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PIF vs. Minimum Balance!!!!

New Contributor

PIF vs. Minimum Balance!!!!

Hello All, My question is what is better PIF or minimum balance...it may seem like a rhetorical question so let me go in detail..I just received the BankAmericard Platinum Plus Visa also known as the 99/500 here on the forums and was wondering what is the best way to reflect good history and up my chance for other products and CLI in the future..any suggestions are appreciated.. oh a little history..I filed bankruptcy (chapter 13) in 09/2008 and it is due to be over in 09/2013...i have a new car loan for about 15k that is about 6 months old and just received BankAmericard 10/2012.. When last looked at my TU CR is was at 605 but now really sure what the other are and what that even means...
Message 1 of 14
13 REPLIES
Super Contributor

Re: PIF vs. Minimum Balance!!!!

Always PIF.
Message 2 of 14
New Contributor

Re: PIF vs. Minimum Balance!!!!

why do some people say let a little balance carry over for reporting purposes? what does that mean?
Message 3 of 14
Valued Contributor

Re: PIF vs. Minimum Balance!!!!

I am pretty sure so that your utilization shows up around 9%, which seems to benefit for scoring purposes.

Starting Score: EQ 717 EX 724 TU 736
Current Score: EQ 832 EX 783 TU 816
App free since 9/15/15
Message 4 of 14
Valued Contributor

Re: PIF vs. Minimum Balance!!!!

>1% and <9% on only one card seems to be the consensus.

  • Current: EQ FICO 706, TU FICO 701, EX FICO 706 | Starting Score: 525 (05/2012)
  • Starting total revolving credit: $1100 | Current total revolving credit: $36,700
  • Inquiries (12 Months): EQ 2 TU 1 EX 1 | Most Recent: 1/21/2014
Chase Freedom $9500
DCU Visa $10000
Capital One QS $2000
AMEX BCE $3000
Lowe's CC $8500
WalMart CC $3100
BOA Platinum $600
AMEX Gold NPSL
Message 5 of 14
Valued Contributor

Re: PIF vs. Minimum Balance!!!!


GABrown wrote:
why do some people say let a little balance carry over for reporting purposes? what does that mean?

Because people don't understand the FICO model.

 

You do not need to carry a balance. If you are using your card and paying in full, your card will still report a balance. The balance reported by your bank will impact your utilization ratio. Figure out when your card reports. Pay down the balance before that day to an amount between $5 and $45. So if your balance was $200, you will need to pay at least $155 before it reports the balance. Otherwise your utilization will bring down your credit score.

 

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Message 6 of 14
Super Contributor

Re: PIF vs. Minimum Balance!!!!

Also...reporting a 1-9% balance does NOT need to be done every month. This is only "necessary" (and I quote necessary because it isn't really necessary to do at all) if you plan  on applying for something during that time. Also, as dustink said, REPORTING a balance is different than CARRYING a balance. 

 

In all honesty, if you are just trying to build a good history with you lender, PIF every month. Carrying a balance doesn't only cause an issue with FICO (because of high util), but it also means you're accruing interest. (unless you have a 0% offer)

Message 7 of 14
Valued Contributor

Re: PIF vs. Minimum Balance!!!!


jsucool76 wrote:

Also...reporting a 1-9% balance does NOT need to be done every month. This is only "necessary" (and I quote necessary because it isn't really necessary to do at all) if you plan  on applying for something during that time. Also, as dustink said, REPORTING a balance is different than CARRYING a balance. 

 

In all honesty, if you are just trying to build a good history with you lender, PIF every month. Carrying a balance doesn't only cause an issue with FICO (because of high util), but it also means you're accruing interest. (unless you have a 0% offer)


+1


This process maximizes your credit score, but isn't really necessary at all.

 

I never went through it. My first credit card had a $300 limit, and I put $2500 through it every month. My utilization was not good on that card, but it didn't cause me any problems with getting a CLI and future cards.

 

Utilization changes every month, so don't stress over it if you aren't going to be apping for anything the next month.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Message 8 of 14
Contributor

Re: PIF vs. Minimum Balance!!!!

Minimum payment due = interest to be paid = as well as burning money. I'm PIF for a while now and only allow $5-10 to report on one card if I want to apply for something in the short-term. IMO, if you aren't taking a loan, mortgage or app for new CC, you are better off PIF. Since big purchases/loans should be planned ahead in advance you should have enough time to play with the Util % to maximize the score.

As of Feb: AAoA 1 year, 10 months
CK TU: 740; Wal-Mart TU FICO: 721
CS EX: 715
8 CCs, 15 total accounts.
Negs on report: 1 30 day late aged 3 years
5 inquiries
Message 9 of 14
New Contributor

Re: PIF vs. Minimum Balance!!!!

Thank you all for the responses..I don't plan on maxing out the card anyways so PIF is what I will do..I just thought for reporting purposes and to show I was using the card there needed to be some type of balance..Thanks for the clarifications..Much appreciated!!!!
Message 10 of 14