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Am I being punished for paying all my cards off each month?

Frequent Contributor

Re: Am I being punished for paying all my cards off each month?


KhuKhu wrote:

09Lexie wrote:
There's a misconception with 'carrying a balance' as opposed to allowing a balance report. For max FICO scoring, its best to allow one card report a balance ( util less than 10%) and PIF.

In order to avoid paying interest, you do not want to carry a balance,

Is there a difference in maximizing FICO scoring if I let my UTL report 2%, compared to say...9%? or as long as it's 1%-9%, it makes no difference?


It makes a difference. What kind of difference it makes for you would be impossible to say. The "optimal" is likely different for different people/profiles/buckets etc. 

Message 11 of 15
Regular Contributor

Re: Am I being punished for paying all my cards off each month?

For your optimum FICO scoring suggestion of 9% utilization, is that a percentage of your total CL between all of your cards... or just the one card you are allowing to report?


Current Score: EX: 718, EQ: 715, TU: 720
Goal Score: EX: 750, EQ: 750, TU: 750

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Message 12 of 15
New Contributor

Re: Am I being punished for paying all my cards off each month?


BackInTheSaddleAgain wrote:

For your optimum FICO scoring suggestion of 9% utilization, is that a percentage of your total CL between all of your cards... or just the one card you are allowing to report?


1 card reporting at 1-9%, all other cards report zero. This seems to be the general consensus on myFico.

 

On a similar note, i'm wondering which is better, 1%, 5%, or 9%? i dont have a general consensus on this but people have been telling me it's different for everyone.

 

Here was the thread i was asking it on: http://ficoforums.myfico.com/t5/Credit-Cards/QUESTION-regarding-UTI-and-maximizing-FICO-scores/td-p/...

Message 13 of 15
Valued Contributor

Re: Am I being punished for paying all my cards off each month?

   This thing about maximising your score by having one card report a small balance and the rest report zero. It is not always true for everyone. Also the number of cards you have reporting a balance becomes much more sensitive to your score when your cards are hitting the 4 year mark. Some people will find they get a better score when 2 cards are reporting a ballance. it varies so don't think that this rule is set in stone. It is best to experiment with the cards you have and your situation and try and figure out how to optimise your score yourself. Different people are in differenr buckets and the models act differently. i wouldn't get too technical with all this stuff. Try to keep it simple.

Message 14 of 15
New Contributor

Re: Am I being punished for paying all my cards off each month?


dddewdrop wrote:

   This thing about maximising your score by having one card report a small balance and the rest report zero. It is not always true for everyone. Also the number of cards you have reporting a balance becomes much more sensitive to your score when your cards are hitting the 4 year mark. Some people will find they get a better score when 2 cards are reporting a ballance. it varies so don't think that this rule is set in stone. It is best to experiment with the cards you have and your situation and try and figure out how to optimise your score yourself. Different people are in differenr buckets and the models act differently. i wouldn't get too technical with all this stuff. Try to keep it simple.


Good info, thanks. Yeah, looks like I will have to experiment myself. I just needed a starting point.  I think will start with reporting 1 card at 1%, and go on from there...

Message 15 of 15