[JulienPDX]

Hi there, I remember reading on AOC a while back that once you have certain cards, you should charge them up to a certain percentage of their capacity and then pay them ALMOST off and carry at least a dollar to the next month. Sorry, I may be saying that all wrong, but does this sound like what was said? thanks

[Qtip]

Originally Posted by JulienPDX

Hi there, I remember reading on AOC a while back that once you have certain cards, you should charge them up to a certain percentage of their capacity and then pay them ALMOST off and carry at least a dollar to the next month. Sorry, I may be saying that all wrong, but does this sound like what was said? thanks

The Fico scoring system is weird, basically the less you use your credit the higher your score will be. As a Rule of thumb, your want to be under 29 percent utilization on all your cards, however if you have 0 utilization then you are penalized or not accessed as many points as a person that has some utilization. Heck the system and the formula is so strange that you get a higher score just by living on the right zipcode "go figure that out".

Now what you might have read at AOC might have been about charging some cards like CApital One to almost the limit, the reason for doing that is that Capital one does not report the available credit, it only reports the amount of cash you owe as your available credit line. Of course this is not helpfull to the consumer. So what people do is they charge the card to the max, allow the charge to cyle once so that it is reported and then pay it off or down to an acceptable credit limit to debt ratio.

If I remember correctly the ideal or magic number to achieve the maximum possible score on any given scenario was and I could be wrong 10 to 20 percent usage on all you cards. There used to be a guide that even showed the difference in fico points according to the usage. I am not sure I have it anymore, but I will look for it. Now keep in mind that a variety in credit type and accounts also affect your score and of course the main contribuiting factor being the lenght of time an account has been open.

In addition to the percentages, keep also in mind that the Scoring system will reward you if you paid an account down to those usage percentage levels slowly over time. Basically if you pay all your accounts down in one month you may not see an immediate increase in your over all score. The system assumes that maybe you came across some cash but you are still liable to fall back the next month and run up your cards.

[Qtip]

I used the amex trick to increase girfriends credit line, then I moved around her available credit to one card. Now she has a 70 plus k credit line one one card. Altough that helps with utilization, I think hers is like 3 to 4 percent, it hurts her when appliying for additional credit as she has been denied due to having too much available revolving credit.
What I am going to do now is take that credit line and lower to maybe 20k and put the rest on a business card she has. That way the other 50 k will not show on her personal credit

[Hedwig]

That sounds like a good plan. Then do big purchases on the business card so the personal card doesn't have too high of a utilization.

[JulienPDX]

Originally Posted by Qtip

Now what you might have read at AOC might have been about charging some cards like CApital One to almost the limit, the reason for doing that is that Capital one does not report the available credit, it only reports the amount of cash you owe as your available credit line. Of course this is not helpfull to the consumer. So what people do is they charge the card to the max, allow the charge to cyle once so that it is reported and then pay it off or down to an acceptable credit limit to debt ratio.
.

Okay, I'm sure this has been debated before, but isn't Capital One not reporting the credit limit; a violation of the Fair Credit Reporting Act?

[Qtip]

Originally Posted by JulienPDX

Okay, I'm sure this has been debated before, but isn't Capital One not reporting the credit limit; a violation of the Fair Credit Reporting Act?

Yes it is, I think Christine is swing them for that.

[Hedwig]

It's debatable. They are reporting accurate information for what they report, they just aren't reporting COMPLETE information.