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Ambiguity

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Walt_K
Senior Contributor

Re: Ambiguity


@GaTech wrote:

@dddewdrop wrote:

     The other thing is that if you keep your balances low you will be more attractive to other credit card companies. They will be more likely to compete for your business id it appears that you dont really NEED them.  Also keeping balances low should insulate your from a Credit Line Reduction. If you carry very little balances then it is seen as the credit card companies need you and compete over you whereas if you carry high balances it is seen as you needing the credit card companies and they are more in the driver's seat. That being said, if you do have a very low interest rate locked in then that should factor into your decision as well. The advice to have utilisation percent <9% is to optimise your score right before you are applying for something. 




Don't credit card companies like AMEX/Chase have their own internal algorithms to access your risk to them, so having a high balance on a card for an extended period (6months-1 year) might send them red flags

Thankfully, this is no longer 2008-2009 in the credit world.  I wouldn't worry about CLD unless you are maxing out multiple credit lines.  Carrying a large balance on a couple cards to take advantage of 0% offers likley isn't going to cause a problem.  I carried an 80-90% balance on a Chase Freeedom and Citi Forward during the 0% period for 11 months.  Paid them in full and received auto CLIs on both about a month later.

 

You have to consider everything in context.  If you are paying all of your bills on time, have no recent baddies, and take advantage of a 0% offer, that's not that big of a red flag.  If you max out a new card for a balance transfer, run up the balance on the old cards back to max, have a new 30 day late show up on your report, etc., then a bank might have cause for concern.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 21 of 22
Wolf3
Senior Contributor

Re: Ambiguity


@cowboyguy wrote:
So saying "keep util low" isn't always true, correct? I mean I can take advantage of balance transfer offers offering 0% interest, carry a balance in low interest cards all the time... And whenever I intend to apply for new credit or CLI, I simply pay off my balances.

Why not take advantage of free interest?

So I can stay in the garden with high util?

I have posted many times that is "keep util low" is not true.   It only matters when you credit it pulled.   

 

I take advantage of 0% or low interest deals a lot.   I plan my applications in advance and apply when I can arrange low utilization.   And I've never hit the magic numbers, I have had good success with utilization betweem 10% amd 30% overall.

 

Pet peeve: 

"Reporting a balance" is what is reported on your CR.   THis is what is used for your credit score.

"Carryig a balance" means not paying the full statement balance (not current balance) amount by the due date.   This generally results in interest due.

 

Many of you posters use one for the other.   It causes no end of confusion to people.  It even results in people advising that carrying a balance is good for your score, which is complete nonsense. 

Message 22 of 22
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