Rebuilding the Right Way

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    • #234231
      dealpal
      Keymaster

      I have a question that has been really bothering me and I cannot seem to find clarification on this within the forums.

      I recently applied for a Capital One Secured MasterCard and was approved. This was a big relief since I have been trying hard to rebuild credit after a charged off cc two years ago during college. I have paid student loans on time every month and decided a secured card is the next step in the right direction. However, before it arrives in a few days I was hoping to clarify some things I cannot find answers to. Here it goes:

      I understand that credit utilization is a large calculated portion of your FICO score, under 30% being great and sub 10% ranking as stellar. I have read in many places that it’s best to pay in full every month, leaving a 0% utilization – something I planned to do. I also read however, that since only the utilization rate is reported, having 0% may actually hurt me more than anything. So here lies my question…

      Way is better to do: 1.) Charge every month on my card and pay the amount in full, showing a zero for utilization every month? Or 2.) Charge every month and retain a sub 10% utilization rate, showing that I am using the card and being responsible?

      Any educated responses on the topic would be greatly appreciated. I also hope everyone understands the problem I am having with this.

      For added kicks, is there a percentage I should keep in mind in terms of how much of the limit I should charge every month, even though I aim to PIF or retain a sub 10% util?

      Thanks in advance.

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