Does this even affect my Score??????

[cp79]

I have very old derogs on my CR which are maybe 4 to 5 years old. All of my accounts from 2 years ago to present are in good standing this include 3 CC and 1 auto loan. I was making the mistake of using the full balance on all CC but paying it in full each months thinking this would look good but I was wrong. I am currently paying each card off little by little so that it doesn't look like I'm living off credit. My Question is do I just pay off all derogs? I am in no rush for my credit score to go up now but would like to have my score in the upper 600's to lower 700's in the next 2 to 3 years. Since I'm hoping to have enough money saved by then to put down on a home and I would hate to get denied for a loan for having bad credit.

[Anonymous]

Does what affect your score?

High utilization? Yes

4-5 year old derogs? Yes

You can use what you want on your CC, just pay them down before they report. Utilization is 30% of your score.

You want less than half reporting a balance, and your overall and individual utilization to be between 1-9%.

Message Edited by sidewinder on 04-10-2009 08:57 AM

[natasjlp]

I see that everyone says util should be between 1%-9%. What if I have 0%? I don't right now but that is what I am aiming for. I would still use the cards every so often, but I would PIF almost immediately. Is that bad? Should I consistently leave like a $10 ballance on there or something? How does that affect my credit?

I pulled my CR and it shows some CCs that have 0% balance but shows 'OK' in the paid area every month even though I don't use it. What is the difference - how should I be using my CCs to maximize my FICO score?

[Anonymous]

If all of your revolving accounts report a $0 balance and you have 0%  utilization, you will get a ding from myFICO.

The scoring formula considers how well you manage credit, if you aren't using any credit then you aren't managing it.

Let at least 1 account report a few dollars.

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natasjlp wrote:

I see that everyone says util should be between 1%-9%. What if I have 0%? I don't right now but that is what I am aiming for. I would still use the cards every so often, but I would PIF almost immediately. Is that bad? Should I consistently leave like a $10 ballance on there or something? How does that affect my credit?

I pulled my CR and it shows some CCs that have 0% balance but shows 'OK' in the paid area every month even though I don't use it. What is the difference - how should I be using my CCs to maximize my FICO score?

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[natasjlp]

that is weird! it would seem to me I would be managing it quite well. So when the CCs report to the CRAs they don't report that perhaps I used the card but then PIF? That sounds like great managment. hmmm...

Now concerning CCCs lowering CLs - could this be due to 0% util? Should I then with that logic have a few dollars in all my accounts?

And would best methodology be use it once at say like BK for a burger and leave it on there until the next billing cycle - pay it off the go to BK again?

Shouldn't I only have to have a balance on there when the CCCs report to the CRAs then I can PIF? How do I know when the CCCs report?

Also I noticed that when I purchase something on my CC it doesn't show a 'balance' for awhile. My CL is lower and it shows a purchase but how does that work - when does it show a 'balance' so they can report it to the CRAs?

[Anonymous]

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natasjlp wrote:

that is weird! it would seem to me I would be managing it quite well. So when the CCs report to the CRAs they don't report that perhaps I used the card but then PIF? That sounds like great managment. hmmm...

If you use the card and PIF before they report, it will indicate activity to the CRA-- but not a balance reported. You want accounts to report some activity every so often, as accounts who go inactive after so long can be excluded from scoring. The exact time it takes for an account to go "inactive" is not known(it is a secret).

Now concerning CCCs lowering CLs - could this be due to 0% util? Should I then with that logic have a few dollars in all my accounts?

And would best methodology be use it once at say like BK for a burger and leave it on there until the next billing cycle - pay it off the go to BK again?

Shouldn't I only have to have a balance on there when the CCCs report to the CRAs then I can PIF? How do I know when the CCCs report?

Different CCC report at different times. For example, HSBC reports on the last business day of the month and reports your balance that day. Credit One reports your balance on the day it cuts the statement. Others report at different times. Some searching on the CC forum might let you know when these report, or studying your reports/CC statements/balance history/etc can help you. You can also call and ask--- some will tell you. You are correct, once it reports- PIF and its ok.

Also I noticed that when I purchase something on my CC it doesn't show a 'balance' for awhile. My CL is lower and it shows a purchase but how does that work - when does it show a 'balance' so they can report it to the CRAs?

Pending transactions are not always included in balance. Until the transaction actually post to your account, it will decrease your available credit, but not increase your balance. I think this is what you are asking.

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[natasjlp]

Thanks for your detailed info - so still some questions.

Lets say to be safe for 'account activity' I use each credit card I have once a month - on whatever, piece of gum etc... If the CCCs report activity to the CRAs yet my util is 0% because I PIF immediately - will my FICO score still take a hit? is it reliant upon having a 'balance'? And if so does the amount of the 'balance' matter? things like high balance as opposed to CL?

[Anonymous]

If all of your cards report a $0 balance-- yes you take a hit.

Activity and utilization are seperate things.

Utilization is based on reported balances in relation to your CL.

For example, one member finds they get the most points for letting just one card report a $5 balance. However, this would vary by each person.

Once you get all negatives removed that you can and your cards paid down(unless you are going to be applying for a mortgage or something) you might play around, letting different amounts and different numbers of cards reporting balances and track your scores to find your best score scenario.

Message Edited by sidewinder on 04-10-2009 12:34 PM

[natasjlp]

gotcha - so it sounds like there is no hard and fast rule concerning util/activity/balance ratio for multiple cards and FICO score improvement? more cryptic and cryptic more so - - - -

concerning CCCs reducing your CL - do they take into consideration balance or just activity. I know now FICO is more concerned with having a balance, as opposed to 0% or perfect util and not just 'activity'. Maybe CCCs are the same? Probably varies per CCC?

How about going for a CLI with a CC? I know lenders like to see high CLs - how do CCCs see balance as opposed to util and high balance? I know this is probably a small consideration for CCCs to give a CLI, but while we are on the subject. again, prob varies on CCC?

[Anonymous]

I'd post those questions over on the CC forum.

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natasjlp wrote:

gotcha - so it sounds like there is no hard and fast rule concerning util/activity/balance ratio for multiple cards and FICO score improvement? more cryptic and cryptic more so - - - -

concerning CCCs reducing your CL - do they take into consideration balance or just activity. I know now FICO is more concerned with having a balance, as opposed to 0% or perfect util and not just 'activity'. Maybe CCCs are the same? Probably varies per CCC?

How about going for a CLI with a CC? I know lenders like to see high CLs - how do CCCs see balance as opposed to util and high balance? I know this is probably a small consideration for CCCs to give a CLI, but while we are on the subject. again, prob varies on CCC?

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