In other words if your limit is $1,000 then try to keep the balance around $100. This shows the credit bureaus two things:
1. You do use your credit.
2. You have a good ratio of available credit to debt.
This second factor is very important to the credit bureaus when calculating your score. This is a way you can show that you do have available unused credit.
If you can show you have available credit your score will receive a bump. This tip is most effective with an unsecured credit card. However any revolving line of credit will help your score.
Another tip, if your credit is to low to be approved for an unsecured credit card. Then ask a friend or relative with good credit to add you as an authorized user to their credit card account.
This is commonly referred to as piggyback credit. There have been recent reports that the credit bureaus are no longer going to give any credit score benefits to an authorized user.
However it is expected to take up to 8 years before this policy change will take effect. Thus you can still receive benefit from being added as an authorized user.
If you choose this route then make sure that you trust the credit card account holder and their financial position. If this account goes delinquent or gets behind it will hurt your score.
The account holder just needs to call in to the credit card issuer and add you as an authorized user. This can all be done over the phone.
The credit card issuer then sends a copy of the credit card to your home with your name on it. I suggest returning this copy of the credit card to the account holder.
The accounts' details are then reported on the original account holders' credit and yours. This way you receive the benefits of on time payments and available credit.
As I said, this will only be effective for a limited time. So take advantage while it still is effective and stop paying the high cost of low credit.
