Rebuilding credit

julieanne912

So as I've mentioned before, about a year and a half ago, I did a Ch 7 BK.  My credit actually didn't take a big hit, and since then, I have done 2 new credit accounts with 0 interest, with H as co-signer.  One was for an AC installation, which H paid off in about 6 months, and the other is for our Sleep Number bed, which I am making regular payments on (it's 0 interest for 4 years so I'm not in a rush).  

My score is now in the 720s.  However, my credit history still sucks since things like my car loan that I'm still paying on, now do not count towards my history since that debt was actually discharged.  So I applied for a Visa credit card through my credit union, and was approved, with a $500 limit (LOL).  My plan is to use this card to buy something every month, like groceries, and then just pay it off.  

I used it the first time this weekend to buy $57 worth of groceries.  I have the cash sitting in my checking account to pay it.  Question is, should I just pay it now that it's posted, or wait until I get my statement?  Which would be better to help rebuild my credit history?  

short+sassy

I'm definitely not 100% on this, but I'd wait until you get your statement.  That way it shows a $57 balance on your statement, that then gets paid off.  The other way, it will show a charge...then a credit...but all in the same billing period so your statement balance will be zero.

I wouldn't be surprised if it doesn't make much difference either way, but I think waiting for the statement would be slightly more advantageous for your report because it shows you carrying a balance and than paying that balance off.

And good for you working to rebuild your credit history!  Less than five years ago I had a bogus collection on my credit history that dragged me down to the low 600s.  I had two credit cards...one with a $500 credit limit and one with a $750 credit limit.  That was it.  After earlier in my life having Platinum cards with $5,000+ limits.  Fast forward a couple years to that collection falling off, plus I'd bought a house in the meantime, and now my score is up over 100 points to the 730s.

hoffse

julieanne912 said:

So as I've mentioned before, about a year and a half ago, I did a Ch 7 BK.  My credit actually didn't take a big hit, and since then, I have done 2 new credit accounts with 0 interest, with H as co-signer.  One was for an AC installation, which H paid off in about 6 months, and the other is for our Sleep Number bed, which I am making regular payments on (it's 0 interest for 4 years so I'm not in a rush).  

My score is now in the 720s.  However, my credit history still sucks since things like my car loan that I'm still paying on, now do not count towards my history since that debt was actually discharged.  So I applied for a Visa credit card through my credit union, and was approved, with a $500 limit (LOL).  My plan is to use this card to buy something every month, like groceries, and then just pay it off.  

I used it the first time this weekend to buy $57 worth of groceries.  I have the cash sitting in my checking account to pay it.  Question is, should I just pay it now that it's posted, or wait until I get my statement?  Which would be better to help rebuild my credit history?  

It makes no difference - you should do whatever is easier.

I personally pay my cards off once a month.  I just find it easier when they tell me how much I owe in total, and I can schedule a payment for the full amount when the statement arrives.  H and I also run a lot of money through various credit cards because we have so many reimbursable expenses - it's several thousand per month, minimum.  We have found it much easier to line everything up after the statement posts.  I also think that seeing the balance on my card grow through the month is a good motivator to keep our discretionary/non-business spending to a minimum.

Since you are talking about a single card with a low limit, I don't think it's a big deal to go ahead and pay it off now if that's what works best for you.  From a credit standpoint, it really doesn't make a difference.

LillibetteV

Not totally on topic, but I was a little confused so I'm curious - why are you still paying a debt that has been discharged?

julieanne912

short+sassy said:

I'm definitely not 100% on this, but I'd wait until you get your statement.  That way it shows a $57 balance on your statement, that then gets paid off.  The other way, it will show a charge...then a credit...but all in the same billing period so your statement balance will be zero.

I wouldn't be surprised if it doesn't make much difference either way, but I think waiting for the statement would be slightly more advantageous for your report because it shows you carrying a balance and than paying that balance off.

And good for you working to rebuild your credit history!  Less than five years ago I had a bogus collection on my credit history that dragged me down to the low 600s.  I had two credit cards...one with a $500 credit limit and one with a $750 credit limit.  That was it.  After earlier in my life having Platinum cards with $5,000+ limits.  Fast forward a couple years to that collection falling off, plus I'd bought a house in the meantime, and now my score is up over 100 points to the 730s.

Thanks!  That's kind of what I was thinking, but H was telling me to just pay it off right after it posts.  

And yeah, my credit was never bad before I filed (score was around where it is now), but losing that history sure does hurt.  I actually want to buy a new car in the next year or so to get out from under the one I have (I can turn it back in with no penalty since it was discharged) but I'd like to improve my history more before then.

MommyLiberty5013

Pay it off in full before the due date on your statement. It makes no sense (credit wise) to pay off each purchase as you make it...it's just more work for you having to make multiple payments on your CC. CCs cycle once per month. And, each cycle is what is reported to the credit bureaus.

julieanne912

MommyLiberty5013 said:

Pay it off in full before the due date on your statement. It makes no sense (credit wise) to pay off each purchase as you make it...it's just more work for you having to make multiple payments on your CC. CCs cycle once per month. And, each cycle is what is reported to the credit bureaus.

Awesome, thanks.  So I'll just pay it right when I receive the statement.  

I only plan on buying groceries with this card, so it'll be easy to keep track of it.  The only hard part is remembering that the money for groceries in my checking account is off limits!