How do you raise credit score on a low-limit card?
I am on my first credit card with a $250 limit. I read that having a balance of no more than 30% each month would raise credit scores, but my dad says I should spend more since it is such a low limit. Is the 30% percent rule still true for low-limit credit cards?
First you have a low limit credit card – if you just charge 75.00 a month – and pay 75.00 a month, and you always pay double the minimum payment – they will be inclined to raise your limit (usually double each increment) This can only happen if you buy something that costs more than 250.00. You have to be able to accept it if your purchase authorization comes back NO. If you’ve been good, for at least 6 months – you can expect the limit to rise, by increments.
After one year w/this CC – apply for another account. You can do this every six months, and that will raise your limits.
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30% is a guideline. The most important thing to do is pay faithfully on time every month. $250 is not much of limit – so stretching it a little is probably ok. Just DON’T miss a payment – and DON’T go over your limit. Remember to leave enough room for your finance charge.
References :
http://www.pueblo.gsa.gov/cic_text/money/creditscores/your.htm
http://en.wikipedia.org/wiki/Fico_score
You need to prove that you can make payments and use your credit wisely. For years I charged and paid in full each month and I have a very high FICO. The thing is to not get your self in trouble. 0% interest for the first year credit cards can be great for making the minimum payment for a few months. Oddly our credit grows as we show that we can carry credit and make the minimum payments. Put $125 on the card. Pay half the balance, next pay the minimum payment (add a dollar or two more than min if you want), paying a little over minimum for 3 months and paying off the full balance and I bet you get an increased limit on your card. Keep money in savings to pay the card off in full. Don’t use this to get over your head and I am explaining ‘the racket’ of credit scores. The best credit is built with paying on time, not missing payments, paying a little more when you can and knowing that you are not stretching yourself. Your a smart Kid to ask your Dad’s advice and to research. Check out all the free info available on this web site:
References :
http://www.ftc.gov/bcp/menus/consumer/credit/reports.shtm
First you have a low limit credit card – if you just charge 75.00 a month – and pay 75.00 a month, and you always pay double the minimum payment – they will be inclined to raise your limit (usually double each increment) This can only happen if you buy something that costs more than 250.00. You have to be able to accept it if your purchase authorization comes back NO. If you’ve been good, for at least 6 months – you can expect the limit to rise, by increments.
After one year w/this CC – apply for another account. You can do this every six months, and that will raise your limits.
References :
The goal is to show your credit card company that you are a low risk and know what you are doing…. and it helps a lot to make more money too.
What you should do for the first year is "tease" the credit card company into giving you a higher limit. How? Simply by not giving them a penny in interest payments because all you do is charge $20 a month and pay off completely along with your annual or even monthly dues, etc.
That shows them that you are too inteligent to use this card for anything because your limit is too low. They are waiting for you to make a mistake and go over your limit or even just revolve a balance that allows them to charge their interest charge.
Give them the message to come back to you when they mean real business and give you a real credit limit.
Do the $20 a month charge that you pay off completely when the bill comes for about one year… and I can guarantee you they will give you a higher limit soon.
References :
buy gas, food, etc. don’t exceed your limit.
help
http://answers.yahoo.com/question/index?qid=20090813180419AAsLXjN
References :
About a third of your score is based on the ratio of credit card debt to limit. Carrying balances of more than 30% hurts your score. There is no rule that using no more than 30% will raise your score.
You build your credit by using the card and paying it in full every month. There is absolutely no advantage to carrying a balance. You don’t get extra credit points for paying interest. After of year of good payment history, you will likely get a limit increase.
Also, carrying balances is not the same thing as usage. You can use most of your limit and pay it in full every month — won’t hurt your score at all. In fact, the credit card company might increase your limit sooner.
References :