An interesting question came up in the rebuilding forum. Basically the discussing was about how to best utilize a credit card during the rebuilding process and how such usage would be viewed by a mortgage lender.
Basically the question is this - between the following two behavior models, would either be looked upon unfavorably by a lender:
1. User has a low limit ($300) card and he only puts a small charge (<$20) on the card each month and pays it off a few days after the statement date so the card show usage on the credit report, ostensibly to maximize scoring.
2. User has the same low limit card but uses the card for everyday expenses like groceries, gas, utilities, etc, charging the card to near its limit on a weekly basis, but paying it off within a day or two. He leaves a small balance to be reported same as #1 above.
It was noted that 'high balance' as well as 'payments' are reported on a monthly basis for credit cards, so #2 could be easily inferred from those numbers. Is this something a lender would take note of?
