Do you know that more and more employers are checking the credit score of potential hires? These days a good credit score means more than just a low interest rate on your home mortgage; it could mean the difference between getting hired for a job.
To employers, there is a high possibility that potential hires with financial problems could compromise the company for financial gain (ie. take bribes, embezzlement, and etc). Even if you would never resort to such tactics, wouldn't it be better to improve your credit score to prevent your future employers from asking these kinds of questions if you have bad credit?
Balance to credit availability ratio in a nutshell
A portion of your FICO score is based upon your balance to credit availability ratio. It adds up all the balances on your credit cards. Then, it calculates your credit availability by adding the credit limit on all your cards. You get your balance to credit availability ratio by dividing the sum of your balances with the sum of your available credit. The lower the number, the higher your credit score.
Using a "no credit limit" card to improve your credit score
If you own an American Express card or a Diner's Club card, you can manipulate the "no credit limit" of these cards to improve your credit score.
FICO uses the highest monthly balance as the "credit limit" for a no credit limit card when it does its credit scoring, even though technically you do not have a credit limit. For example, if your highest charge to your American Express card is $1500, but sequence months you only charge $900, then the balance to credit availability ratio would be 60% for this card.
The quickest way to improve your credit score is to have a larger balance on your American Express card a couple months prior to when you expect a credit check to improve your balance to credit availability ratio. For example, if your average monthly charge to your American Express card is $900, but one month you decide to charge everything onto your credit card to have a balance of $3000, then you decrease your balance to credit availability ratio to 30%.
Though using a no limit credit card is not going to change your credit score substantially, it is enough of an improvement to bump you into the next credit score tier if you are on the border of bad credit and decent credit. And sometimes those couple of points might be enough to make a difference between getting hired or being pass over for a job.