Can someone help me with how credit cards work?

Question

Currently my score is in the 640’s, I’m really trying to get above 700 (I’m 21). I have two credit cards with no debt, I pay off the balance every month. My score went down one month because I spent over 50% the limit, but I paid it back in full by my payment date. What percentage of my limit should I be using? Should I always stay below a certain percentage? Does it matter if I make one big payment a month or splitting it up? Thanks! :)

Answer

Do you have a credit Karma account? It breaks down your credit and shows you ways to improve! Things like utilization, derogatory marks, and credit age are all factors. 
If you say that you have no debt, amount of credit and credit history may just be your problem, and simply will increase overtime. You could ask for increases on both of your cards or sign up for a new starter card (Capital One Platinum is my favorite) 
Just be aware that getting a new line of credit factors into the age of your credit history and will lower it, but age of credit isn’t the biggest deal when creditors are looking at your credit. 
A good rule of them is to keep your credit utilization under 30%. If possible, budget to use your credit cards for everything that takes credit (food, recurring bills, etc.) and pay it off in full every month. This will help you earn points if applicable and show creditors that you have a solid payment history and make on time payments, in addition to keeping your utilization low. 
If you need anymore help, let me know. I’m in my young 20’s and I generally always had good credit, but last year splurged a little. However, I was able to recover my credit by 200 points and now have “good” credit!

Answer

For my husband and I.. I have a credit card that's 3k limit, he has one for 5k limit.. he pays them off every month before the credit is checked (29th-1st every month) and during those days we don't use the credit cards at all.. but we also have a car payment that is paid every month and a home mortgage payment every month.. and we both have 750 credit scores.. you also have 3 different scores.. and having a hard credit score pulled, causes your points to go down as well.

Answer

What you’re asking about is called credit utilization. It’s usually best to keep usage under 30% of your limit. Some would even go as far to say keep it under 10%.

Answer

Just don’t let the month close with more than 30% of whatever your credit limit is. Don’t pay the balance in full so they can see you’re using the credit cards and watch your credit score shoot up in no time. (Of course always pay something, I always do more than the minimum but not the whole balance).

Answer

I typically li look e to start below 30%. I dont think it matters if you do 1 payment or multiple. Multiple payments will be good for if you're going to go over 30% so you can always keep it down.

Answer

30 percent is recomended. Also, they suggest you make a couple minimum payments, then pay off. Ive noiced it works to keep my credit up! Im 22 and have great credit.

Answer

You should only use 29%. I was told not to pay all of the balance every month. Something big will really affect your score. For my dad, he bought two trucks and he also has a credit card. His credit score is amazing. He also has a higher credit age. I’m 19 and I have my credit card and car. Since I’m so young, the smallest things can chance my score drastically. So I used my card to pay for an expensive medical visit. So my usage went up and my score is in the danger zone. I’m not too concerned because I know that it’ll go back to normal once I pay it off. So really it’s mostly time. Pay them on time. And everytime you get something new, it lowers your credit age. That’s why I got my car and my card close together.

Answer

As long as you pay it off every month on time it should continue to go up. What really helped me is I used a loan to get a car and paid it off in half the time. It was a 5 year loan and I paid it off in 2 1/2 years. My credit shot up.

Answer

I’ve been told to keep my bill between 30% and 40% so I stay at 30%.

Can someone help me with how credit cards work?

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