Improving payment history

[Anonymous]

I've read multiple times that optimal utilization is one card reporting >9% and the rest showing $0 by the time it's reported.

But for those of us who have marred payment history, does $0 balance do anything for us? Is it better to have a small balance reported and than pay it off? Thus making one more notch in the paid as agreed column?

[Anonymous]

That advice is given when someone is trying to MAXIMIZE their scores, like right before applying for a mortgage or a car loan. 

You do want a mix of credit ... three revolving (credit card accounts) ... and one installment (car/mortgage) is ideal, but if you don't have it, there are ways to get it. 

As for the history ... there's little you can do about it now. I've tried, unsuccessfully, to have late payments deleted by prior creditors and have never been successful. So I stopped focusing on that and focused on paying all my bills on time each month. As the credit lines age, the late payments will age off. As for carrying a balance versus reporting zero, it doesn't matter. What matters is that monthly payment being noted in your credit report (and it reports as paid on time, even if you don't carry a balance that month). 

Just avoid paying interest ... especially while rebuilding. 

[Anonymous]

Thank you! This is very helpful. Didn't realize no balance is reported as paid on time.

[Anonymous]

Is there a standard point in time or a point where you saw the lates have less of an impact on your score? I know reporting time is 7 years but several threads back, someone mentioned diminishing impact after 2.5 years.

[Anonymous]

Yes your score will rise as lates age after one, two, three years. However if a lender tends to reject applicants for a bad mark that is their discretion. Some do not care if it's yesterday or six years ago. My scores before a huge UTIL and new accounts hit were hitting 722, 2 out of the 3 bureaus with charge-offs and lates showing.

[gdale6]

Actually its 9% of a single cards CL or less to let report for best Fico, you will have to find the actual percentage that gives you the best Fico score.

[RobertEG]

Utilization of credit (of which % util of revolving is the major component) and payment history are separate scoring categories.

Payment history is the highest weighted, but util of credit is the second highest.

Yes, maintaining or improving util scoring is still important for those who have marred payment history.

[Anonymous]

One thing to add… if using a store card or two to build history with.. some of them do not report to CRAs f they are paid off. Youll be peppered with grey boxes in your reports. I have a bunch of those but I have a thick file dating back 20 years. My Valero gas card, Comenity Banks, and occasionally synchrony do not report if they are paid off