Can I use my Credit Card? - Credit Forums

Schwimms · #1 (**permalink**) 08-20-2008, 02:03 PM

Hi,

I have a score of 660 now, and I want to refinance my house next month or October. I need to get my credit up to 680 so that I don't take to much adverse affects of having bad credit. I was told by my mortgage guy to pay down my credit card to more then 50% of my limit. I have currently $7500 and the limit is $14000. I have no other issues with my credit except for this Credit Card.

Currently I am in a position where I need to buy a computer as an investment for a new job. It is going to cost me about $2000. My mortgage guy told me I can do this purchase even though he told me to get my credit card lower, saying two different things. Can I purchase this computer and still lower my credit?

Schwimms · #2 (**permalink**) 08-20-2008, 02:15 PM

I meant...raise my credit... not lower it.

Magic69 · #3 (**permalink**) 08-20-2008, 03:54 PM

Well if purchasing the computer means using your credit card and upping the balance then no

Schwimms · #4 (**permalink**) 08-20-2008, 04:55 PM

Is there any other options I can do that doesn't affect my credit, such as taking a small loan? Using a different card?

I am not even sure if my mortgage guy knew what he was saying about my credit going higher or lower. If I make big payments on my card won't that increase my credit score? If I use credit, does that necessarily mean that I am making my credit go down? Aren't you suppose to use credit?

Magic69 · #5 (**permalink**) 08-21-2008, 08:47 PM

You get dinged for having a high balance on a credit card as a percentage of total available credit line. So paying down the balance can help you. Also, having too much available revolving credit (i.e. credit card credit) can ding you.

The more outstanding balances you have, the riskier you get in the credit algorithms. That is a general rule of thumb. So putting another 2k of debt on your credit will probably ding you (i.e. cause scores to drop).

It makes sense, doesn't it? If you were thinking about giving someone a loan, how would you feel about giving that loan to them if you knew they had quite a bit of outstanding debt to pay? You want to make sure you get paid back, right?

So it sounds to me like you may want to figure out your needs first and separate those from your wants, then decide on what you should do.