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Nope.
The only time that high balance may be used in scoring is if there is no CL provided to the CRA (i.e. charge cards)
@Anonymous wrote:
Looking at my credit report I see revolving accounts list the credit limit, high balance, and current balance. Was wondering if having a high balance closer to the credit limit plays a part in scoring? For example if I have a limit of $5,000 on a particular card, does it affect my score if the high balance is $4,500 vs $500? I know the ratio of limit to current balance can affect score, was wondering about the high limit does as well. Thanks
The actual score no, except during the time that you are carrying the balance like you mentioned, utilization.
But I do believe that some institutions use the high balance as a means to score you. I have no proof that when you apply for new credit from company B and you have used, at one time 80% of your limit with company A that some algorithm picks up on this, compares it to your current balance and scores you one way or another. Same way for CLI's that figure is used by the computer. The inner workings of automated systems from all the different companys is way above my pay grade.
And I could say with almost 100% certainty that it's used to score you in manual reviews for new credit or CLI's. An anaylyst can estimate if you paid it off in a timely manner by making more than the minimum payments or you struggled with it. A 4.5k balance paid off timely vs. a $500 that you had trouble getting off the books.
My point is that the figure is on your report for a reason. Computers see it, humans see it, so to totally dismiss the figure that it doesn't play a part in scoring would be a mistake on our part. Figuring out how it is used is a discussion worth having.
It shouldn't affect your score, but really, none of us know the exact algorithm. What I can say is that if someone were to do a manual review, they could judge your credit worthiness by looking at your high balance and seeing if you've paid it down or off. In that case, a higher balance works in your favor- so long as you've been responsible with it.
Found out something interesting today about Venture and High Balance reporting. I took a look at my Equifax and Trans Union and noticed the high balance reported for my Venture was $4,993, which seemed odd because only one statement had cut and the balance on that statement was $2k.
Called Capital One and they stated that the high balance reflected balance transfers that came over and even though that $4,993 was only the balance for 3 days before I paid it down, that they report high balances even if they occur only for a three day period.
My experience with high balance reporting with my other cards was that the highest balance reported would be the one when the statement cut and reported- not one that happened for a 3 day period which occurred weeks even before the statement cycled or cut.
Just wanted to put this out there so others can be aware. It's not a big deal but I was kind of surprised to see it on there.
Showing a high balance isn't a bad thing as it shows you can pay down CC balances.. I appreciate when creditors report this. I tend to pay things whenever I see them post, thus never really getting a high balance.. Probably should do it once a month then would have some considerable high balances showing. Probably really would only benefit you on a manual review if you showed a high balance and now a very low balance.