Building Good Credit
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thrash;190824 wrote:
I have a very high credit score and I have never carried any balance on any card ever in over 10 years of card usage. Carrying a balance is entirely unnecessary to establish good credit.I've got multiple cards with "healthy" limits. All are no annual fee. I spend enough with all of them that if we forget to pay a bill or something like that because we're on vacation, when we get back, I or my wife call up, demand that they rescind the late fee and finance charge, and they always do.
We route as much spending as possible through a card with a cashback bonus. It adds up pretty fast, honestly.
Your credit will build faster by carrying small balances, nearly every financial adviser that I've ever read about/spoken with will attest to this. Like I said, it doesn't need to be a lot that you carry, but a small amount is actually healthy for your credit establishment. Necessary, absolutely not....but he asked how to do it w/ the quickest results.
Paying your credit card off in full is a smart thing to do except when you're trying to establish credit. You're trying to demonstrate you can handle credit. Make your payments on time, but keep a small balance on the credit line, say, $100 to $200 dollars. Card holders that pay off their balance each month are low-profit accounts for the credit card issuer. So keeping a small balance on the card demonstrates that you can handle your credit line and aren't unwilling to pay interest on outstanding balances. That makes you a better prospect the next time you apply for credit.
Carrying a zero balance on a student card will give you a credit history, but it won't help the next lender decide if you can manage a loan where you carry a balance. This Bankrate feature has more on what's good about student credit cards.
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