04-07-2009 12:08 PM
I heard on a money talk radio show that using (even if it is for a pack of gum, whatever) your credit card and PIF several times a month will boost your FICO score. Is this true? Does it do anything. It was suggested to do this as many times as possible.
04-07-2009 12:16 PM
Strange advice... Your credit is rated on how well you use it and are responsible in paying it back. Thus if you never have a balance reported you would never get rated. CCs only report once a month so no matter how often you charge and pay, it still only reports 1 time. And if you aren't timing the cycle just right and it reports with a 0 balance then you have nothing to report as paying responsibly.
But I could be wrong.
04-07-2009 03:52 PM
04-07-2009 04:00 PM
Paying your card in full multiple times per month would generally guarantee that you end up with a zero reported balance. Having low utilization reported (balance) improves your score. Paying multiple times a month in and of itself has nothing to do with FICO, only with how your bank views the account.
When you have a reported zero balance, the bank still reports your payment amount (the amount paid to get your reported balance) which shows use. Having a small balance report on 1 or possibly 2 cards tends to improve your score slighty (usually 3 - 12 points only).
The problems associated with PIF multiple times per month is that your bank becomes accustomed to your spending and payment patterns. If at some point you are not able to pay off balances immediately or begin to carry a balance for some reason, the bank may interpret this as a change in your financial health and take adverse actions such as reducing credit lines, re-evaluating your credit and possibly income.
There is no real short cut. Timely payments, low or no balances and aging of accounts is really what it is going to take.