04-02-2013 06:32 AM
04-02-2013 07:32 AM
Last month when I only had 2 cards and not 5 I used to pay both off almost weekly, and make sure to not have a balance when my statement cut.
Now that I have 5 cards and have been reading on here that 1-9% is ideal and 0% isn't
I am wondering if I just set up all my credit cards to be paid in full, (through the auto pay on all of them, so it will be after the statement cuts)
If having 4 or 5 cards report with a balance is a bad thing?
9% of my credit is around 2k, so I'll never spend that much, so I don't need to worry about going over the 9% but will having multiple cards post with a balance be a bad thing? Should I pay off some in full before the statement and let one or two have auto pay?
Its best to only have one, maybe two showing a balance. I believe the number of accounts carrying a balance is factored into the score, 1 being the best.
04-02-2013 07:40 AM - edited 04-02-2013 07:41 AM
As the scoring process doesn't care about utilization history, you need only consider utilization when you are going to app for something. I think it's a good idea to have all cards on auto-pay, (to avoid interest/late charges/penalty rates if you forget to pay) and then, when you think you will be apping do the "PIF on all but one card, before the statements cut" Of course this needs some lead time, as each card reports just once a month.
04-02-2013 08:20 AM
04-02-2013 08:33 AM
I understand utilization has no history, so having them all on auto for that reason will make no long term difference, But does the affect using more than one credit card in a month has on my score have a history? As in if I use all 5 and just use auto pay so they all post with a balance for a year and then decide I want to apply for something I pif before the statement ends on all but one, it wouldn't matter I was using more than one for that year right?
Right. (And remember this is all "As far as we know" since FICO doesn't reveal all the details). So the understanding is that your credit report gets pulled and one of the factors is "How many accounts have a non-zero balance". This is just a snapshot at the time the report is pulled, so no history.
I don't know why some things don't have history, maybe they found that doing so isn't very predictive. Obviously some things need to have history, I want to see if you were late in the past, or had a BK etc. Knowing that you didn't have a BK THIS month is probably not enough for some of those picky lenders!
04-02-2013 09:05 AM
04-02-2013 10:09 AM
From what I understand, for short term scores, you want to be between 1-9%
but long term your Utilization doesn't matter because there is no history so if you have 75% utilization one month your score may go down, but if you pay it down to between 1% and 9% it will go back up.
It is my understanding that unless you are going to be applying for something in the coming month you do not need to worry about your utilization.
But remember it can take over a month for the new balances to be on your report
04-02-2013 10:17 AM
In The Garden!
04-02-2013 10:23 AM
I believe it's no MORE than 9%.
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