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Posts: 3,367
Registered: ‎10-19-2012
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Re: Should I ever let more than 1 card report a balance?

LS2982 wrote:
If your not applying for new credit it does not matter how many cards have balances.

Just make sure you watch interest on the balances.



And if you're applying, don't keep a balance on more than one card. 

Valued Contributor
Posts: 1,086
Registered: ‎02-06-2013
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Re: Should I ever let more than 1 card report a balance?

   You really only have to worry about that one card utilisation thing during a time period where you are going to be applying for new credit or a loan. The effects of utilisation are not cumulative. A fico score is just a snapshot of your credit report at a specific moment in time and your score does not remember if 2 months ago 2 cards reported or if one of them had a big balance. It is just a formula which is applied to a snapshot of your credit report at one moment in time. The rest of the time it may be beneficial to keep more than one with a balance on the statement date. Some cards want to see a balance every month for the quickest route to a CLI like Discover. Some people have also found that in their specific situation they get higher scores when 2 of their cards have balances.

      That thing about having just one card have a balance and that balance being less than 9%. Well that is just a generalised rule of thumb. Individual's situations may vary by scorecard, or bucket. The sensitivity of score to number of cards reporting a balance varies depending on the aaoa per card also. A major inflection point is around the 4 year mark. At that point many people firnd their scores are way more sensitive to number of cards reporting a balance then at say the 6 month mark. 

    If you stick to general principles then your scores will generally be good. if you want specific precise details about your own situation, I would suggest trial and error to see how your specific situation reacts to changes. The thing about fico scores is that the actual formulas are proprietary to Fair Isaac and unknown. People are grouped into different buckets or scorecards and each scorecard has different formulas which apply. Thus it is very difficult to say exactly how your score will react to a specific variable changing because there are a lot of variables involved.

      I try to keep the big picture in mind. That for me is that if I practice responsible long term habits of paying on time and in full then my scores will be good in the long term. Good luck.

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