Can credit be improved by charging a cc balance then payning off?

Tips and Deals Forums Consumer Credit Improve credit Can credit be improved by charging a cc balance then payning off?

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    • #199618
      Anonymous
      Inactive

      If you routinely pay off a credit card then charge the balance (max out the card) then pay off, does this look good on your credit or just hurt it and then improve it (when it is paid off) Or should I just pay off little by little? Does that look better?

    • #257668

      Never max out your card. Credit card companies report a negative rating when your balance is over 40% of the maximum allowed balance. Keep your balance below 40% and make your minimum payments. If you can, pay the minimum bi-weekly. By doing this, you avoid paying unnecessary compound interest that accrues every thirty days. Interest on a credit card is accrued on the average daily balance. Also if you pay off your card, the credit card companies are not required to report a positive rating on your account unless there is some kind of activity; which makes sence… that would be more maintenance for them than needed.

    • #257805

      It depends on your total credit that you have. If you have other cards that have no balance it will all count towards your available credit. So say if you have 2 cards and both have a 5,000 credit line. If you max out one – you have a 50% debt to available credit ratio.

      If you only have one card and maxed it – you would have a 100% debt to credit ratio. – So if only one card you shouldn’t max it out.

      If you had an emergency and new that you could pay it off within a couple months that wouldn’t hurt you – but carrying a maxed out balance for months and months and sometimes years on end can hurt you.

      In general – you shouldn’t be maxing out your cards anyway – it is a very bad habit to get into. Living on borrowed money isn’t a wise idea. Credit cards are a tool. They should be used instead of cash so that you don’t have to carry cash around with you. But it doen’t mean that you don’t have the money when it comes time for that bill to be paid.

      If you only charge what you KNOW you can afford to pay off – you will be safe and build a very good credit rating. Keeping a small balance is not a bad thing but – try and pay the majority of it off this way you don’t have to pay interest on it.

      Good luck to you.

    • #415415
      Anonymous
      Inactive

      because some of them are

    • #415416
      Anonymous
      Inactive

      because most of them are, especially targeting disadvantaged people

    • #415417
      Anonymous
      Inactive

      Because some are.

      And some brokers have falsified documents or purposely misrepresented the terms.

      While it is true that if an applicant reads and understands every piece of paper and has a lawyer review the documents before they are executed many do not.

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