12-09-2012 12:30 PM - edited 12-09-2012 12:34 PM
I recently received a Chase Sapphire Preferred card (it just arrived yesterday) and plan on applying for a Chase Freedom to round out the Chase trifecta so to speak. I plan on splitting all of my monthly purchases on the two cards and PIF before the statement date but am curious if there is any benefit to putting very small charges on my other 2 cards and paying them off monthly. Will it benefit my FICO scores at all to have on time payments being made for these two cards as well?
12-09-2012 05:54 PM
It all depends on your optimal financial goal(s) and your current credit profile. For the benefit of a FICO score, there are a multitude of variables that are taken into consideration (i.e. AAoA, individual credit file, utilization, etc.). Some individuals appear to achieve some optimal FICO scoring leveraging their utilization (reportedly 1%-10%) by letting some accounts report a "calculated/formulated" balance while letting others report zero during any given cycle. Your own results will vary on experience.
12-11-2012 03:07 PM
Certainly, % util on individ cards, as well as the percent of cards reporting a balance enter into FICO scoring, sometimes at cross purposes in scoring.
Having a small balance, some will swear, gives a better scoring of individ card util than does a zero balance, but carrying balances on more than half of revolvings can impact your percent with a balance. its kinda a mystery as to the overall result.
Much more significant, in my opinion, is the view of the credtior. It costs them $$ to manage and maintain open accounts. Seeing no use over an extended period can lead to possible account closure, and might mitigate against any future request for a credit limit increase when not even using existing credit.
I would not sock-drawer a card that you want to keep active in its current credit limit. So, in my opinion, apart from any FICO issues, I would charge and pay at least small balances on a regular basis.