Quote:
Originally posted by Mike Oxlong@Jun 16 2005, 07:53 PM
The credit card companies LOVE people who pay interest to them. However they are not the people who always decide on credit. Equifax, and Trans Union base your credit score on a number of factors.
1. Debt ratio. If you have a credit card balance that is always close to the limit that look bad on your record and hurts you. Hakan is bang on, you should pay it off immediately.
2. Payment history. As long as you are paying the minimum monthly payment you shouldn.t have any black marks here. So once you pay it off keep using it for small things but pay it off entirely every month.
3. Credit Inquiries. If you have a whole ton of inquiries into your credit it hurts your credit score as well. Try to keep them to a minimum. Only apply for credit if you absolutely have to.
There are some other factors I know I am forgetting but this gives you a start. You should really go to equifax.ca and read up on credit.
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These things are all bang on. I think the credit bureaus give highest scores to people who use less than 60% of the balance.
But, unless you are not making your minimum payments, the sad fact is your credit score is probably hurt most by the fact that you have only one $700 credit card. Having more credit, with higher limits would improve your score a lot. Paying down your one $700 credit card won't affect your score noticeably.
One more thing. If the interest is higher than 8 or 9%, you should call your bank and ask them to lower the rate or move you to a low rate card. This might not work if you've missed minimum payments.