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Regular Contributor
Posts: 135
Registered: ‎01-29-2013
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Reporting High Balance?

While it is encouraged to PIF before a statement cuts, is there a benefit to let a statement cut with a high balance reported to the CRA? Does it show future lenders that you can responsibly pay off your high balances, thus giving a positive effect on your credit? I currently have a pretty high Balance at over 50% util on my Freedom and am thinking whether I should pay some of it down before it reports. I'm not planning to apply for any more credit as I am in the garden and recently approved for a Barclays last week. Any
advice?
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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: Reporting High Balance?


wche wrote:
While it is encouraged to PIF before a statement cuts, is there a benefit to let a statement cut with a high balance reported to the CRA? Does it show future lenders that you can responsibly pay off your high balances, thus giving a positive effect on your credit? I currently have a pretty high Balance at over 50% util on my Freedom and am thinking whether I should pay some of it down before it reports. I'm not planning to apply for any more credit as I am in the garden and recently approved for a Barclays last week. Any
advice?

it helps show usage, so in a way it's a good thing.

if you are not planning to apply for any new credit, feel free to let high balances report. Just don't drag high balances while making only minimum payments for extended periods of time, and you should be fine.

 

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Regular Contributor
Posts: 135
Registered: ‎01-29-2013
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Re: Reporting High Balance?

Thanks enharu! Since I got approved for Barclays arrival last week, should I be concerned if they see a 3300/5400 on my Freedom and a 1450/3000 on my Discover (0% promo) if they SP me?
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Valued Contributor
Posts: 3,096
Registered: ‎01-26-2012
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Re: Reporting High Balance?

High balance not used in FICO scoring except for rare cases (where no limit is shown for card.  It is then used as the card "limit," but only under certain circumstances).  However, who knows how high balance might be used for other internal scoring models or CL determination etc.  I would think it would look good under manual review.  Remember there is no standard for high balance reporting which might be why no one publically says they use it.

 

The important thing to remember about utilization is that FICO score is a snapshot of your credit in time.  Since utilization is so easy to change, you can worry less about managing it unless you are planning a credit event in near future.  So in OP's case, I would allow high balance to report unless they have credit event coming up.  Yes OP's FICO will drop, but when it reports with low balance next month, his/her FICO will bounce right back.

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Moderator
Posts: 27,205
Registered: ‎09-13-2012
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Re: Reporting High Balance?

As enharu stated, a high balance can be good for usage. However, it is a double edged sword. High util can adversely effect auto CLI's (SP's) . If you are carrying balances, I'd try to minimize the time if you are concerned with SP's.
Valued Contributor
Posts: 1,367
Registered: ‎04-20-2012
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Re: Reporting High Balance?

Pure speculation on my part, but I suspect showing the occasional high balance may increase your odds of receiving targeted offers. I've seen anecdotal evidence of it personally, and it logically makes sense (CCCs want to target big spenders). I made a thread about this idea here: http://ficoforums.myfico.com/t5/Credit-Cards/Spiking-Utilization-to-Trigger-Targeted-Offers/td-p/227...

 

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Valued Contributor
Posts: 1,414
Registered: ‎09-01-2011
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Re: Reporting High Balance?

[ Edited ]

I thought lenders determined usage by Date of Last Activity? I don't think HB plays any role in systematic decisions but probably even manual. I have never seen anyone approved or declined because of what's reported as the high balance.

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