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Established Contributor
Posts: 985
Registered: ‎09-10-2012
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What do credit card companies REALLY want???

I have been trying to figure how this whole credit thing ever since I have been a member here and rebuilding my credit after so many years without any credit at all. I am very happy with all the cards I have and they all serve a purpose and I plan to use them well. I have read through several posts of people saying to pif before the statement cuts and to never run a balance. Then I would read that doing it that way was most important if you were planning on applying for some sort of credit in the near future. But then I read about people getting their cards closed for no reason or from not using it enough, etc. I know cc companies want you to use their card the most and obviously pay them but......do they really want you to pif each month to show you are a good customer or do they want you to run a balance to make interest? I have let a few balances hit on my credit and then pif and then I've pif other before the statement has cut. So what really is the best way to insure your cards stay open, you stay in good standing and receive cli's? (other than the obvious "paying them"). I just don't want to risk any of my cards being closed so I don't know what is the best way to show they are being used and being paid. Some of the accounts I paid in full do not even cut a statment if the balance is 0.00 so they are not reporting to my credit and I don't like that.

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Posts: 5,179
Registered: ‎12-11-2011
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Re: What do credit card companies REALLY want???


snowkitty wrote:

I have been trying to figure how this whole credit thing ever since I have been a member here and rebuilding my credit after so many years without any credit at all. I am very happy with all the cards I have and they all serve a purpose and I plan to use them well. I have read through several posts of people saying to pif before the statement cuts and to never run a balance. Then I would read that doing it that way was most important if you were planning on applying for some sort of credit in the near future. But then I read about people getting their cards closed for no reason or from not using it enough, etc. I know cc companies want you to use their card the most and obviously pay them but......do they really want you to pif each month to show you are a good customer or do they want you to run a balance to make interest? I have let a few balances hit on my credit and then pif and then I've pif other before the statement has cut. So what really is the best way to insure your cards stay open, you stay in good standing and receive cli's? (other than the obvious "paying them"). I just don't want to risk any of my cards being closed so I don't know what is the best way to show they are being used and being paid. Some of the accounts I paid in full do not even cut a statment if the balance is 0.00 so they are not reporting to my credit and I don't like that.


GE won't do a visible statement if you report a $0.00 balance, and I've heard of people getting shot down with the "Not enough experience at your current credit limit" excuse when they request a CLI. I try to report a balance on my 2 GE cards just in case of that. I'm in the garden so I'm not worried about my util right now since I have no intentions of applying for everything, and I know i'm going to pay off all of my balances in full, so I'm not getting into a spiral debt situation. 

 

When it comes down to it, if you have no intentions of applying for anything, it really doesn't matter if you report a balance or not. I usually do just because it is easier, and in a year or so when I'm out of the garden, I'll step my game up and get it all down to the 1 card reporting a <10% balance and whatnot. 

 

As long as you aren't maxing your cards out I don't think you'll have any issue :smileytongue: 

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Moderator Emeritus
Posts: 10,924
Registered: ‎12-30-2011
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Re: What do credit card companies REALLY want???

I think that varies so much by individual lender.

 

I'm not certain they care too much as long as:

1) you use their card

2) you pay regularly and on time

3) you don't allow large balances to hangout just making the minimum payment.

4) keep your behavior predictable

 

It's really hard to say, but honestly I think increasing FICO is waaaaay more important than any individual lender.  I'll get the limits I need at some point, I don't have any reason to focus on them explicitly.   Credit cards were designed for short-term float, they weren't tradtionally for carrying large balances for an extended period.  There's usually better ways to finance such things (if you have the credit to do so).

 

Maybe the biggest key factor is just making certain the bank *thinks* they're going to get paid back.  I'm not really certain how to game this, but lenders tend to look for irregularity in customer behavior.  If you have a certain manner of doing things, it's usually to your benefit to continue to do so; however, the financially smart way is to PIF regardless, and I think banks do tend to judge customers by how responsible they appear to be.  I've heard mortgage lenders want to see consistency, and BOFA wanted to talk about my inconsistent behavior over a 3 month span that I carried a balance at my secured graduation time.

