How to bring your credit score up through credit card purchases?

I just got a credit card recently, and I thought I knew how to bring my credit up. I figured that if I paid my bill every month, that was really good and you would jump in the ratings. My mom says you should keep a little bit of a balance, and that looks better. That would mean I'd pay the interest rate. Why should I have to pay the credit card company to bring up my credit score? Is this right, and why does it work out like this?|||As the old expression goes "listen to your mother"!





If you pay off your credit card balances every month, it could cause a negative effect on your credit score. Suppose that you use your credit card to purchase pay utilities, phone, gas, groceries, and everything else each month, always spending around $1,250 each month. When the bill arrives, you pay the balance in full, now you would think you would get bonus points for staying out of debt and paying off the balance in full each month, but not when you consider how you look on paper. What is your credit card issuer reporting to your credit report each month -- the total amount you owe at the time of the report and that you pay on time, not the fact that you pay your balance in full each month. Therefore, on paper, it looks like you carry a $1,250 balance on your credit card and never pay it off. Therefore, a good idea would be to have 2 or 3 credit cards and rotate them, using one for a few months, then using another, so that your credit card company can report a zero balance every few months to the three credit reporting agencies.





Another FICO rule is to not exceed 30% of your total avaialble credit. EXAMPLE: You have 3 cards, they total $3,000 in available credit, never charge more then $900. It will raise your score the lower your ratio of debt to available credit is.





Pay your bills on time. Delinquent payments and collections negatively impact your score.


Keep balances low on credit cards and other "revolving credit." High outstanding debt lowers your credit score.


Apply for and open new credit accounts only as needed. Don't open an account just to have a better credit mix; it probably won't raise your score.


Pay off debt instead of moving it around. Owing the same amount, but having fewer open accounts may lower your score.








Hope this has been of help to you.|||I'm assuming you're new in the credit world and your credit card has a low credit limit, correct me if i'm wrong though.





if your card has a credit limit of like $500, you need to be extra cautious because even charging a $300 purchase on your card could result in losing some points, it all depends on paying your bill off or most of it before a really high balance is reported to the agencies... it's like you owed $300, and even if you paid it as soon you could and made the balance $0, if the $300 balance was already reported to the bureau, the full payment you made soon after will not really help your score because as far the bureau's are concerned you're still carrying a $300 balance as of when it was reported, if it gets paid off after they don't really care.





my suggestion would be to make it simple, don't use your card more then 30% of it's credit limit, and if you can try to pay it off in full right before you receive the statement, or try to make a minimum payment higher than that of what appears on your statement, so if you owe $20 in minimum payment, try to pay a little more to show the bank of your financial ability to repay higher than what they asked.





hope this helps. |||My mom told me the same thing and she wound up in $30,000 of credit card debt and was broke.





I learned about credit through reliable sources and a credit card is just a short term loan to be paid in full each month. People who pay their cards each month have the highest credit scores (over 800). If you don't have the money to pay in cash at the bank, then you can't charge the purchase to the credit card.|||Paying your whole balance off looks great on your credit. Just be sure to keep at least on card open and charge something ( even if its a pack of gum) evy now and then so that it stays active. One thing that will raise your credit score is having an account for a long time. |||You can better try this to get some useful links. It will help you a lot as it helped me.


http://personal-loan-info.freehostia.com/


All the best...