10-31-2012 12:11 PM
10-31-2012 12:28 PM
I think it is also import to note two other critical times where PIF prior to statement being cut is important:
1. early stages of rebuild - your scores may be down due to problem accounts. The easiest way to bump your scores is to keep UTIL down. Once you have dealt with problem accounts the little you may lose scorewise from UTIL if you let some report isn't as bad as it is in the early game.
2. When you add several new accounts - during these times your new CC lenders will be SPing you like mad. Keep your UTIL down will help keep away an adverse actions (such as CL Decreases or closing accounts) and will set you up for your initial CLI requests.
(3. already mentioned earlier. Always keep UTIL down if you are about to app for something like a mortgage and keep it down so you avoid paying interest charges on cc's)
10-31-2012 01:14 PM
The oft repeated advice to pif before a statement cuts to maximize FICO is often counterproductive.
1. If you prepay in full then the CRA reported balance is zero. To other creditors it looks like you simply aren't using credit. This makes you less attractive to other potential issuers.
2. A long series of zero balances can actually impact your score negatively because scoring algorithms start to consider the CL dormant.
Let balances report and manually pay or set up autopay to pif. You don't pay interest but other creditors will know you are using credit - a good thing. A month or two before applying for credit it would be wise to prepay all balances except for one card but prepay it down to under 5%. This does produce the best FICO score but only if not a matter of routine so should be limited to the time just before apping.
10-31-2012 01:24 PM
I rotate which card(s) I allow to report a balance. If I'm not apping anytime soon and not in phase where I'm being SP then I plan on having more cards report balance at same time. RIght now I need every point I can get and with so many new open lines of credit I want to show management of those lines. After I get my NFCU card I'll have 8 cc's. I plan on letting two cards report a balance every month and the other 6 will be zero balance. Every three months I'll change which cards report a balance so by the end of the year each card would had a reported balance for 1/4 of the year.
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