 

End of the day, do what makes sense for you.  FICO doensn't care except instant in time, but it's usually in one's best interests to simply PIF either pre or post statement, so doing that is probably one's best course anyway... and once you start PIFing, keep doing so when you can.  If you let a balance report, ain't no big thing, as long as it gets paid.... unless you need your FICO pretty for an application, in which case absolutely strike that balance before it reports.  Revolving utilization is too big a factor to unilaterally ignore.

 

Rambling incoherent post, my apologies.

 

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Senior Contributor
Posts: 6,260
Registered: ‎08-16-2012
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Re: What do credit card companies REALLY want???

I think it's okay to carry a balance, just dont max out cards. Personally, I think pif before the statement date is a little outdated...unless it would affect your util... Which is why high limits are important. Banks need to make money off of you, and it's nice to let them make a little money off of you..say a couple of dollars here and there... Just keep util as low as possible, and really consider what credit can allow you and a bank to accomplish together... Basically, credit cards are investment vehicles for banks...so they're looking for a return on capital... Pif before the statement cuts can get you denied for "not enough use of revolving credit"...

Hope that helps.
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Valued Contributor
Posts: 3,099
Registered: ‎10-02-2012
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Re: What do credit card companies REALLY want???


youngandcreditwrthy wrote:
I think it's okay to carry a balance, just dont max out cards. Personally, I think pif before the statement date is a little outdated...unless it would affect your util... Which is why high limits are important. Banks need to make money off of you, and it's nice to let them make a little money off of you..say a couple of dollars here and there... Just keep util as low as possible, and really consider what credit can allow you and a bank to accomplish together... Basically, credit cards are investment vehicles for banks...so they're looking for a return on capital... Pif before the statement cuts can get you denied for "not enough use of revolving credit"...

Hope that helps.

PIF after you get your statement. Utilization still reports, and banks are still making "bank" off the interchange fee's. Try to get one account reporting around 9% utilization each month for optimal score.

 

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Valued Contributor
Posts: 1,962
Registered: ‎01-24-2012
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Re: What do credit card companies REALLY want???

As long as you use the cards for something every now and then, they will not be closed.

 

Letting a balance report is not that big of a deal, unless you plan on applying for another card or a type of loan. Otherwise, you can let the cards report each month. I usually pay before the statement closes because I never know when I may want to ask for an increase, or a really good sign up bonus will come along. These past two months I let a few report and am at 18% utilisation right now. That will go down some once new limits report, but I am not worried at all.

 

Never carry a balance because you think it will make a lender happy; that is throwing away money. If you can not help it fine, but otherwise, no.

 

The best thing for a credit limit increase is just time. The longer you have the card, the better your chances. Use it and pay it off on time and you should have no problem getting an increase, as long as your reports are fine.

Established Contributor
Posts: 792
Registered: ‎08-30-2011
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Re: What do credit card companies REALLY want???

I would never let a balance revolve just to give the bank my hard earned money.  I have never paid 1 cent to all the lenders in my sig.   Pay your bills on time and in full, that  is how to get big credit lines.  I only revolve a balance on my GE Amazon account with 0%. 

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Valued Contributor
Posts: 1,170
Registered: ‎07-18-2009
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Re: What do credit card companies REALLY want???

These days it's what bank's computers want. They balance risk against expected profits. They generally tolerate larger risks on accounts where the expected profits are larger. FICO scores are risk scores and don't address the profit side. FICO (the corporation) also provides capacity scores that estimate how much additional credit can be safely extended. This side of FICO is rarely discussed (except amongst bankers) but is very important and really second only to FICO risk scores.

 

A big problem with prepaying, instead of PIF after the statement cuts, is that usage from CRA's reports is lacking and it appears the consumer has outstanding credit that they simply don't use. Banks can't make money extending unused credit. Used judiciously, prepaying on most cards can optimize a FICO score but doing it all the time will kill your capacity scores and decrease how much profit a bank can expect to make from the consumer.

 

 


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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Regular Contributor
Posts: 144
Registered: ‎03-19-2012
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Re: What do credit card companies REALLY want???

Do whats best for you and your benefit. Credit card companies think business, we are just a number. Just use the card and pay and everyond is happy.
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Registered: ‎08-16-2012
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Re: What do credit card companies REALLY want???

+1 to all!
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