How Many Cards with Balances Would Be Good?

[Anonymous]

Also too isn't it important to leave more than $1 because if the limit is a certain amount the percentage of utilization gets rounded down?  For example if I had $79 reporting on my $25k BOA card, it would round down to 0 percent.

The question I would be asking first is, what are your score goals? Are you trying to optimize your scores for any particular reason?  If not, then don't worry about it.

[BronzeTrader]

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@longtimelurker wrote:

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@BronzeTrader wrote:

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@longtimelurker wrote:

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@Anonymous wrote:

To maximize your score I would suggest letting 1 card report a small balance and have all others report $0.  

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This is THE myfico mantra, just not sure how true it is for FICO 8 and for ALL credit profiles.   I have between 6-8 reporting and still get 850, if I let a few more report it has gone down.    

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I think the other poster says leaving $1 balance, not paid. I think if you use the CC and pay it off, it still gets reported. All my CCs are paid on time, but  still Experian does not like it:

FICO® Scores consider the total number of accounts a consumer holds with balances, including credit card balance amounts that appear from the most recent account statements—even if that balance was paid off. Your score was impacted by having too many accounts with balances.

Several of my CCs are paid off this month (going to dormant). So this problem is going away in some sense. I just hope leaving 6-7 active would be still good. Wait and See.

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RIght, any balance remaining on the statement (or at the end of the month in the case of US Bank/Elan) gets reported.   What many people here do is pay all but one card down to $0 BEFORE statement cut.

And yes, clearly too many balances causes a score hit, but I am not sure that 1 is optimal for all.

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This is going to be a tough task to pay off all the CCs except one before the statements are cut. I did not think about that. This is what folks say the micro-management. I'm not up for it. I always carry balance to statement cut, then pay the balance before grace periods. I do get to use some free $$ though. 

[BronzeTrader]

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@Anonymous wrote:

Also too isn't it important to leave more than $1 because if the limit is a certain amount the percentage of utilization gets rounded down?  For example if I had $79 reporting on my $25k BOA card, it would round down to 0 percent.

The question I would be asking first is, what are your score goals? Are you trying to optimize your scores for any particular reason?  If not, then don't worry about it.

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I think if I cut down the # of CCs being used, down to say about 5-6, then I should be good. Now I have about 12 CCs with balances at statement cuts. They are going to die down anyhow. I just need to manage it better. 

[SouthJamaica]

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@BronzeTrader wrote:

I have some CCs in dormant stage for quite some time.

Completely inactive accounts might get closed by the lender. So you should use any accounts you don't want closed at least once every couple of months.

So I put on some charges with them, just $100 or so. And I do not carry interest. One of the credit bureaus is not happy about it and complains about it. 

I don't know what this means.

Now my question is that, how many CCs with balance (even small) would be just right?

The one configuration that will be optimal for all your FICO scoring models is to let all but one of your accounts report a zero balance,

and the other account reporting a small balance (10% or less).

I know if you just use one one or two, probably it is not great for the CC companies. Having 10 or more may be too many. Not sure, maybe 5-6 about right??

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[longtimelurker]

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@BronzeTrader wrote:

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This is going to be a tough task to pay off all the CCs except one before the statements are cut. I did not think about that. This is what folks say the micro-management. I'm not up for it. I always carry balance to statement cut, then pay the balance before grace periods. I do get to use some free $$ though. 

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Yes, nucrinanaging comes at a cost,  giving up the float.    IMO, the "sensible" think to do is PIF on statement due date (by autopay when available) and only when you are apping, and really need every point, do the micromanging for the month before the app.

Of course, part of the love for micromanaging here is that  people app all the time!

[NRB525]

OP, what is your score improvement goal with limiting the number of cards reporting?

Once you start reducing the number of cards reporting balances, you will start to see if there is any effect, and how much that effect is on your profile.

Also be sure to keep track of overall utilization. If your utilization also drops dramatically because now all those cards aren't showing anything, then the score improvement is a muddled mix of utilization changes and number of card changes.

[Anonymous]

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@Anonymous wrote:

Also too isn't it important to leave more than $1 because if the limit is a certain amount the percentage of utilization gets rounded down?  For example if I had $79 reporting on my $25k BOA card, it would round down to 0 percent.

The question I would be asking first is, what are your score goals? Are you trying to optimize your scores for any particular reason?  If not, then don't worry about it.

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Utilization never gets rounded down; utilization always gets rounded up.

.001% = 1% utilization.  .999% = 1% utilization.  1.0003% utilization = 2% utilization.  FICO scoring always sees a decimal rounded up to the next whole number.

As far as the discussion at hand, I think it's all very profile-specific.

For my profile, it doesn't matter if I let 1 of my cards report a small balance or all of them, my score stays exactly the same.  The only time I lose points is if all report a $0 balance. 

[Anonymous]

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[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Also too isn't it important to leave more than $1 because if the limit is a certain amount the percentage of utilization gets rounded down?  For example if I had $79 reporting on my $25k BOA card, it would round down to 0 percent.

The question I would be asking first is, what are your score goals? Are you trying to optimize your scores for any particular reason?  If not, then don't worry about it.

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Utilization never gets rounded down; utilization always gets rounded up.

.001% = 1% utilization.  .999% = 1% utilization.  1.0003% utilization = 2% utilization.  FICO scoring always sees a decimal rounded up to the next whole number.

As far as the discussion at hand, I think it's all very profile-specific.

For my profile, it doesn't matter if I let 1 of my cards report a small balance or all of them, my score stays exactly the same.  The only time I lose points is if all report a $0 balance. 

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Hmm. Interesting.  I guess  I was thinking of when people say that $5 is better than $1. Or say $2, and not just a penny.   I think when I said rounding down, it would be for the banks that see a balance of 50 cents and then they round that down to 0.  Certainly not 79 dollars.  Credit karma was the culprit for rounding down, which is vantage and not fico.  Good to know this. I think its late and I have a few things mixed up!

[Anonymous]

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@Anonymous wrote:

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Hmm. Interesting.  I guess  I was thinking of when people say that $5 is better than $1. Or say $2, and not just a penny.   I think when I said rounding down, it would be for the banks that see a balance of 50 cents and then they round that down to 0.  Certainly not 79 dollars.  Credit karma was the culprit for rounding down, which is vantage and not fico.  Good to know this. I think its late and I have a few things mixed up!

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You are correct that some creditors will round down small balances... $1, $2 even $3 have been rounded down and reported as zero.  Make sure you don't confuse this rounding down of the balance with rounding down of utilization.  Utilization is based 100% on the reported balance.  Over time you'll get to know how small of a balance you can leave on an account and not have it get rounded down by the creditor to zero.  Most people agree that over $5 will essentially never get rounded down, so often an amount in the $5-$10 range us used.

Also be careful when looking at things like the tables, charts or calculations that places like Credit Karma provide.  A lot of these credit monitoring services add a lot of "fluff" and try to dumb it down for people out there with absolutely zero credit knowledge.  We are not those people.  CK will round down utilization amounts.  For example, a $9 balance left on a $2000 line of credit equates to .0045% which we all know rounds up to 1% utilization (for scoring purposes).  CK will round this number down with their fluff software and show you that you are at zero utilization on that card.  While the actual utilization on that card may mathematically be closer to zero than it is to one, rest assured that it will be scored as 1% utilization.