i have bad credit. i finally got a credit card and can start earning my credit. i've been told two seperate stories regarding paying for my credit cards payments to earn those credits.
i was told the 1. if i make monthly payments and not pay my balance (although i have to pay to stupid finance charges), that's a way to earn credit. so i was told to do that for 6 months to a year and my credit will improve
the second one i was told was that i HAVE to pay my cc bills in full EVERY month in order to get better credit ratings. and also to avoid finance charges.
so which one is correct??
1. make monthly payments, have a balance, and pay finance charges?
or
2. pay my cc bills in full every month and not get charged on interests
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It is my understanding that you should have a 30% balance of your total limit.
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Excuse my ignorance, but what credits are you discussing here? Is this a US concept?
In SA it's generally hard to obtain credit unless you have an existing credit history (which I have thanks to paying off a car and having a check account), but is there some sort of system in the US where you get 'credit points' for owing money? I would have thought having your debt paid off in full ASAP would always be the best option-does your government and financial system disagree with that idea?
In SA it's generally hard to obtain credit unless you have an existing credit history (which I have thanks to paying off a car and having a check account), but is there some sort of system in the US where you get 'credit points' for owing money? I would have thought having your debt paid off in full ASAP would always be the best option-does your government and financial system disagree with that idea?
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I totally agree. Here at age 18 you get a credit file which has nothing yet, of course. You must gain credit by getting a car loan, a small bank loan, or a credit card aimed towards students or developing credit. Our reports and scores are tabulated and kept by 3 main private companies. Who we actually have to pay to get our scores and reports to see where we are and to check for identity theft. As of 2004 (I think) they began giving everyone a free credit report once a year but you still have to pay for your scores. When creditors here look at your report they want to see that you have a variety of credit (revolving, installment, etc..) that you pay on time, you use your credit but do not rely on it (hence the 30% balance)and that you have a good length of history. If you close credit card accounts after paying them off it actually hurts your credit score. Checking accounts have no bearing on our credit scores unless you owe on one and it goes to collections. And when I mention credit score I mean the FICO scores. The credit bureau offers "credit scores" for a fee but it is not the score that creditors look at, creditors look at your FICO scores. This is basically how it works here.
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Thanks for the clarification melissa.
FYI, you're trying to use an html 'img' tag for your JoesGoals badge. You need to use BBCode instead:
[code:1:391e603adb]
[img]http://www.joesgoals.com/badge/34D71CEE-0A89-828A-3F95302DC0F3C81C_v_150_200.jpg[/img]
[/code:1:391e603adb]
FYI, you're trying to use an html 'img' tag for your JoesGoals badge. You need to use BBCode instead:
[code:1:391e603adb]
[img]http://www.joesgoals.com/badge/34D71CEE-0A89-828A-3F95302DC0F3C81C_v_150_200.jpg[/img]
[/code:1:391e603adb]
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