I buy things on credit card, and pay the full amount off, but my credit score is going down instead of up?
I have nothing else my name expect this credit card, and student loans that are not due yet because I am still in college.
you're probably using too much of the available credit. you need enough available credit that your necessary spending is less than 30% of your available credit when the statement generates each month. you can either do this by opening more cards such that you have a higher available credit or by paying the card down before the statement closes. don't pay all your cards to zero, though - there's another penalty to your score for having all zero balances.
do NOT pay interest on your cards. it does NOT improve your credit score. it only throws money away.
edit: I should also say - this utilization score has no memory so it only matters when you're applying for a loan. it won't remember what your utilization used to be in prior months. they're planning to change this though.
:this:
it won’t remember what your utilization used to be in prior months. they’re planning to change this though.
uhh what the fuck
don’t pay all your cards to zero, though - there’s another penalty to your score for having all zero balances.
Huh? If I'm not paying off my cards, aren't I missing payments and accruing interest?
I'm not entirely sure I agree with the OP, but I think they are saying that you should pay everything off 100% all the time, but keep the a revolving balance (i.e. you can't take a month off of using your credit or you'll get a [small, temporary] penalty)
I think you're right, but I'm struggling to understand the difference between current balance and statement balance.
The current balance is live, and the statement balance becomes a matter of record (and you have 30 days to pay it off). If you pay your bill to 0 before the statement comes out, that usage is not reported to TransUnion/Equifax so it won't have any positive or negative effect on your score.
no, you pay the statement balance each month not the current balance. the statement balance is the amount that's due from the previous month. the current balance includes the present month's spending. if you pay the current balance before its statement generates, you'll lower your utilization but doing this across all your cards lowers your score because this shit is intentionally confusing and meant to fuck you over.
I'm really struggling w this. Are you suggesting the above so that one's credit utilization is above zero (I've run into one cnbc article that suggests to do this; all articles I've read have suggested to keep the utilization rate less than 30 or even 10 pct; but the one cnbc article says the same, but also to keep it over 0 pct).
Again, I'm dumb and don't understand how I would do this, even as you just explained it. I've been paying off my credit card as soon as I use it. I never use any more than five or ten pct of available credit line at a time, and, again, I always pay it back immediately. I use the CC very frequently, and pay it off a few times a month. How should I better schedule payments, so as to have my ratio be between zero and ten(rather than just zero, as I guess it must be now? (for example: let's say my billing date is the first of each month. Let's say all my balances are zero going into July, and that my credit limit is 10000. And let's say in July, I spend 1000 on my CC. When and how should I pay this back?)
(Appreciate you humoring me if you have the time to; apologies if I've missed your point)
I guess I'm struggling between statement balance and current balance, and the timing requirements related thereof.
yep, precisely. a 0 credit utilization is penalized so you want at least one card to report a small balance when the statement generates. every other card should have its current balance (which includes the statement balance + the balance that has not yet been included on any statement yet) paid. you only need to do this in the month before you apply for credit as utilization has no memory.
the due date for each card is about 5 days before the next statement generates. so on the due date you want to make sure you bare minimum pay the statement balance. to optimize utilization you'd pay the total current balance instead. let's say in May, I spent $50 dollars. that generated a statement on June 6th saying I owe $50 dollars. then in June I spent another $50 dollars. on July 1st, the May statement balance is due but there's also the balance from June on the card. this balance is not yet reporting on a statement so it hasn't been sent to the credit agencies yet. let's say my credit limit is $100. this means that if I pay the statement balance from May in full, my utilization on July 6th will be 50/100=50%. however, if I pay $100 instead, my utilization will be zero. if this is my only card, I might choose to pay $99 instead so that it reports 1% instead of 0% (in reality you want to aim for more like 5% - the zero balance penalty starts to apply under some threshold near 5% but we don't know what it is).
hope that helps! this shit is confusing on purpose so that you fuck it up and wind up paying penalties or hurting your credit score.
https://www.nerdwallet.com/article/finance/credit-score-does-carrying-a-balance-help
Another thing: you can literally ask for a credit limit increase at any time. You don’t technically have to give an accurate estimate of your yearly income, I’m pretty sure most people don’t even review those kinds of demographic info. Part of the reason why people love the blockchain so much is because one day it will lead to an end to people saying they make 7 thousand more than they actually do to better qualify for stuff.
Part of the reason why people love the blockchain so much is because one day it will lead to an end to people saying they make 7 thousand more than they actually do to better qualify for stuff.
Just gotta point out that crypto ventures misrepresent their levels of assets all the time.
