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How can I use my new credit card to maximally benefit my credit score? (lemmy.world)

submitted 2 weeks ago* (last edited 2 weeks ago) by cheese_greater@lemmy.world to c/nostupidquestions@lemmy.ca

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for bills, is having it on autopay with the biller superior to using it manually to pay that biller? I prefer to manually manage all that as I have for years but I figure its beneficial to get that on a credit card and just make sure its paid off. I already basically use a bills bank account to do essentially this manually
only purchase what I already have set aside/budgeted for and can payoff before the grace period
anything else?

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[–] gastroglizzy@piefed.social 17 points 2 weeks ago (1 children)

Spend 30% or less (not more) of your limit and pay it off every month. Don't accrue interest. Do it for a long time.

[–] ChonkyOwlbear@lemmy.world 3 points 2 weeks ago (1 children)

Also ask for an increase to your credit limit every year or three.

[–] RockaiE@lemmy.today 3 points 2 weeks ago (1 children)

I did this for a while, but then at some point Barclays decided that since I wasn't utilizing a decent portion of my credit regularly, they needed to reduce my limit by 2/3rds. When I called them they said it was to protect me, so that I wouldn't accidentally spend way more than I regularly intended. Even after pointing out that my income didn't reduce, so my ability to pay the already approved credit limit didn't reduce either, I would still have to apply (with a hard credit pull) to get the limit reinstated.

And of course, a reduction in credit availability tanks your credit score for a bit, so I doubt that I would get approved for the limit I already had. I don't even think it was that large of an amount, something like 10k before the reduction.

[–] cheese_greater@lemmy.world 2 points 2 weeks ago* (last edited 2 weeks ago) (1 children)

What do you think is a safe generalization of this technique that would have otherwise likely preserved the benefit and prevented the blowing up in the face you experienced?

[–] RockaiE@lemmy.today 2 points 2 weeks ago

I called the other company I have a credit card with and they said it's not something they do, so it may be unique to Barclays.

Honestly I wouldn't worry about trying to avoid this issue. I started with excellent credit, and in a few months it'll bounce back. The credit hit will only matter if you are needing to make a hard pull for a loan or something. Just keep up with paying off the full balance on time, keeping utilization low, keeping your oldest line of credit open, and trying to expand your maximum available credit. If my issue ever does happen to you, you'll already be in very comfortable place. It's silly that this is how the credit score system works.