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Established Contributor
Posts: 901
Registered: ‎03-04-2013
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In the lender's eyes... PIF or carry a balance?

The question is not how to increase my score, but more to see from the lender's eyes in terms of building a good history for future additional business or to produce the best future CLI's for each card.  

 

I would think that to PIF across the board each month is best to show reliability etc, but it makes the lender zero money.  What is preferred in the lender's eyes?  PIF? Carry small balance?  Carry larger balance, keeping clear of the limit?  Would the preference differ between prime & subprime, i.e. subprime store cards with higher rates prefer us to carry a balance?

 

 

FICO: EQ 768 | TU 813 | EX 781

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Valued Member
Posts: 29
Registered: ‎09-27-2012
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Re: In the lender's eyes... PIF or carry a balance?

The lenders still make money off of the transactions as well, so even if you are paying in full each month they still make money.  Not as much money if you were to carry balances and they charge interest, but they still make money.


Starting Score (Not Sure of Agency) 615 Current Scores EX 720 (FAKO) (02/27/2013) TU 683 (03/04/2013) EQ
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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: In the lender's eyes... PIF or carry a balance?

I don't think they care if you are carrying a high or low balance. It becomes an issue only when you owe a high amount of debt for your income level. That's when they start to care.
JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Mega Contributor
Posts: 15,453
Registered: ‎04-09-2011
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Re: In the lender's eyes... PIF or carry a balance?


kroberts67 wrote:

The question is not how to increase my score, but more to see from the lender's eyes in terms of building a good history for future additional business or to produce the best future CLI's for each card.  

 

I would think that to PIF across the board each month is best to show reliability etc, but it makes the lender zero money.  What is preferred in the lender's eyes?  PIF? Carry small balance?  Carry larger balance, keeping clear of the limit?  Would the preference differ between prime & subprime, i.e. subprime store cards with higher rates prefer us to carry a balance?

 

 


Creditors make money off of swipe fees so if you use the card alot and PIF they're still making money off of you.




EQ FICO 548 3/3/16
Established Member
Posts: 36
Registered: ‎04-09-2013
0

Re: In the lender's eyes... PIF or carry a balance?

NCAB (Never Carry Any Balance)

Valued Contributor
Posts: 1,673
Registered: ‎11-11-2012
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Re: In the lender's eyes... PIF or carry a balance?


Layered wrote:

NCAB (Never Carry Any Balance)


Except:

 

a) You are in a 0% interest period

b) you need to!

New Contributor
Posts: 53
Registered: ‎05-25-2009
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Re: In the lender's eyes... PIF or carry a balance?

I would imagine any lender would prefer a PIF. They probaly make the majority of their money from swipe fees as opposed to interest and someone who always pays in full would be zero risk to them.

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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: In the lender's eyes... PIF or carry a balance?

[ Edited ]

gsxrgt wrote:

I would imagine any lender would prefer a PIF. They probaly make the majority of their money from swipe fees as opposed to interest and someone who always pays in full would be zero risk to them.


someone who always PIF is zero risk for them until they stop paying in full. So when they do risk assessment it's never zero risk because risk is projected forwards not backwards (although it uses historical data). Lower risk, definitely. Zero risk, no.

 

As for swipe fees, it depends. This is America we're talking about. I wouldn't be surprised if certain banks (Capital One comes to mind) makes more money from interests than swipe. Amex probably makes more money from swipe than interests, but that's my guess. 

 

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Established Contributor
Posts: 536
Registered: ‎04-01-2013
0

Re: In the lender's eyes... PIF or carry a balance?

Is it bad to let CCs report zero balances even if they are new accs

Established Member
Posts: 36
Registered: ‎04-09-2013
0

Re: In the lender's eyes... PIF or carry a balance?

even if your issuers report $0 balance every month, lenders can still see your payment history.

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