Crypto is a ponzie scheme, I’m talking about actually functional usages of the blockchain. Tracking transactions is fine but tracking all financial information is what is really important. Employer ID, tax bracket and credit score will follow you everywhere like the mark of the beast.
so even if I pay in full, but I have too much utilization I will get a lower credit score?
yep, but only for that month. if you have a lower utilization next month, it will reset to a higher score. ultimately payment history is more important.
The whole “credit score” scam was invented by the banks to keep us all in fear in the Capitalist Game.
In the 80’s they preyed upon anyone 18 and over by relentlessly sending them tons of credit cards. Basically trying to hook every one into the debt/venture capital/consumer lemming mentality (thanks Brandon).
What a bunch of bullshit.
I did what you did for a long time, then when I wanted to buy a house I had to first get a credit card for a year. I think I used it for my groceries and phone bill only.
Totally rational system btw.
Is that how it's done? Cos I can't fathom saving 5 figures, let alone 20% for a deposit
Oh no, having an extraneous credit card is on top of saving up for a deposit.
(And you can pay less than 20% for a deposit, but if you actually need to, they're going to fuck you over very badly.)
To be fair high financial equity basically requires you to have some sort of credit that can be leveraged as well as some sort of debt to offset operating costs. Think of it like futures except you’re betting on yourself.
- Always ask for fee refunds.
- If you are a transactor (aka you pay your last statement balance in full basically every month) then you need to ask for a finance aka interest charge removed when you ask for a late fee refund.
- Never close a card, that hurts your credit. To keep a card open, just spend three or so dollars every couple months.
- Do not just open a new credit card. Research cards that are offering 0% apr balance transfers. Be aware that there are balance transfer fees so calculate the pros and cons before doing anything.
- When in doubt, say that you think the bank is acting unethically. Bullshit a specific reason. Things are escalated as soon as you say the magic word, illegal.
- Can I speak to your supervisor is also the magic word, people will call you a Karen but they have more access to the system and more ways to give up and get rid of you.
- Credit card agencies and banks are leveraged to hell and back and overly reliant on outsourcing labor. They will cut back during the downturn. They are not trustworthy. They have literally suckered people with secure cards tied to real assets and they haven’t done due diligence on whether there are competing claims.
Man America’s so weird.
Down here in Aus and NZ, you can open and close as much as you like. All the banks care about is the max you can draw on at any one time (lower is better), the amount of money you owe (again, lower is better) and whether you’ve missed any payments (again, lower is better).
You can churn through multiple cards every year to maximise sign up bonuses, no problem.
That’s weird. The banks here just look at your income vs your (potential) outgoings. If you have a line of credit, they just assume it can be maxed out, increasing your outgoings.
It’s why here you people only apply for a credit limit they need, and why people cancel credit cards before applying for home loans.
love the absolute fucking hilarity of amerisharts having a LITERAL credit score that nobody is allowed to even know the rules to, and which actually GOES DOWN if you even attempt to check it, as if it's bound to the fucking Quantum Uncertainty Principle for no fucking reason :agony-mescaline: :xi-gun:
unfortunately I also am one
If you want to game the system, get as many cards as you can. Not only will that increase your available credit so usuage won't ding you as much, but it builds credit history quicker. 10 accounts open and in good standing for 1 month are pretty much equivalent to a single account open for 10 months. Look for cards that give you sign up bonuses. And I echo other's advice in this thread. Do not EVER pay interest if you can help it
I have like 760 and I've traditionally just paid off my balance every month.
Nah, they take a bite from both ends. They charge interest to the purchaser if they can't pay their accrued balance off, but also charge the vendor a service fee as a percentage of the transaction. They always get a piece
The other factors are how old your accounts are and how much of your credit is being utilized.
Your credit score goes up if you have a balance.
They want to see if you'll be profitable to have as a customer, which paying off credit and not having interest means you arent
This is what I believed for a long time. Then I was in a relationship with someone with excellent credit and who prided themselves on knowing how all this shit worked. They thoroughly convinced me that this idea of "don't pay it off every month because they want to profit" was just a myth. Showed me some seemingly reputable sources confirming this, saying that paying your credit card(s) off in full every single month was the best way to increase your credit score. My credit did go up a little bit in this time. But then that person proceeded to take advantage of me, financially and in other ways. Now I don't know what to believe. :stalin-stressed:
That person's advice was 100% correct in this case. Your score does not go up if you have a balance, it goes down . Pay in full every month and gradually it will go up, even if there's bumps on the way.
This myth started because if you have a credit card you literally never use, they might close the account and having fewer accounts open can hurt your credit score. That's not at all the same as paying the full balance every month.
Something weird is happening. Mine goes down when I have a higher balance and up when I have a lower balance. I've never had any debt either, just paid the bill every month .
