Reply
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: Too many accounts with balances. New discussion.



rifleman wrote:
I am starting to think I might want to pay off my lowest installment loan as fast as I can. Doing the debt snowball thing. I know it's more prudent to pay off the largest with highest interest rate first, but I lose inspiration to do that as time goes by. I see balances going down, but just not fast enough.

My lowest installment student loan is $3500.00. If I pay it off before the end of the year then I will have just 2 installment loans with balances, and I can afford to report 2 credit cards per month with low balances. That should keep me at a steady 4 accounts with balances. I'm thinking this might be the way to go until the end of the year. It will feel good to have another debt paid in full.

People ask "so what have you been up to?"

"Paying bills" I say


Just keep in mind that you might already have the +18 points if you have 4 or less revolving balances. I was not sure if installments were included. This is why I gave both possibilities for people to try. You can never go wrong however paying off any debt. :smileyhappy:
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Too many accounts with balances. New discussion.

Pizza:
 
There is no way anyone can exactly say (your 18 point example) how many points can be gained or lost with a change on a CR. There's a zillion things going on in FICO's scoring algorithm. I have done exactly what you are suggesting me to do and my scores did not go up or down. Since I have balances on my revolving accounts (3-4% util) my scores went up a little.
Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: Too many accounts with balances. New discussion.



fused111 wrote:
Pizza:
There is no way anyone can exactly say (your 18 point example) how many points can be gained or lost with a change on a CR. There's a zillion things going on in FICO's scoring algorithm. I have done exactly what you are suggesting me to do and my scores did not go up or down. Since I have balances on my revolving accounts (3-4% util) my scores went up a little.



This was the answer I was looking for and why I was asking other people to try it. In this case your input shows that this acts differently for each credit profile. In that case, for others, it can't hurt to try if they run out of other options to improve scores. In my case with out question, the result was 18 points lost/gained. In your case, no change at all. This is interesting too. I wonder what type of action a person has to do to trigger the point loss for too many balances?
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Too many accounts with balances. New discussion.



ilovepizza wrote:


fused111 wrote:
Pizza:
There is no way anyone can exactly say (your 18 point example) how many points can be gained or lost with a change on a CR. There's a zillion things going on in FICO's scoring algorithm. I have done exactly what you are suggesting me to do and my scores did not go up or down. Since I have balances on my revolving accounts (3-4% util) my scores went up a little.



This was the answer I was looking for and why I was asking other people to try it. In this case your input shows that this acts differently for each credit profile. In that case, for others, it can't hurt to try if they run out of other options to improve scores. In my case with out question, the result was 18 points lost/gained. In your case, no change at all. This is interesting too. I wonder what type of action a person has to do to trigger the point loss for too many balances?

It's my understanding that two people can have the same change on their CR and have completely different results. It could be a situation where the two people might be swimming in different "scorecards, pools or buckets." Have you always PIF? It does save money, no question about that!
Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: Too many accounts with balances. New discussion.


fused111 wrote: It's my understanding that two people can have the same change on their CR and have completely different results. It could be a situation where the two people might be swimming in different "scorecards, pools or buckets." Have you always PIF? It does save money, no question about that!

Yes, mostly PIF.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Too many accounts with balances. New discussion.



ilovepizza wrote:

fused111 wrote: It's my understanding that two people can have the same change on their CR and have completely different results. It could be a situation where the two people might be swimming in different "scorecards, pools or buckets." Have you always PIF? It does save money, no question about that!

Yes, mostly PIF.

I wasn't clear to me if you preferred to PIF, now I know. :smileyhappy: Some feel PIF is the way to go if you're not planning on a big purchase in the near future...house, car, etc.
Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Too many accounts with balances. New discussion.



ilovepizza wrote:
Too many accounts with balances.

What does this mean? If you get flagged for this your number of balances combined is hurting your credit score. The balances can be $0.01 cent and up, doesn't matter. From what I have learned the limit is 4 balances before scores drop.

You can use 50 credit cards at the same time and pay them in full. This should report a $0 balance unless there is interest added.

You can use 5 credit cards and pay minimum payment on them. This will leave you with 5 balances.

Questions. If you have open installment loans are they counted in this limit of 4 balances. I don't know. When I tested this I did not have any open installments. Since some people say when they limited to 4 credit card balances and score did not increase it leads me to believe installments might be counted. So if you have 2 installments try to limit other accounts to a max of 2 balances. See if anything changes.

Each time I put a tiny charge on my 5th credit card and carried a reported balance my score dropped -18 points. Paid that one balance off score went up +18 points.

Keep in mind that even if you pay your credit cards in full, if you charge anything new before the CRA update is sent, it will be reported as a balance. This is where it becomes tricky for those that pay in full.

Example.
If your balance was $50.
Your payment due date was 10th.
Statement closing date was 15th.
And that bank reports to the CRAs on the 17th.
And you send in a payment of $50.
And then charge something for $10 before the 17th,
your credit report might show a payment of $50 and a $10 balance.

So just be aware how it works. Keeping under 5 balances can raise your credit score by as much as +18 points as it does in my case.

Please post score changes from your own tests here. Thank you.


I have all my cards cycle within the first week of every month and alternate usage. Never use more than three cards per month. Mortgages car loans and credit cards all count towards the total.
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Too many accounts with balances. New discussion.



rbbyrbsn wrote:
in order for a card to report 0 normaly requires two payments month unless you haven't made any chrages since your last statement cut , or don't charge aything for the rest of the of the cycle after you make payment. just because you PIF doesn't mean your account will report 0 balance, you PIF amount is for the previous cycle, so unless you haven't made any charges the current cycle or you make an aditional payment after you due date to bring the balance to zero and not chrage anything else before the next cycle, you will have a balance to report, but having a balance to report doesn't always mean your paying interest, it's whats called a grace period



I pay a week before the cycle date. Always.
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Too many accounts with balances. New discussion.



fused111 wrote:
Pizza:
I have read similar arguments at CB and CIC, but again I'm not buying it. The reason I have not hit 800 across the board is age and EX. Most of my accounts are less than 2 years old. Besides I will be dead before EX gives me a score over 775.:smileyhappy:



Your Ex will be over 800 by early next year. Have faith and pay off those debts. LOL.
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Too many accounts with balances. New discussion.



snookie wrote:
other wise you have to use credit to get credit and if your CCs are always reporting $0 it doesn't appear your using credit even you are, your just paying it off before it gets reported to CRA
I almost always pay off my cc before next statement cycle. Yes, it does report as $0 balance, however they MUST report to CRA because there has been activity on my account that month. Had there been no activity whatsoever and $0 balance then they are not obligated to report, which is why they show date of last activity. My scores average 780 so apparently it hasn't hurt me :smileywink:



Look at your Experian report. They know you're using the cards. They see more than we see. Believe it.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}