Interesting to note that on my CRs for a particular TL, the highest reported statement balance has never been more than $900 on a $3k limit, but the high balance is $2800.
Hover over card to see limits
@Revelate wrote:
@user5387 wrote:
@xsvspd wrote:I've just looked over my reports, and on all three theres a spot where the revolving account show that has "High Balance" - EX, TU, "High Credit" - EQ in addition to "Credit Limit". I'm just not sure why. Does anyone frequently use their cards to the limit, and PIF? I don't understand why a creditor would care as long as you PIF every month. It's pretty tough to keep less than 10% or whatever on a card that only has a $300 limit.
Again, I understand utilization when it comes to your statement date, and I'm all for it, especially to maximize your score. But does it matter if you're not?
Suppose that a year ago you were totally maxed out on credit, and today, your utilization is 1%.
FICO utilization scoring will give you high marks, but some creditors may wish to know what life was like in the bad old days.
Flip side is true too: if someone doesn't use their card (ignoring Annual Fees for this discussion) the lender doesn't make any money. The higher the high balance, the more use the card has seen, the more money someone made off that customer... and possibly you (the lender) might as well.
High balance isn't all negative by any stretch of the imagination, I still routinely max out my high balance on a given card (becoming harder to do as my tradeline size increases admittedly in a single month) and this used to be standard practice in the old days where limits weren't reported anyway.
Additionally, high balance can demonstrate responsible use of credit: who's more trustworthy in a lender's eyes, someone who never used the card for much of anything, or someone who used it heavily, and then paid it off without lates or any derogatories? In my estimation it's the second category, combine that with being more profitable, and I don't see the negative bit at all... negatives are covered by all sorts of derogatories on payment history, high balance isn't a derogatory item.
Now this makes sense. Thank you. As a lender, I would be more inclined to grant a CLI to someone who's used what they have, and most of the available, responsibly. But I can also see how they can view it as more of a risk. But, as with all lenders, YMMV.
I wish I knew the best practices for using my cards to entice lenders to grant CLI's. It seems to be a catch 22. You get the credit you don't need, with some lenders. With others, they like to see heavy usage / PIF.
I'm still a little new to credit, just recently breaking the 700 barrier from 500's a year ago.
@xsvspd wrote:Interesting to note that on my CRs for a particular TL, the highest reported statement balance has never been more than $900 on a $3k limit, but the high balance is $2800.
A lot of lenders (not all) will report highest balance on any rolling day window or something to that effect; some only will report statement balance, but the former is unquestionably a more accurate practice.
