became 75% of your limit without you knowing it for a while.

[Trevor73402]

That works in theory sometimes. When the cc see's you have a low balance and not using your card and they will sometimes lower your limit "due to inactivity". That 30% just became 75% of your limit without you knowing it for a while.

I consider myself pretty knowledgeable about credit and credit cards. In the last 18 years, I’ve never had this happen or heard of it happening to anyone. It’s extremly unlikely that a credit card company is going to lower your limit for no reason (inactivity). I have a card that I have not used in over 5yrs (zero activity) and my limit continues to increase.

[Atfulldraw]

Makes sense.
Following for more tips. I’m about to pay off some credit cards and was told instead of paying them off completely, to leave a small balance on each one. Is this true?


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No. I’ve become a nerd about scores - right now mine is 812,

The easiest thing to do is to figure out what day of the month they report, and make sure you pay it off about five days prior to that.

The next thing you can do is get your limits upped.

I have a few cards with 20 and 30k limits, but I usually charge 20-25k a month.

It’s all about the ratio of what you use to what amount you can borrow.

If mine gets to 30k in a month, and they haven’t credited my payment, they freak out and my score drops forty points because it exceeded 30% of my available credit.

It goes right back up the next week or whatever.

[Atfulldraw]

I consider myself pretty knowledgeable about credit and credit cards. In the last 18 years, I’ve never had this happen or heard of it happening to anyone. It’s extremly unlikely that a credit card company is going to lower your limit for no reason (inactivity). I have a card that I have not used in over 5yrs (zero activity) and my limit continues to increase.

Me either.

Wal mart did cancel my card because I never used it.

[WItoTX]

That works in theory sometimes. When the cc see's you have a low balance and not using your card and they will sometimes lower your limit "due to inactivity". That 30% just became 75% of your limit without you knowing it for a while.

I've never had that experience. With AMEX, I rarely go over 10% of my max. Last December, I hit 15%. They emailed me the next day offering to bump my credit limit up 50%.

Edit: Sorry, not trying to pile on. Two others responded before me.

That being said, my CC is only for fuel/tolls/travel, and most months is never more than $200. My situation is a lot different than OP or RobinHood.

[Antlers86]

I use 1 card for everything and pay it off every month. Some months $4-$7k. Before billing cycle ends I pay the full amount off. My score just a couple weeks ago was 818. I haven't seen it drop like you mentioned from paying off amount.

Last week I opened a Lowe's card to get % off every purchase. I received an email from credit karma saying my score dropped and details. From opening that account it lowered 30 points.

Paying the card off every month has never lowered my credit limit either.

[Mayhem]

Pay your bills on time.


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[RobinHood]

No. I’ve become a nerd about scores - right now mine is 812,



The easiest thing to do is to figure out what day of the month they report, and make sure you pay it off about five days prior to that.



The next thing you can do is get your limits upped.



I have a few cards with 20 and 30k limits, but I usually charge 20-25k a month.



It’s all about the ratio of what you use to what amount you can borrow.



If mine gets to 30k in a month, and they haven’t credited my payment, they freak out and my score drops forty points because it exceeded 30% of my available credit.



It goes right back up the next week or whatever.

So, they report every month?
Sorry for my ignorance in the subject. Lol


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[Antlers86]

So, they report every month?
Sorry for my ignorance in the subject. Lol


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Yes every month. Get the Credit Karma app. Shows everything you have, when it's reported and score.

You can see reporting date from each card allong with all other accounts.

[Traildust]

Pay cash and you don't have to worry about your credit score...blah, blah, blah

You know that guy is coming!

[KDinTX]

We try and keep below 10% on reported credit card balances, sometimes it goes over but they are always paid off each month. Except for Home depot, I use their 6 months no interest to my benefit. We've been using it for years like that for credit purposes. Haven't paid any interest on it and we've done appliances, large tool purchases, the most recent was the patio cover we built. We always had the money to cover all purchases but I like to use their money and not front all that cash at once. Chase sapphire, slate and freedom will show your score, updated once a month as well.

[Passafist]

AMERICAN EXPRESS!!! No limit so it doesn’t show a income to debt ratio, that’s what got you, credit scores look at available credit and open to buy. So if you have a card with $10000 limit and you max it it scares other creditors even if you pay it off every month