Shrimpboat asked:
i have bad credit. i finally got a credit card and can start earning my credit. i’ve been told two seperate stories regarding paying for my credit cards payments to earn those credits.
i was told the 1. if i make monthly payments and not pay my balance (although i have to pay to stupid finance charges), that’s a way to earn credit. so i was told to do that for 6 months to a year and my credit will improve
the second one i was told was that i HAVE to pay my cc bills in full EVERY month in order to get better credit ratings. and also to avoid finance charges.
so which one is correct??
1. make monthly payments, have a balance, and pay finance charges?
or
2. pay my cc bills in full every month and not get charged on interests
BASIL
Comments
I **** Credit cards
Here is what you need to do:
1. Never allow the balance of your card to exceed 50% of the limit you were allotted. (ex: If you have a credit limit of $1000, never allow the amount you have charged, including all service fees to go above $500.) This shows that you are responsible with your credit and will help your score.
2. Always pay your bill BEFORE it is due. Or at the very least, set it up on automatic payment.
3. Always pay more than the minimum. Always.
4. As for keeping a balance, I personally always keep a very small one. This is how credit card companies make their money. If you just pay it off every month, you might not get the points from some companies.
It is almost impossible to understand what credit agencies use to calculate your score. Do “this” scores go up, do “that” and it will go down. Both choices will work. What matters is the length of your credit history, the amount of credit you have, the variety of credit you own (Mortgage, Car, Credit Cards, Lines of Credit.etc), and the amount of debt you own in relation to your credit limit. See one comment about credit and debt below.
The FICO score evaluates your total balances in relation to your available credit. This is known as credit utilization. Credit cards that are “maxed out” can lower your score. Try to spend only 30% of your credit limit. If you have a $10,000 limit on one card, keep the balance near $3,000. My credit utilization was too high. It helps that I pay off my balances every month, but it is better to spread the spending.
Have seen lots of people asking info on bad credits. Well, if you need to get your problem solved onarrange loans or other finance, and usually means you will pay more interest on any loan you take out.
There are more that a few lenders who specialize in credit cards for people with bad credit. You just have to look a little harder than most people have to.
And getting a card after you’ve had a few problems doesn’t necessarily mean that you have a higher than normal rate. Like, I said, you’ll just have to compare between credit lines, yearly fees, and interest percentages. Just make sure you do your homework BEFORE you commit, and you’ll be fine.
You can find some offers for credit cards, both secured and unsecured here:
Its actually a combination of both methods…