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I currently have a secured credit card with $300 secured. I thought this would be a good approach to establish credit, so I started using it with the intention of fully paying it off after closing date. I put about $200 on it, but now Mint is warning me that since I'm using 64% of my credit, this could lower my score.

Is using so much of my credit a serious concern when I have so little of it, or is not applicable in this case?

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up vote 3 down vote accepted

It really depends on the credit reporting agency, and then on the people reading it.

In this case, given the effectively small amount of the loan, so long as you are making the payments I would not be too concerned about it.

What matters more in a revolving credit situation is the paying-off; so if you make all payments on time, etc., you are likely fine.

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Using more than 30% of your available credit actually lowers your credit score. Banks usually report to the credit agencies at the end of the month, so one trick is to pay off your balance before the end of the month.

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Also, beware that some banks don't report your credit limit to the credit-reporting agencies (looking at you Capital One) so it forces the credit agencies to assume your credit limit is lower than it really is, and effectively hurts your credit. – JohnFx Jun 14 '10 at 15:00

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