30% of YOUR Credit Score is based on the balance the credit cards report once a month around the statement closing date versus the limit on the credit card.
Find out the limit on your credit card (which ideally you should have two open accounts. Secured or unsecured doesn’t make a difference.) Drop the last number in the limit amount to get your TRUE LIMIT if you want to use credit cards
not as CASH but instead as your personal Money MacGyver tool to raise your credit score.
Then here’s how it works:
Buy something small under the TRUE LIMIT (so if $1000 limit- TRUE LIMIT is $100. If $300 limit – TRUE LIMIT is $30. ) and repeat monthly.
Buy something. Pay it off. Buy something. Pay it off.
Buy something. Pay it off.
Set it up on auto pay through your bank account and monitor it by putting the statement closing date in your phone calendar. If you do have a month where you have some reason to go over the TRUE LIMIT, you need to make sure that you can pay it down to the TRUE LIMIT 2 to 3 days before the statement closing date ends. (Check your account monthly statement for that date.)
Your credit score could be suffering greatly and costing you thousands or more by not implementing this simple financial habit in your life.
Don’t over complicate it.
Credit cards are not cash. They are not income.
You know this.
If you don’t, now you do.
If you have never had a credit card OR used to but then everything fell apart two or more years ago, just following this simple step will set you on your way and most importantly, MAKE SURE those payments are always made on time. Find a bill paying and reminder system that works for you. I really love www.mint.com.
Then there are those of you that are maxed out on one or more credit cards and can’t pay them off in full at this time, stay tuned for my debt pinball plan to eliminate credit card debt without winning the lottery, using your resources (and crayons) to educate yourself and learn how to educate those around you. WE have to be the change we want to see for our future generations. It starts with us!