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Regular Contributor
Posts: 104
Registered: ‎02-05-2013
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3 Small amounts on 3 different credit cards

Is it a good idea to have 3 small amounts on different cards? Will this help my credit score more than just having 1 small balance on 1 card or does it matter? My cards CL and Balance are followed:

 

Chase 3000 CL - 34.00 Balance

Capital One 416 CL - 40.00 Balance

Discover 1000 CL - 16.00 Balance

 

Should i pay off all but 1 card and just let 1 card report a balance or will reporting all 3 of those balance increase my credit score even more?

Thanks for all answers Smiley Happy

 

Keith

Discover IT 02/2013 (1000.00),Chase Freedom 02/2013 (3000.00),AmEx Blue Cash Everyday 06/2013 (3000.00)
Citi Simplicity 06/2013 (1000.00)
TU FICO - 718 , CK TU - 738 , Credit.com EX - 727, Quizzle.com - 720, CreditSesame.com - 720

Contributor
Posts: 80
Registered: ‎01-10-2013
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Re: 3 Small amounts on 3 different credit cards

Unfortunately, I've received the follow up letter after application that is required if the applicant was approved for the "best" terms (lowest apr, highest limit to income, etc.) with the only reason listed "too many accounts with a balance"...I owed less than $200 with over $50k in available credit. So for some reason, no, it isn't better.
Contributor
Posts: 80
Registered: ‎01-10-2013
0

Re: 3 Small amounts on 3 different credit cards

Excuse me, I meant was NOT approved for best terms.
Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: 3 Small amounts on 3 different credit cards


Sabrian31487 wrote:

Is it a good idea to have 3 small amounts on different cards? Will this help my credit score more than just having 1 small balance on 1 card or does it matter? My cards CL and Balance are followed:

 

Chase 3000 CL - 34.00 Balance

Capital One 416 CL - 40.00 Balance

Discover 1000 CL - 16.00 Balance

 

Should i pay off all but 1 card and just let 1 card report a balance or will reporting all 3 of those balance increase my credit score even more?

Thanks for all answers Smiley Happy

 

Keith


according to the FICO formula, letting 1 card report a balance with the rest not reporting any balance will improve your scores at least by a little. It is hard to estimate how much your scores will be affected by this however. For some people it's around 5 points, which is pretty much non-existent. For some others, I've seen it go up by almost 20-30 points. There's too many other factors varying between individuals to tell. 

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
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Valued Contributor
Posts: 1,084
Registered: ‎02-06-2013
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Re: 3 Small amounts on 3 different credit cards

    Hi. I used to give people advice in your situation to make sure that all your cards except 1 were reporting a zero balance and have that one report a balance between 0 and 9% of utilisation for that individual card. However I have since been corrected by the experts gere that the precise mix for optimal FICO depends on your individual situation. Another way people say that here is that this is a YMMV situation. From people smarter than me i have also learned that the situation for people with an AAoa changes at the 4 year mark at which point sensitivity of the score to the number of accounts with a balance increases and more points are at stake.  

   My conclusion from all this is to stick to general princlples here. The general principles that we know are true are that it is better to not owe a bunch of money to banks, thus it is better to have small balances then big ones, and thus keep up with paying your cards down as much as you can and you should be in good shape. Personally I spend a lot of time trying to figure out if I should let this or that card report a balance this month because i want the best score possible in the long term but want to be eligible for CLIs as well. I don't want to be in credit card debt, yet I don't want any of them closed for inactivity. If I were you I would start reportong zero balances in more of your cards and see if your score gets better. The info you are being given seems to indicate that it will.

259/21001600/16002400/25002000/2000,2013 Scores (Initially none cause I had no credit at all then TU:519 Recent scores:FICO EX 632,EQ 635,TU 659....Link to my Rebuild Log

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