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Member
akhil
Posts: 6
Registered: ‎05-06-2007
0

Conflicting issues

So I have a 6 credit cards & I am planning to buy a car in early 2008. To improve my credit score, I started keeping a zero balance on most of them. and my score rose to 708. But then I read somewhere that lenders want to see that you can *manage* credit instead of just having a ton of unused credit. So, I kept minimal balances on all cards (under $50) and my credit score dropped down to 690. One of reasons mentioned in the score report was "Too many accounts with balances"

What am I supposed to really do ..to get above 720 ?

TIA

-Akhil
Valued Contributor
Boswd
Posts: 1,065
Registered: ‎04-26-2007
0

Re: Conflicting issues

Pay them off again, and then use them to buy something small that you can pay in full.   If you score is better with no or little balance than that is the route I would go.
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Conflicting issues



akhil wrote:
So I have a 6 credit cards & I am planning to buy a car in early 2008. To improve my credit score, I started keeping a zero balance on most of them. and my score rose to 708. But then I read somewhere that lenders want to see that you can *manage* credit instead of just having a ton of unused credit. So, I kept minimal balances on all cards (under $50) and my credit score dropped down to 690. One of reasons mentioned in the score report was "Too many accounts with balances"

What am I supposed to really do ..to get above 720 ?

TIA

-Akhil

There has been a lot of discussion at this forum about the 1-9% util rule.  For me, I keep a 1-9% on three of my five revolving cc's.  It seems to be working for me.  I'm still not convinced 1-9% util on all of my cc's is helpful.
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

Contributor
cinoeye
Posts: 132
Registered: ‎05-02-2007
0

Re: Conflicting issues

MY score droped when my balance was 0%.
 
And than went up on avarage of 10 points just for 1 CC util @ 1%-%9.
 
What cards do you have and do they report your limits.
 
My crap1 does not report limit so I do not use it at all, or if I do I use it until reported and then paid in full.
New Member
3rd325
Posts: 37
Registered: ‎06-05-2007
0

Re: Conflicting issues

The credit br does not report that an account is "paid in full" each month. As a lender I run into this often. When reviewing a customers credit I consider all their monthly debt. Having balances increases your DTI (debt to income, how much much of your income goes to mthly debt). Having balances increases your DTI, it DTI is too high I will decline the customer UNLESS they can prove that the card has been paid off. Having a higher fico is much more important.
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Conflicting issues



3rd325 wrote:
The credit br does not report that an account is "paid in full" each month. As a lender I run into this often. When reviewing a customers credit I consider all their monthly debt. Having balances increases your DTI (debt to income, how much much of your income goes to mthly debt). Having balances increases your DTI, it DTI is too high I will decline the customer UNLESS they can prove that the card has been paid off. Having a higher fico is much more important.


It's the opinion of some the super contributor's at this forum it's best to keep a 1-9% util on all of your revolving TL's.  This is suppose to maximize your FICO scores.  How does one know this for sure?  I noticed the mortgage lenders I spoke with did not mind a bunch of balances as long as they were very low.
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

Valued Contributor
Boswd
Posts: 1,065
Registered: ‎04-26-2007
0

Re: Conflicting issues



3rd325 wrote:
The credit br does not report that an account is "paid in full" each month. As a lender I run into this often. When reviewing a customers credit I consider all their monthly debt. Having balances increases your DTI (debt to income, how much much of your income goes to mthly debt). Having balances increases your DTI, it DTI is too high I will decline the customer UNLESS they can prove that the card has been paid off. Having a higher fico is much more important.



I'm confused by your post, so is it more important to have a high FICO score than it is to have a low DTI?
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Conflicting issues



Boswd wrote:


3rd325 wrote:
The credit br does not report that an account is "paid in full" each month. As a lender I run into this often. When reviewing a customers credit I consider all their monthly debt. Having balances increases your DTI (debt to income, how much much of your income goes to mthly debt). Having balances increases your DTI, it DTI is too high I will decline the customer UNLESS they can prove that the card has been paid off. Having a higher fico is much more important.



I'm confused by your post, so is it more important to have a high FICO score than it is to have a low DTI?


I'm confused too. 
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

New Member
3rd325
Posts: 37
Registered: ‎06-05-2007
0

Re: Conflicting issues

A strong fico score is important. However, when you have a balance your disposable income decreases. This decrease may be minor but enough to cause a lender to either require that the account be paid off or the customer provide proof that it is paid off. Credit scores are important but they are not the "end all". I have declined 800+ scores for DTI or other issues.
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Conflicting issues



3rd325 wrote:
A strong fico score is important. However, when you have a balance your disposable income decreases. This decrease may be minor but enough to cause a lender to either require that the account be paid off or the customer provide proof that it is paid off. Credit scores are important but they are not the "end all". I have declined 800+ scores for DTI or other issues.


How does one with Fico scores over 800 get declined for DTI reasons?  Don't most folks with scores this high have very small balances on CC's, that is low util of 1-9%?  What do you mean by other issues?  Just curious.:smileysurprised:
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


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