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How Should I Let These New Cards Report?

Senior Contributor

Re: How Should I Let These New Cards Report?


JamesKnox wrote:
Okay so basically...I should let 1 card report at 1% UTIL and the other two report at $0 --- CORRECT?

Correct if you're trying to maximize your score.  However, there's not much point unless you're applying for something.  There's no record retained of your utilization.  When you apply they pull your report(s) and use it to determine your utilization at that point in time.

Message 11 of 21
Senior Contributor

Re: How Should I Let These New Cards Report?

What also needs to be watched out for Fico score is the number of accounts reporting a balance.  As I have no intention to app for anything for the moment I did a small experiment to test and challenge SW. First test was to have 7 accounts report with 0$  and 1 account with a balance of 10% which left overall util also less than 7%.  Result: EQ Fico 793 with ideal reporting. Then I started to test the impact with 6 out of 8 accounts to report a balance of 1$ only and two accounts with 10% - overall still less than 7%....wow … heavy ding of 21 points just to let a 1$ balance report on account 5…50% - rule??? EQ Fico dropped to 741.  Now it comes the very big surprise.  Just last month I repeated the exact same and let report 6 out of 8 accounts with balances of up to 10% and my Chase Freedom at 77% - overall util still less than 7% but EQ Fico tanked to the exact same number 741.  So my  resume the single nearly maxed out card did not have an impact for me. 1$ balance reporting or 3200$ balance reporting on my Chase Freedom with a 4K limit  came to the exact same result – score tanked to 741.  Looks to me that Fico does not like 50% or more cards reporting a balance.  But do not play around like me because you might also not recover… while Equifax has updated my balances two days ago and Fako scores moved up again.. Fico SW did not move and stayed at 741 even if paid down the 77% util ---- I guess this is punishment for playing around…LOL..

 

Edit: above testing was done with Amex still reporting at 10K

Move the mouse over the cards for detailed view!
....Last HP 01 NOV 2016...............
Message 12 of 21
Regular Contributor

Re: How Should I Let These New Cards Report?

This is the best post I've ever seen on this topic:


 

 

Themanwhocan wrote:

First you should realize that there are 2 groups that you are trying to impress, and they are to some extent complete opposites.

 

You want to impress the credit card companies. You want to show them that you have credit cards, that you are using them, and that you are paying them off regularily (ideally every month). These companies will decide if they want to loan you more of their money, and they are concerned with risk, and return on investments, etc. So usually for these companies you want to have your monthly charges report to the credit bureaus, then pay in full before you are charged any interest. And don't use too much of any one card, ie, don't rack the card up close to 100%, that can be interpreted as you are finding it difficult to meet your expenses, etc. Appearing desperate is never good.

 

The second group you want to impress is FICO. They generate a credit score. They don't loan you money, they don't care about your credit history. All they care about is the present moment, the current snap-shot of your credit risk. They will sum up your entire credit worthiness in the form of a number. And only a number.

 

So, when you want to 'play the game', remember that you are not just a number (except to FICO, and they don't give you a loan or a credit card, now do they?).

 

Most of the time, just use your card a reasonable amount, let it report, and immediately pay in full. Create that rich, robust credit report that the credit companies want to see. Sure they look at that Fico number, but thats not all they look at, so give them what they want.

 

As to the FICO score, why its always fluxuating a bit, so why not try to optimize it right before you apply for more credit. At that time, and only that time, try to get one credit card to report 1% - 9% and the rest of them report 0%. You have to figure out what date each card reports to the credit bureaus and pay off each cards just before that. For some credit cards that will be approximately the date that the new statements are created. For others it will be a different date (example: US Bank and ELAN cards report your balance near the last day of the month).

 

Its really as simple as that.


 



Starting Score: 676 CK 5/13. Current: 717 EX 6/15 -- Last App: 6/2014
Message 13 of 21
Valued Contributor

Re: How Should I Let These New Cards Report?


Themanwhocan wrote:

 

I don't think you want your credit reports to appear as if you have a bunch of credit cards, yet they are almost always at 0 utilization. Doesn't look right for one thing, and why should someone give you more credit (either a new card, or a CLI) when it doesn't look like you use your existing cards very much. They give you credit because they make money when you use the credit cards...

 

The thing though is that the lender in question can see (because that's who reports) whether the reported balance is $0 because you don't use your card (in which case it may be closed due to inactivity) or because you pay it down before the statement date (which is fine either way).


lg8302ch wrote:

 

So my  resume the single nearly maxed out card did not have an impact for me.


