I have a perfect credit score, with nominal swings of 5-10 points when I charge my sons tuition. I don't agree with leaving any debt. Pay your cc's in full monthly and always use them is better then not paying the balance. Not paying the balance is costly and causes you to always be bearing interest on purchases immediately.
The real statement is don't open too many credit lines, the ones you do have, closing them will hurt your credit. Make sure to use them.
Some of the details you provided are absolutely correct; however, having a $1 balance vs $0 will not affect the score. The idea of having a $2,000 balance on a $3,000 limit will HURT YOUR SCORE.
You should always be below 30% of your credit limit. If you carry a balance over 30% your score will drop. The higher the percentage, the lower the score will be.
But if you maintain a unpaid balance, the cc company starts charging you interest on all purchases as you make them. If you pay your balance in full, there is $0 in interest charged...... You get charged only if you have an outstanding balance. Pay in full monthly for the lowest cost and best credit scores.
I actually try to pay before the closing date so that the credit utilization rate is really low.
Example: Credit card has a $3,000 limit, closes on the 30th of the month, and I have a $900 balance on the 28th. I will immediately pay at least $850 so on the closing date it appears that I am only using $50 of my $3,000 limit.
I worked at a bank and I will give you pointers that work.
There are many factors that are taken into consideration when it comes to having a favorable credit score:
1. Your credit history (an established credit history of a few year helps)
2. Your variety of credit (example: installment credit (loans, car payment, house payments) and revolving credit (example: credit cards)
3. On-time payments - PAY on TIME
4. Percentage of credit used (You should NEVER USE 30% or higher of your credit card limit. If you do, it will decrease your score. For example, if your limit is $1600, your spending should always be under $480, which is 30% of your limit. If your balance is generally 30% or higher, you will see a dip in your credit score.
To increase your score, here is a tip:
If you are trying to increase your score, for now, a revolving credit works best than an installment credit.
Also set up autopay for at least the minimum payment, so that you do not miss a payment, and pay more toward your installment principal. If you can, pay your mortgage on the 1st and on the last day of the month or prior so two payments are reported! woot, woot!
I HATE TO SAY THIS, but, another way to INCREASE your score, is to get another credit card. If you are approved, the higher the limit the more it will affect your score positively. You will see a slight dip in the score for an inquiry, however, if you DO NOT use the card or have a $0 balance when they report to the credit bureau, it will show the high limit with a $0 balance and it will increase your score. Make sure your other card is also below 30%. Trust me, it works!
Try to apply on the bureau's site with a higher score so that the inquiry will not affect you too much.
Credit Karma will show you the vanguard score from Trans Union and Equifax. The vanguard score is generally lower than the FICO score. Most banks go with the FICO score. Experian will show you the FICO score on their site.
Here are the links for Credit Karma and Experian to set-up a profile:
Credit Karma: https://www.creditkarma.com
@tagteam your credit rating can change Most creditors report to credit bureaus monthly. However, they report data at different times throughout the month, and they may report to only one or two credit bureaus instead of all three and the dates can vary, it's definitely not just the last day of the cc cycle as I've seen my credit report post with mid-cycle balances where the payment has not been made but new charges are also included. The credit bureaus add new information once it's reported to them and impacts your score as reported. I have perfect credit, we just pay balances in full monthly. Only time our credit is not perfect is 2x a year when we put our sons tuition on the cc which drops it from perfect 5 to 10 points depending on other outstanding balances. We took a hit to our credit at one point and closed all those ridiculous store cards and it dropped 50 points for a few months and we had a lines increased on a few, net result is other then those few months we are both perfect credit. All CC paid in full monthly, no exceptions here.