Letting balances report?

[Kevin86475391]

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@Anonymous wrote:

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@Kevin86475391 wrote:

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@Anonymous wrote:

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@Anonymous wrote:

I would. I quit micro-managing anyway because I'm not planning on app'ing for anything for awhile, plus I'd rather show a history of actually using the cards. It's only one month for you anyway.

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Thanks, both of you. So if I let my 2986/3000 balance report on my Amex. My score would drop. However, it would return to normal the next cycle correct? 

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Yes, it would, but I wouldn't let that much report if you have the ability to pay it down. The conventional wisdom is to aim for letting about 1-9% report instead, and I'd aim for the lower end of the spectrum, so maybe about $100-$150.

Your utilization would bounce back the following month if you PIF, but you'd be temporarily showing a maxed out card and also reporting a high balance very near your credit limit, which wouldn't look good. My suggestion would be to pay about $2,850 before closing, leaving $136 on the card to report.

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In normal circumstances, yes, this is how it should be done. But OP wants to show a history of how much he is actually using (and paying) on the cards. When he pays before statement cuts those lenders aren't reporting his high balance.

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Oh sorry, I wasn't paying attention to that part of the initial post and was focusing on the part about letting something report, which I do recommend. However, personally I don't know if there's any benefit to showing a high historical balance on a card; in fact I'd expect it to be more detrimental than beneficial. Is there any data on this? On the one hand I suppose it does indeed show an ability to use a large portion of the credit line and pay it off...but it also shows you were almost maxed out at one point, which coincidentally was what I was talking about in my earlier post as a drawback. I don't think it's good show that the card was once very near its limit. Maybe I'm wrong, but that seems like something that would be frowned on in manual review. Once it's paid off again, it shouldn't matter at all for FICO score or automated review as far as I know, but on manual review it seems like it would be more likely to make an analyst nervous than to be viewed as a positive. Maybe I'm wrong though or maybe it would depend on the analyst.

Personally speaking for most of my cards I don't think I've ever allowed them to report over about 30% utilization at the highest.

[GalaxyStars]

I aswell have been known to pay off balances and never let a balance show on anycard.

This month I let one of my cards carry a balance, and my score jumped 20 points, but I'm only at 4% utilization.

I'm sure it's temporary as I have experienced similar before, and once it's paid off my score loses the additional points.

[Anonymous]

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@Anonymous wrote:

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@Kevin86475391 wrote:

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@Anonymous wrote:

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@Anonymous wrote:

I would. I quit micro-managing anyway because I'm not planning on app'ing for anything for awhile, plus I'd rather show a history of actually using the cards. It's only one month for you anyway.

---

Thanks, both of you. So if I let my 2986/3000 balance report on my Amex. My score would drop. However, it would return to normal the next cycle correct? 

---

Yes, it would, but I wouldn't let that much report if you have the ability to pay it down. The conventional wisdom is to aim for letting about 1-9% report instead, and I'd aim for the lower end of the spectrum, so maybe about $100-$150.

Your utilization would bounce back the following month if you PIF, but you'd be temporarily showing a maxed out card and also reporting a high balance very near your credit limit, which wouldn't look good. My suggestion would be to pay about $2,850 before closing, leaving $136 on the card to report.

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In normal circumstances, yes, this is how it should be done. But OP wants to show a history of how much he is actually using (and paying) on the cards. When he pays before statement cuts those lenders aren't reporting his high balance.

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idk about letting a $2986 balance report on a $3000 limit card?!? that's too much of a high utilization imo. 

[Anonymous]

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@Kevin86475391 wrote:

Oh sorry, I wasn't paying attention to that part of the initial post and was focusing on the part about letting something report, which I do recommend. However, personally I don't know if there's any benefit to showing a high historical balance on a card; in fact I'd expect it to be more detrimental than beneficial. Is there any data on this? On the one hand I suppose it does indeed show an ability to use a large portion of the credit line and pay it off...but it also shows you were almost maxed out at one point, which coincidentally was what I was talking about in my earlier post as a drawback. I don't think it's good show that the card was once very near its limit. Maybe I'm wrong, but that seems like something that would be frowned on in manual review. Once it's paid off again, it shouldn't matter at all for FICO score or automated review as far as I know, but on manual review it seems like it would be more likely to make an analyst nervous than to be viewed as a positive. Maybe I'm wrong though or maybe it would depend on the analyst.

