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.
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:
uhh what the fuck
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.
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.