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

Established Contributor

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

Is that good?
Message 11 of 42
Regular Contributor

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

We should clarify what we mean by PIF and carry a balance. Does "PIF" mean you pay what is due from the previous statement and your current balance ( which could be more ) on or before the due and you let a 0 balance post when a new statement is generated? Does "Carry a balance" means that after you've paid what is due and the current balance you potentially have other charges which would post as a new "due" balance when a new statement is generated? I've always been confused what MyFicoers considered the distinction. I always think you should pay what is considered "due" from the current statement regardless of what you leave as a balance for the next generated statement. 

 

So like...

 

--Carry a balance

 

500 due + 3500 current balance

-3000 on/before due date

+300 new charge

+150 new charge

New statement

950 new balance due

 

--PIF

 

500 due + 3500 current balance

-4000 on/before due date

No new charges

New statement

0 balance due

 

I'm curious what others think. In this scenario I usually carry a balance on 1 to 2 cards and PIF all others. 

Message 12 of 42
Established Contributor

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

The answer is that it depends on the lender. There isn't enough data on most issuers (local cu, regional bank, etc) to know. It is well established that amex's algorithms favor high spending and low to zero balance. There is some evidence that citi favors carrying balances. But to infer some sort of ideal individual behavior from the data available is impossible. Use your cards. Carry a balance when it makes sense (economically) to do so. Otherwise pay in full. Stop worrying about what a lender "wants" or "thinks". Despite the citizens united decision, corporations aren't people. They are giant collections of numbers driven to seek competitive advantage and profit. If you pay your debts, don't over borrow and exercise patience, the lenders whose profile match your habits will find you!
In wallet: Ink Plus 10k, AMEX TE 25k. In bag: CSP 16k, USAA WMC 15k, Hyatt 13k, United MPE 12k, AMEX HHonors 3k. In SD: Cap 1 QS 5k, Discover IT 7k. FICO 08 says my EQ is now 844, was 510 in 2010.
Message 13 of 42
Established Contributor

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


Layered wrote:

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


Oh, interesting, this I did not know.  So a lender would see another lenders pay history, other than the monthly "OK" (or otherwised keyed in) in the legend?

FICO: EQ 768 | TU 813 | EX 781

Amex BCE $25000, SFFCU Visa $15000 + LOC $5000, USAA Amex $6000, USAA MC $7000, Cap1 $8000, Freedom $12000, Slate $500, Barclays "RIP" SM $11500, USBank Cash+ $7500, Citi Diamond $7900, Citi Double Cash $3700, Care Credit $13500k.
My Credit Repair Journey
Message 14 of 42
Established Contributor

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


omskillet wrote:

We should clarify what we mean by PIF and carry a balance. Does "PIF" mean you pay what is due from the previous statement and your current balance ( which could be more ) on or before the due and you let a 0 balance post when a new statement is generated? Does "Carry a balance" means that after you've paid what is due and the current balance you potentially have other charges which would post as a new "due" balance when a new statement is generated? I've always been confused what MyFicoers considered the distinction. I always think you should pay what is considered "due" from the current statement regardless of what you leave as a balance for the next generated statement. 

 

So like...

 

--Carry a balance

 

500 due + 3500 current balance

-3000 on/before due date

+300 new charge

+150 new charge

New statement

950 new balance due

 

--PIF

 

500 due + 3500 current balance

-4000 on/before due date

No new charges

New statement

0 balance due

 

I'm curious what others think. In this scenario I usually carry a balance on 1 to 2 cards and PIF all others. 


PIF to me means I PIF by the due date.  I'm still too new and confused by the carrying a balance and this date and that date.  Smiley Wink

FICO: EQ 768 | TU 813 | EX 781

Amex BCE $25000, SFFCU Visa $15000 + LOC $5000, USAA Amex $6000, USAA MC $7000, Cap1 $8000, Freedom $12000, Slate $500, Barclays "RIP" SM $11500, USBank Cash+ $7500, Citi Diamond $7900, Citi Double Cash $3700, Care Credit $13500k.
My Credit Repair Journey
Message 15 of 42
Super Contributor

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


Cdnewmanpac wrote:
The answer is that it depends on the lender. There isn't enough data on most issuers (local cu, regional bank, etc) to know. It is well established that amex's algorithms favor high spending and low to zero balance. There is some evidence that citi favors carrying balances. But to infer some sort of ideal individual behavior from the data available is impossible. Use your cards. Carry a balance when it makes sense (economically) to do so. Otherwise pay in full. Stop worrying about what a lender "wants" or "thinks". Despite the citizens united decision, corporations aren't people. They are giant collections of numbers driven to seek competitive advantage and profit. If you pay your debts, don't over borrow and exercise patience, the lenders whose profile match your habits will find you!

+1

 

Good advice.  

 

All things being equal, I'd imagine issuers would rather you carry a balance and pay some interest on the debt.  Either way, do what makes sense for you and don't worry about the issuers.  If they don't like it, you or they can move on to another issuer with a better fit.

Message 16 of 42
Blogger

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


kroberts67 wrote:

Layered wrote:

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


Oh, interesting, this I did not know.  So a lender would see another lenders pay history, other than the monthly "OK" (or otherwised keyed in) in the legend?


Check your Experian report for detailed info. Cat Wink

Message 17 of 42
Mega Contributor

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

Cdnewmanpac is spot on. Dont worry about want the lenders want or think spend smart and accordingly.



EQ FICO 548 3/3/16
Message 18 of 42
Blogger

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


omskillet wrote:

We should clarify what we mean by PIF and carry a balance. Does "PIF" mean you pay what is due from the previous statement and your current balance ( which could be more ) on or before the due and you let a 0 balance post when a new statement is generated? Does "Carry a balance" means that after you've paid what is due and the current balance you potentially have other charges which would post as a new "due" balance when a new statement is generated?


In the credit card world,

 

Paying in full means paying off the balance before the due date so that you don't pay any interest

Carrying a balance means "carrying" part of the balance over the due date.

 

So CAB and PIF are exact opposites.

 

Paying off the balance prior to statement closing date is a special case of PIF. 

Message 19 of 42
Regular Contributor

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

Ill give you an inside to what Chase likes to see for CLI on month 6.

1st month lots say you charge $600. 2nd month pay half. 3rd month PIF. 4th month charge again, 5th pay half and 6th PIF.

Once you are at a zero balance, request a CLI.


FICO: EX 662 | EQ 670 | TU 681
Message 20 of 42