Hello, this is your boy Ivan Hall, the Credit King. I want to share with you this cool technique. You can use it with your American Express card, which will help you improve your utilization rate. Your utilization rate is the amount of credit you use compared to the amount of credit that you have. Most credit experts agree that you should try to use no more than 30 of the actual credit that you were granted. Here’s how this technique works.
No Preset Spending Limit Cards
If you have an American Express card or another type of card that has no preset spending limit, understand that the credit bureaus use the highest historically reported balance on these types of cards instead of the reported limit to determine your utilization rate. That means that if you always charge one thousand dollars on your Amex card month after month, Fico views this as you maxing out your card every month.
You need to artificially inflate your high balance on the card by shifting all your expenses to this card for a single month to increase the high balance. You can then pay it down the following month and resume normal activity in future months.
I do not recommend making unnecessary purchases. Just shift your usual bills to this card for one month using the previous example. If you charge $1,001 every month on your card, you would need to charge $3,333 on the card during one monthly billing cycle. That way, when you return to your usual total of one thousand dollars the following month, you will have a 30 utilization rate.
For more informative information on Credit Repair and Credit Enhancement tips visit us online at TheCredit-King.com