Credit gurus....payment question

[Big A]

I guess I just need to look at it as if the credit card company is offering you a better score if you continue to use their card, no matter the balance as long as it's paid on time.

This is exactly how it is, the scoring system encourages carrying a balance because lenders are in it to make money. They don't really care that you are able to pay everything off, they want to know if you are willing to make timely payments that preferably include interest, and even if not, there is a much higher likelihood that someone making payments will get into a situation where they do need to carry a balance, thus incur interest.

[fordracing19]

When your in the 800's it doesn't really matter.

[chronical]

Any difference in score increase would be minimal, if at all. I doubt there would be a difference.


btw, I'm no guru, but I have done a lot of research on credit repair in order to improve my own. Your increase has to do more with the percentage of credit currently used. My guess is you would see a 40 (hypothetical) increase with a single payment or (2) 20 point increases with two payments or possibly a 25 point jump and a 15 point jump.

Your guesses mean nothing. It depends on his overall credit file, the total limits he has, the limit of the card that has the balance and what % that balance is in relation to that one card AND to his overall all limit. Utilization is huge for scoring purposes

[chronical]

The benefit of "spreading" out the payments to help your credit score would likely be offset and then some by the increased interest expense.

Just pay it and be done with it.

If a large balance has been carried for a long time, some lenders will do what's called balance chasing. This means as soon as the payment is posted , the credit limit is reduced to barely over the new balance. Negating any ground gained in overall utilization. Chase has been known to do this. If the balance was short lived he should be ok, but if the balance was carried for a while, I would send in multiple smaller payments

[chronical]

Too much available revolving credit can actually take away from your score.. Like if you have 100k available on credit cards.

This is wrong and should be dismissed

[chronical]

technically if you are chasing max score, typically having between a 1%-10% credit card utilization is better than 0%.

For optimal scoring allow $2 to post on one card. You are correct that 0% is worse than 1 to 10%. Most people don't know that the balance in your statement is what is reported. So to really take control of the utilization that is reported and ultimately used for scoring purposes, then you must pay before your statement cuts. A person could pay his balance in full every month, the day he opens up the statement but still be penalized since this amount has already been reported and won't be updated until the following statement is cut

[chronical]

Not using credit at all gives them no measure of one's worthiness to pay money back in a timely and consistent manner, which is what your credit score is. In that same vein, when you pay cash for everything your credit score will suffer, regardless of how much you make.

Spot on

[CWO]

Your guesses mean nothing. It depends on his overall credit file, the total limits he has, the limit of the card that has the balance and what % that balance is in relation to that one card AND to his overall all limit. Utilization is huge for scoring purposes

I pulled those numbers out of my ass. Of course I have no idea what the actual numerical increase would be. My statement was more based on a single payment increase as opposed to a score increase based on two payments.

[Chili]

This is wrong and should be dismissed

I'm confused, are you saying my statement is incorrect, or that it should not hurt you?

[slow99]

I'm confused, are you saying my statement is incorrect, or that it should not hurt you?

He's saying your statement is incorrect.

[Silverback]

dying with available credit is like actually only sleeping with a stripper and not fucking her

[BMCSean]

Bro!

[SSMAN]

Pay it off. The more available credit you have, the better your score will be.

This, good credit score is based on how long u have had the credit card, an the available amount of unused credit. So dont cancel cards. The longer u own them, the more it will help your score

[chronical]

I'm confused, are you saying my statement is incorrect, or that it should not hurt you?

I read your statement to say that too much available credit can negatively affect your credit score. That statement is incorrect. FICO scoring doesn't care how much available credit you have. Utilization counts for 30% of your score. So in an indirect way, having more available credit actually helps you. Assume to credit profiles are identical in age and payment history.
And one person has a $1000 balance and $2000 in total limits, he is at 50% utilization and would suffer a substantial hit to his score.

while if the second person had the same $1000 balance and instead, had $100,000 in total limits, the affect on his score would be minimal

[Barbie]

For optimal scoring allow $2 to post on one card. You are correct that 0% is worse than 1 to 10%. Most people don't know that the balance in your statement is what is reported. So to really take control of the utilization that is reported and ultimately used for scoring purposes, then you must pay before your statement cuts. A person could pay his balance in full every month, the day he opens up the statement but still be penalized since this amount has already been reported and won't be updated until the following statement is cut

I use one credit card each month for all my expenses. I pay it on the due date (auto pay) and I have a 831 Fico according to discover and 842 FICO according to citibank. I always pay the entire statement balance on the due date. You don't have to pay before the statement creates to get a good credit score. Just pay the right amount and on time.