Carrying High Credit Balances

[Anonymous]

Hi all,

My Experian score is 793. I work as a consultant and have to travel for work. As a result, I carry pretty high balances each month (20%-33%). Earlier I used to pay off multiple times a month and keep my balances below 10%. This was reflected in my credit score as well. Now I want to keep some cash handy on top of the 20% downpayment and closing costs as I know the costs can add up in the worst case scenario. Will carrying a higher balance affect my credit score/report that much? Also do I need to pull out my other scores as well?

TIA!

[RW771]

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@Anonymous wrote:

Hi all,

My Experian score is 793. I work as a consultant and have to travel for work. As a result, I carry pretty high balances each month (20%-33%). Earlier I used to pay off multiple times a month and keep my balances below 10%. This was reflected in my credit score as well. Now I want to keep some cash handy on top of the 20% downpayment and closing costs as I know the costs can add up in the worst case scenario. Will carrying a higher balance affect my credit score/report that much? Also do I need to pull out my other scores as well?

TIA!

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I would try and keep them as low as I can. I'm assuming your Experian score is a FAKO score since the only way to obtain your true EX FICO score would be through a bank/financial institution?

I would begin by pulling both of my FICO scores through this site (both TU and EQ) to get an idea where you're currently at. I'd go through and make sure everything being reported on both reports is accurate and from there you can kind of guess where you should pay your CC's down to. When I paid my CC utilization way down ( I paid 2 cards completely off and left the last one at $5 balance) my scores increased quite a bit. Of course it differs in each case by case basis and everything else in your CR will play a part in creating your credit score. I understand needing to save as much as you can for your DP, so if your scores are well within the range your lender requires, paying your cards all the way down/off may not be necessary for you. Low utilization is the key, however, so try keeping them below 9% if at all possible, IMO.

[Anonymous]

I apologize, that would be my EQ score then. I got it through Score Watch. All that is being reported there is correct apart from a typo in my name. Should I correct that at this point? I'm looking at closing some time in January.

As far as paying down is concerned, I'd have to choose between higher CC balances (at the cost of losing some credit score points) and having a cushion for reserves and incidentals. Which is more important?

[RW771]

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@Anonymous wrote:

I apologize, that would be my EQ score then. I got it through Score Watch. All that is being reported there is correct apart from a typo in my name. Should I correct that at this point? I'm looking at closing some time in January.

As far as paying down is concerned, I'd have to choose between higher CC balances (at the cost of losing some credit score points) and having a cushion for reserves and incidentals. Which is more important?

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Personally, I wouldn't dispute anything right now if you're looking to go to the bank here in the next few months or so. Even thought it's just your name, there shouldn't be any reason that would have any bearing on you getting approved, plus I've had CRA's change other things that weren't even being disputed once a dispute was initiated!!

Paying your CC's down or not really is up to you. If you really feel like your scores are ok and you're not borderline as far as needing to have those few extra points, then maybe saving and having that "cushion" is a good idea. I was on the other side, where I was worried my score wouldn't quite be where I needed it to be, so I paid down all my CC's to maximize my point value the best I could. Since that was your EQ FICO, it looks pretty good. EQ is always my lowest score, so I always used that as the bottom line when making decisions. EX always seems to be my middle score, so it was such a pain not being able to know where I truly stood with them, so I'd pull my TU since it always seems to be my highest and figured I was somewhere in between EQ and TU for my EX.

[p-]

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@Anonymous wrote:

Hi all,

My Experian score is 793. I work as a consultant and have to travel for work. As a result, I carry pretty high balances each month (20%-33%). Earlier I used to pay off multiple times a month and keep my balances below 10%. This was reflected in my credit score as well. Now I want to keep some cash handy on top of the 20% downpayment and closing costs as I know the costs can add up in the worst case scenario. Will carrying a higher balance affect my credit score/report that much? Also do I need to pull out my other scores as well?

TIA!

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You're well above the cutoff for prime offers, so you have a bit of wiggle room.  I would recommend a couple of approaches.  

First, if you have time (a few months) try letting the balance go up, and see how it affects your score.  If it drops too far, pay it immediately.  Be careful, though, it could take a statement or two before the new low balance is reported.  Look at your report to see when they report to the CB's.

Or, you could play the balance game with a couple of cards.  Take two cards with different statement cutoff dates.  Let's say card 1 cuts off on the 5th, and the other on the 20th.  Start the month using card # 2 for your expenses.  As soon as the 5th comes along, and the statement cuts on #1, start using it for all of your expenses.  Don't pay, and keep the money in savings until just before the 20th.  Then, send payment in full to card #2 in time to clear before the cutoff.  As soon as the statement with 0 balance is issued, start using Card # 2.  Wait to pay off card #1 until just in time before the statement cuts, then shift back to using it again.  This way you can keep an active balance shifting between two cards, but never actually rack up interest charges or show a balance on your credit report.  Be careful, though, this can backfire if you get the payment in too late, or have an interruption in income.  

Good luck!

[Anonymous]

If I had the presence of mind, I'd have played this "game" a while back. I'm looking to close some time in the beginning of Jan.

I got the scores that were pulled by my broker

EQ - 00789 BEACON 5.0 FACTA

EX - + 0762 FAIR ISAAC

TU - 00782 FICO RISK SCORE, CLASSIC

And these are my wife's scores

EQ - 00750 BEACON 5.0 FACTA

EX - + 0765 FAIR ISAAC

TU - 00748 FICO RISK SCORE, CLASSIC

[p-]

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@Anonymous wrote:

If I had the presence of mind, I'd have played this "game" a while back. I'm looking to close some time in the beginning of Jan.

I got the scores that were pulled by my broker

EQ - 00789 BEACON 5.0 FACTA

EX - + 0762 FAIR ISAAC

TU - 00782 FICO RISK SCORE, CLASSIC

And these are my wife's scores

EQ - 00750 BEACON 5.0 FACTA

EX - + 0765 FAIR ISAAC

TU - 00748 FICO RISK SCORE, CLASSIC

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It can be a little tricky, and it only works if your monthly expense spending is high enough to keep turning over the balance.  Plus, unless you really do keep the money in savings you risk the old familiar credit trap.  

I'm doing it now with all of my spending, even gas, groceries, etc. so I can get the rewards points on the cards without having a balance show at statement time.  It works pretty well.