Starting Score: EQ 717 EX 724 TU 736
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.
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)
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.
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