If you are trying to build your credit?......?

Is it ok to get credit cards. I have had several. I use them and the cut them up and pay them off. I know that it lowers your credit score, if you keep opening up credit. But how else am I suppose to do it:?

You can pay them off and not be a slave to the credit market. The idea is not to pay all the outrageous fees that only takes money out of your pocket. You can save hundreds to thousands with not using credit cards. However you should stop cutting up cards and leave them on the books. Don't keep re-opening accounts. The problem with growing credit is some people don't understand that they can't have the same credit rating as a multi-millionaire. You can't have a $200,000 dollar car with credit scores until you have that kind of income. If you start a part time business, 2nd job or something, then you re-apply to the same credit card for a new credit line. Simply call the card company and a representative will send you forms or do it over the phone. But you have to have the additional income.

Yes, it lowers your score if you keep getting new credit cards. Too many can become a red flag on your credit history.

What I do is I have one credit card. I charge like 100 dollars on it and then pay it off...then I charge like 100 dollars on it and then pay it off. What they are looking for is your tendancies. Do you have the tendancy to pay your bills or do you pay late and run up excessive credit. I never let myself have over 500 dollars in outstanding credit balance. I don't let myself use the card until it is paid off.

Now, if you are looking to buy a house and that is why you want a good credit score...keep in mind that many companies especially banks and credit card companies will tell you you have to have a credit card to do it. That is incorrect information.

Also keep in mind that if you have a balance on your credit card that you are paying off and you are late in paying like your utilities or cell phone bill...credit card companies can and will use that information to raise your intrest rates. Don't get caught in that trap...pay things on time. Also don't get caught in the minimum payment trap, that can take a small amount of debt and keep you in debt for years longer than you need to be.

It's ok to get credit cards, it's ok to use them, pay them off, then cut them up. The problem arises when every other week you're applying for credit. Closing all the accounts can hurt just as much. What you want to do is keep two or three cards that give you the best rate, incentives, etc. (try www.cardratings.com). You don't want too too many cards and you don't want just one. If you have a zillion credit cards, then go ahead and close 'em. It's all based on risk - having no credit looks risky and having too much looks risky. Paying off your card is always best, but if you must keep a balance, make sure it is no more than 35-40% of the credit limit given. Also, it's good to have a mix of a mortgage tradeline, auto tradeline (both installment type payments), as well as revolving lines like your credit cards. Check out www.myfico.com or google "credit tips".