Personally speaking for most of my cards I don't think I've ever allowed them to report over about 30% utilization at the highest.

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Some lenders use your high balances as part of the equation when determining your intial SL (perhaps even for CLIs as well). Barclay is one that does this for sure. I read an article last year on the Barclay Ring website where they were discussing how intial credit limits are determined, and it specifically stated that those with high balances (and high income) get higher CLs. Even those with lower incomes get a better SL if they also had high balances. Please don't confuse "high balance" for "high utilization" at the time of your app; "high balance" refers to the highest balance you have "previously" had on the card. Lenders do not like high utilization reporting when you app, but most lenders do like to see a history of high balances that have been paid off. It shows that you can handle higher limits, and that you will actually use the card and the limits they give you.

[Kevin86475391]

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@Anonymous wrote:

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@Kevin86475391 wrote:

Oh sorry, I wasn't paying attention to that part of the initial post and was focusing on the part about letting something report, which I do recommend. However, personally I don't know if there's any benefit to showing a high historical balance on a card; in fact I'd expect it to be more detrimental than beneficial. Is there any data on this? On the one hand I suppose it does indeed show an ability to use a large portion of the credit line and pay it off...but it also shows you were almost maxed out at one point, which coincidentally was what I was talking about in my earlier post as a drawback. I don't think it's good show that the card was once very near its limit. Maybe I'm wrong, but that seems like something that would be frowned on in manual review. Once it's paid off again, it shouldn't matter at all for FICO score or automated review as far as I know, but on manual review it seems like it would be more likely to make an analyst nervous than to be viewed as a positive. Maybe I'm wrong though or maybe it would depend on the analyst.

Personally speaking for most of my cards I don't think I've ever allowed them to report over about 30% utilization at the highest.

---

Some lenders use your high balances as part of the equation when determining your intial SL (perhaps even for CLIs as well). Barclay is one that does this for sure. I read an article last year on the Barclay Ring website where they were discussing how intial credit limits are determined, and it specifically stated that those with high balances (and high income) get higher CLs. Even those with lower incomes get a better SL if they also had high balances. Please don't confuse "high balance" for "high utilization" at the time of your app; "high balance" refers to the highest balance you have "previously" had on the card. Lenders do not like high utilization reporting when you app, but most lenders do like to see a history of high balances that have been paid off. It shows that you can handle higher limits, and that you will actually use the card and the limits they give you.

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Interesting! I was completely unware of this. Thanks for the info.

[Anonymous]

Yes, as long as you're not going on a serious app spree, I wouldn't worry about it.  I stopped also.  Have been so busy I really don't have the time right now to go in and make sure all is pif.  And am buying furniture that will take 6 months to pay off.  I never go past 12%.  

[Anonymous]

personally i wont let any of my cards report at that high of a utility. in your case, 2986/3000(!!!). at the most, i'll let it report at 47% but nowhere near 100% utilization if i could avoid it. oh well, that's just me though. carry on. =)

[steelers1]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

I would. I quit micro-managing anyway because I'm not planning on app'ing for anything for awhile, plus I'd rather show a history of actually using the cards. It's only one month for you anyway.

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Thanks, both of you. So if I let my 2986/3000 balance report on my Amex. My score would drop. However, it would return to normal the next cycle correct? 

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Yes, it will be a HUGE score drop, but it will return to normal the following month if you pay it off. I'm pretty brave, but not sure I'm brave enough to let that high of util report - maybe pay it down a little and let just $2500 report (maybe a little less)??

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Its always best to not let more than 50% util. report even if your riding a 0% promo.

[Anonymous]

My closing is May 17. I informed Amex of my plan and they said not to worry, you have until June 12, to pay and your account with us will still be in good standing. I was just trying to inform them because that is not my normal pattern. The rep was nice and friendly. I love Amex Customer Service!

[Marcos8]

I let balances report to show usage and history. I then try to get zero balances reporting prior to new app of HP CLI requests.