 

A card that's maxed out will have the most impact when the rest of your cards are at $0. And having balances on more than half of your cards will hit you the hardest when that's the only thing that's not clean.

 


parakleet wrote:

It seems like there's a little too much emphasis on the "only let 1% report" obsession.

 

There is. That's not where it's at. The key to credit card health is to avoid carrying over any balance to the next billing cycle and then always to have balances on less than half of your cards. 1% on one card and 0% on the rest is lipstick.

Message 14 of 21
Senior Contributor

Re: How Should I Let These New Cards Report?


my-own-fico wrote:

Themanwhocan wrote:

I don't think you want your credit reports to appear as if you have a bunch of credit cards, yet they are almost always at 0 utilization. Doesn't look right for one thing, and why should someone give you more credit (either a new card, or a CLI) when it doesn't look like you use your existing cards very much. They give you credit because they make money when you use the credit cards...

The thing though is that the lender in question can see (because that's who reports) whether the reported balance is $0 because you don't use your card (in which case it may be closed due to inactivity) or because you pay it down before the statement date (which is fine either way).


The 'lender in question' doesn't base their credit decisions only on their own internal data. They pull a credit report so they can see the data for all your creditors.


And when the numbers that have been reported on the credit reports show a consistent pattern of almost all credit lines being at 0 month after month, if not year after year, that isn't going to look like someone who is a profitable customer. It doesn't look like someone that we can give a credit line increase to, and then they might use our card more instead of our competitors cards. If we steal away a percentage of those $0 usages, well, for some reason the computer is saying thats not likely to be profitable...





TU-8: 755 EX-8: 771 EQ-8: 763    EX-8 Bankcard: 815    
TU-9 Bankcard: 795 EQ-9: 822
   EX-98: 735 EQ-04: 730
Total $437,800
Message 15 of 21
Regular Contributor

Re: How Should I Let These New Cards Report?

Themanwhocan, hope you didn't mind me posting your post, it just seemed very relevant.  



Starting Score: 676 CK 5/13. Current: 717 EX 6/15 -- Last App: 6/2014
Message 16 of 21
Senior Contributor

Re: How Should I Let These New Cards Report?


navyox wrote:

Themanwhocan, hope you didn't mind me posting your post, it just seemed very relevant.  


No problem. Though apparently people still have questions after reading it Smiley Wink

 

Interesting side note: the reason I was able to write that post originally, was because I had to leave work early due to a Migraine. Yep, I had a Migraine headache while writing that post.





TU-8: 755 EX-8: 771 EQ-8: 763    EX-8 Bankcard: 815    
TU-9 Bankcard: 795 EQ-9: 822
   EX-98: 735 EQ-04: 730
Total $437,800
Message 17 of 21
Super Contributor

Re: How Should I Let These New Cards Report?


my-own-fico wrote:


parakleet wrote:

It seems like there's a little too much emphasis on the "only let 1% report" obsession.

There is. That's not where it's at. The key to credit card health is to avoid carrying over any balance to the next billing cycle and then always to have balances on less than half of your cards. 1% on one card and 0% on the rest is lipstick.


Well, for many even that is going too far!  The basic key is just your first point, don't carry balances (and certainly not if you are outside a 0% phase).   The balance on less than half the cards is "merely" FICO score optimization and so is lipstick as well.  

Message 18 of 21
Senior Contributor

Re: How Should I Let These New Cards Report?

Congrats on those cards!!! Glad you went for it!
Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| BOA Better Bal $17.5k |Wmt Discover $12.5k | BR Visa $17.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Smile Gen $7.25k | Dillard's $10k | West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k
Message 19 of 21
Regular Contributor

Re: How Should I Let These New Cards Report?

Thanks young. 

I really have to stay in the garden because I realllllly want Discover IT, AMEX PRG and CSP and BMW Lease. 

 

Goals are...

 

BMW Lease - February

Discover IT/Amex PRG - March

CSP - At least by Fall 2014 


Starting Score: (FICO)(August 29, 2013) 502(EQ) 568(EX) 549(TU)
Current Score: (FICO) (January 28, 2017) 712(EQ) 720(EX) 720(TU)
Goal Score: 720(EQ) 720(EX) 720(TU)

Amex Business Platinum NPSL | Chase Sapphire Preferred $15,000 | Chase Freedom $9000 | Amex ED $1,000 | BofACash Rewards $3100 | Amazon Store Card $4000
Message 20 of 21