Question
Trying to build credit, thinking about a new credit card to increase my credit to debt ratio?
Okay, I'm really interested in hearing from people with real knowledge of credit. I would like to state that I am a responsible credit card user who pays my balance in full every month. I currently have two VISA cards. One card I use for gas & groceries, the other I use for everything else, including monthly charges for my car insurance and music lessons I take. I'm thinking about getting an additional card and transferring my car insurance and music lessons to the new card. I will not be paying any additional money, but I would have the opportunity for greater access to credit. Is this not a good plan? Also, I'm not sure where to go for a new card. I signed up for a program a few years ago to block me from getting 4,000 credit card offers/week because I hated having to constantly dispose of my personal information safely. I also have plans to take out a small installment loan to buy a new mattress and pay if off quickly. Is this a good plan? I will spread these things out over a year. I've always been overly cautious about borrowing and never did, now I have no debt, but also no credit history. I think I have no credit history because people like car salesmen have told me that to justify high interest rates. I guess I'm now just stuck thinking it's true and desperate to get the best score I can have.
3 weeks ago - 3 answers
Best Answer
Chosen by Asker
What do you mean you have no credit history? You have two cards that you pay off every month. I understand your desire to increase your credit to debt ratio issue, so why not ask your current card issuers for an increase in your credit limit? A total combined credit limit that is 3- 4x your total highest combined balance is going to be sufficient. So if you only put $500 a month on your cards and at times you've run up the new charges before you pay off the old one's under the grace period, you're highest balance would be $1,000. A credit limit of $3K+ will be fine to give a great credit to debit ratio even at the worst possible time. Is there something that you actually want the score to increase for. Good scores come from standard responsible practices like you already have. You don't need to do things artificial to raise your score. Are you taking the loan on the mattress just for your credit report? That probably won't help, those often only get reported if you default a payment, but not for paying them off. If you don't see yourself applying for major loans anytime in the near future, just keep going about your business without worrying about building your credit score. Keep doing what you are doing
by Eazy E
3 weeks ago
Asker's Rating: 
Other Answers
You do indeed have a credit history simply from paying your credit cards in full every month. Due to the difference between the billing and due dates there most likely is a small amount that gets reported to the credit bureaus as a balance even though you don't pay interest on it. So getting another credit card will not help your score since your balances if any are so small now. As for the new mattress if you can get it with no interest say for 12-months then I say go for it, if not see if you can get another credit card with no interest for 12-months and use it for the mattress. Just be sure either way to pay it off in full by the 11th month or you will get hit with the full amount of interest from the beginning. I have 3 cards that I use for just about everything I buy every month and always pay them off in full before the due dates and in the last couple of years have actually made money from the cash back rewards and never paid a penny in fees or interest.
by SPIFIMAN1- 3 weeks ago
I think I already answered this question but if you pay your balance in full every month (before they report to the credit agencies) then this will not help you. If this is the case, you already have 100% of your credit lines available. This is a good thing and will give you a good score, not to mention saving you interest charges. Depending on how it is written and reported, the small installment loan may help. It will hurt you the first few months because it is new credit.
by timothy p- 3 weeks ago