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Lower credit score or no?


My mom gave me my own credit card (under her name of course because I'm only 16) and the limit is $500. The thing is I heard that when you spend more then 50% of your available credit on your credit card, your credit score can be lower. Is it true even if its only $500 bucks? Sometimes I spend like $450 two weeks before the bill is due, then my mom pays it off online and I continue to use it, which is like another $160 when the actual bill is due. So my total due for this month is $160. LOWER THE SCORE OR NO? I hope I make sense.

It's true that one of the things that impacts your FICO score is the credit limit/credit used ratio. You do want to keep utilization low, but that's hard to do at $500. Better yet, keep paying it off, so you can call and ask for a limit raise to $1000. then still just use as little as you can to keep your mom's FICO score in check. Also, the score looks at her aggregate ratio as well, so you may not be impacting it too much. Source(s): http://ficoforums.myfico.com/
A large part of your credit score is based on utilization percentage. If you pay off your credit bill every month, it probably won't hurt your score too much if you use most of the limit--the problem comes when you max out your card and can't pay it back.
http://en.wikipedia.org/wiki/credit_scor...
http://www.QAPLoans.com
The best thing to do is to keep your balance 30 percent or less of your total available credit. If your mom has been paying off the credit card and there are no late payments you are fine. The one suggestion I have for you is when you turn 18 get a credit card of your own and learn to manage your balances properly to develop your own credit history.
Yes, utilizing the full line of credit can lower your credit score. Try to stay within 20-30% of your credit limit.
I spend a lot on my cards, but I pay the entire balance every month. And they are sending letters to thank me and to give me more credit.

In my case it's good, but it's only a small part of the entire credit score formula.
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