Does anyone have in-depth knowledge of credit score?

[shedontlove-U]

I want to build my credit score to access loans more easily and quickly.

I've heard that you should spend with your card, but there are also other people who say you should make as few purchases as possible.

I'm not asking for a cheat code (if you have one, I'd be happy if you shared it).

I'm asking for advice that you've seen make a big difference to your credit score.


Thx for helping

 

[Flint]

Just consistently paying off the cards early really. You should only use your credit card as a debit card rather than a credit card - If you spend more than you have then you won't be able to pay it off every month, which is what hurts your credit more than anything.

 

[The WifeThe Wife is verified member.]

I want to build my credit score to access loans more easily and quickly.

I've heard that you should spend with your card, but there are also other people who say you should make as few purchases as possible.

I'm not asking for a cheat code (if you have one, I'd be happy if you shared it).

I'm asking for advice that you've seen make a big difference to your credit score.


Thx for helping

If this is specifically referring to US credit scores, it's tricky because a credit report is actually an average of reports made by three different agencies (Equifax, Experian, and TransUnion). Each has different expectations and what benefits one can sometimes hurt others. The biggest example of this is paying off a debt entirely.

It's important to always have *some* debt that you're regularly paying down. Whether it's a car payment, credit card, student loan, etc. As long as you are consistently making payments, it will gradually improve. There are some things that are out of your control. The most notable is what is called credit age. Basically how many years you've been actively in the economy using credit.

The tldr is that if you always have some debt but always make the payments, your score will (slowly) go up over time. If you're in a hurry, some people recommend working with a company called Chime. They have a card specifically designed for building credit that a lot of younger people find beneficial, but I can't vouch for them personally.

 

[shedontlove-U]

If this is specifically referring to US credit scores, it's tricky because a credit report is actually an average of reports made by three different agencies (Equifax, Experian, and TransUnion). Each has different expectations and what benefits one can sometimes hurt others. The biggest example of this is paying off a debt entirely.

It's important to always have *some* debt that you're regularly paying down. Whether it's a car payment, credit card, student loan, etc. As long as you are consistently making payments, it will gradually improve. There are some things that are out of your control. The most notable is what is called credit age. Basically how many years you've been actively in the economy using credit.

The tldr is that if you always have some debt but always make the payments, your score will (slowly) go up over time. If you're in a hurry, some people recommend working with a company called Chime. They have a card specifically designed for building credit that a lot of younger people find beneficial, but I can't vouch for them personally.

Thx for your reply

Your advice is very valuable for me and I think I have Equifax

I'm going to see if I can get a Chime card.

 

[shedontlove-U]

Just consistently paying off the cards early really. You should only use your credit card as a debit card rather than a credit card - If you spend more than you have then you won't be able to pay it off every month, which is what hurts your credit more than anything.

I just need to spend, okay?

But do I have to repay the entire amount each time, or just the minimum?

 

[The WifeThe Wife is verified member.]

Thx for your reply

Your advice is very valuable for me and I think I have Equifax

I'm going to see if I can get a Chime card.

You have all three. All Americans do. When a bank tries to identify your credit score, they automatically contact all three. All three monitor you.

Be aware that Chime cards are pretty unique. They're technically credit cards but you often need to put money on them in advance. There's functionally a debit card that charges you interest for your own money. But that's how they build your credit. The role of credit is for a bank to ask, "Can this individual be trusted if we loan him money?". Using Chime proves you can be trusted because you're creating a paper trail of your responsibility, but instead of being loaned money from a bank, you're essentially loaning it to yourself just to build that paper trail

 

[The WifeThe Wife is verified member.]

I just need to spend, okay?

But do I have to repay the entire amount each time, or just the minimum?

Paying the minimum is the requirement, paying more helps. Paying the whole thing off is often not the best approach.

Here's a hypothetical positive use example:
Get a credit card and put nothing on it except gas.
Let's say you spent $100 on gas in one month.
You'll get a bill saying you owe $125 (because interest) and your minimum required payment is $25.

You *must* pay at least $25. If you don't, your credit will go down, plus you'll get credit card specific penalties (fees or threats they'll close your account).
The best thing you could do is instead pay most of it. $80 or so. You would then owe the remaining $45. This will help your credit the most.

The next month repeat the process.
Put another $100 on the card for gas. You'll then owe $175 (100 gas + 45 balance + 30 interest).
They'll say your minimum required is around $40. This time try and pay $120ish.

Whatever your maximum credit line is (the max you're allowed to put on your card), you always want like 15-25% of that owed on the card at any given time if you're trying to build credit. The minimum payment is usually just paying off the interest you've acquired, not the purchases you've made. If you need to financially it doesn't hurt you to pay the minimum, but it doesn't really help your credit much.