Credit Card Balances

[jonjohn]

Is it better for your Fico score to have a small balance on each credit card (maybe 5%) or to have a zero balance?

Thanks

[dodfire]

The general consensus is that it is better for FICO scoring if you have a balance on only 1 card.

That balance to equal between 1% and 9% UTL of your total revolving credit.

[jonjohn]

Okay Thanks...

That's kinda what I was thinking. I just didn't know the percentage and the limit on number of cards... 

[asphaltcowboy]

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@dodfire wrote:

The general consensus is that it is better for FICO scoring if you have a balance on only 1 card.

That balance to equal between 1% and 9% UTL of your total revolving credit.

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+1

I have only let 1 or 2 cards report a balance,

my last report, I had 0 balance on all cards, score dropped 4 points

[ReaLiLJ]

Honestly if your getting ready to App and go on a spree, having 1% is a pretty good idea as it wil maximize your fico score, and look very good on apps if you have good enough limits. The bottom line though is that the difference between 1 & 2% are a few points, so it won't kill you if you have a 2% utilization rate, you will start to see a double digit change in score as you go higher then 3 or 4% though and having the low utilization rate between 2 or 3 cards is actually okay, as long as you have different cards pifing like (store card, credit card, credit card), you just don't want to have too many reporting even if they all equal out at 2% as it will look like your spreading your balance over cards, and that is frowned upon if your only paying the minimum. But having 2 cards reporting at 1% will maximize your score, and having a zero balance without piffing the 1% at least will drop your score some points, and if your credit file is thin, a grip of points, so make sure you always PIF.!! (Unless you don't care about those 3 to 4 points, and going to be in the garden/ have a apr rate that justifies why it makes no sense to carry a balance for those extra few points! -LJ

P.S. if your Pifing never ever leave the balance on one card for to long, for example one month carry a balance on your freedom card, then the next month pay it off, and utiliize a Cap one card, and so on, that way you kill 2 birds in one stone.

[jonjohn]

I just got totally lost... lol What is PIF or piffing? What I got from this post is not to have a zero balance all the time... keep it between 2 and 4%???

[asphaltcowboy]

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@jonjohn wrote:

I just got totally lost... lol What is PIF or piffing? What I got from this post is not to have a zero balance all the time... keep it between 2 and 4%???

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Refers to paying in full, you can let one or two cards report a small balance
then pay in full after the statement cuts, rotate this between several cards,

fico for some reason doesn't like to see all zeros, hope this helps

[ReaLiLJ]

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@asphaltcowboy wrote:

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@jonjohn wrote:

I just got totally lost... lol What is PIF or piffing? What I got from this post is not to have a zero balance all the time... keep it between 2 and 4%???

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Refers to paying in full, you can let one or two cards report a small balance
then pay in full after the statement cuts, rotate this between several cards,

fico for some reason doesn't like to see all zeros, hope this helps                         +1

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You have now the knowledge you need to take your first leap into seeing how good Pif can lead to +/-40-50 in credit score. And I hope you stay on the positive route Remember try to use this method on cards with low apr's or 0% intro rates that won't cause you too lose much $ monthly, and that will at the same time give you that extra boost in score/ maximize rewards that you earn from your total spendings. But if you follow the rule, you shouldn't lose much if anything at all once you get really good at it! -LJ 

[jonjohn]

It does.. thank you.

[thom02099]

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@jonjohn wrote:

Is it better for your Fico score to have a small balance on each credit card (maybe 5%) or to have a zero balance?

Thanks

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Depends.  If you're a score watcher and/or applying for new credit, the rule of thumb is to not allow your TOTAL util go over 9%, only carry a balance on one card. 

That said, it's not a bad thing to carry a balance on multiple credit cards.  If one has done a balance transfer to 1 or 2 cards, then there's likely going to be a balance carried on those cards for an extended period of time.  Sometimes a charge is made and it's in that cusp time period just before the statement cuts and the charge shows as pending for a few days, then the statement cuts.  So there will be a balance on the credit card.  No need to sweat it...again, unless you're applying for new credit.  Of course, the credit card companies will also LOVE you for carrying a balance.  The cardinal rule of course is to ALWAYS make a payment and on time, never late. 

Sometimes folks get caught up in the "competitive" nature of FICO scoring!