I don't understand why my low, paid-each-month balances affect my score so much.

[tommie]

My scores are very good, but I believe they should be even better. I do not understand why my FICO quarterly report always indicates that I have "High Account Balances," more specifically, "The balances on your non-mortgage credit accounts are too high." I have a few different credit cards, but pimarily use only one of them. I pay the balances in full on all charges always each month. My FICO reports always indicate the amount of the alleged high balance, and it always equals the charges that have accumulated at that point just during this billing cycle on that one card that I use (Chase Mastercard). Since I pay the card in full each month, the charges are all less than 30 days old. I have a credit limit of $23.5K on this card, yet the FICO report gives me the "High Account Balances" warning if the charges total just $300!  I called the Credit Card provider and they told me that they have to give total charges, including current billing cycle, on the day that they send data to the credit agencies. What I did notice is that when I look at the records FICO has for my accounts, there is no limit indicated for that credit card. Is that the problem? Should I just call the credit card provider and tell them to furnish that information? Thanks for any help.

[GregB]

If your one primary card is not reporting a balance then that could make a big difference. Depending on the CC and the FICO version, they could be using the Largest Past Balance instead of the limit. They could also be excluding the card from Revolving Utilization calculations. Revolving credit is primarily credit cards.

What specifically is the CC that doesn't report a limit? Do your other CC report a limit?

[chasmith]

A credit card will report the balance on the lender's reporting cycle, regardless of whether you PIF.  Most of my accounts report on the statement date, so I pay before the statement cuts to show the balance I'm targeting.  HSBC used to report my BBRZ card the last day of the month, while the statement was cut in mid-month, but for the last two months they've been reporting on my statement date.  So worry about the lender's reporting date, use their pay-on-line function or a bill pay service to ensure your payment is posted before the reporting date...

To summarize what seems to be the consensus here and elsewhere, for the best credit score:

• Keep your total utilization below 10%, many say 9% or lower.
• Make any card with a balance reports a balance utilization below 10%, many say 9% or lower.
• Make sure "more than half" of your cards show zero balances (three cards, two should be zero, five cards, three should be zero, etc.)
• Rotate the cards zeroed out, to be sure you don't get closed out for inactivity and to juggle the reporting.

A card reporting no limit but a balance can be a problem.  Sometimes scoring may use the highest historic balance reported, other times they will not count the balance as revolving, so your utilization on that card isn't penalized.

Usually the negative statements in the factors affecting your score are two.  One is too much total credit, one is where one or more cards is maxed out.  The wording can be tricky and misleading.

[haulingthescoreup]

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@tommie wrote:

My scores are very good, but I believe they should be even better. I do not understand why my FICO quarterly report always indicates that I have "High Account Balances," more specifically, "The balances on your non-mortgage credit accounts are too high." I have a few different credit cards, but pimarily use only one of them. I pay the balances in full on all charges always each month. My FICO reports always indicate the amount of the alleged high balance, and it always equals the charges that have accumulated at that point just during this billing cycle on that one card that I use (Chase Mastercard). Since I pay the card in full each month, the charges are all less than 30 days old. I have a credit limit of $23.5K on this card, yet the FICO report gives me the "High Account Balances" warning if the charges total just $300!  I called the Credit Card provider and they told me that they have to give total charges, including current billing cycle, on the day that they send data to the credit agencies. What I did notice is that when I look at the records FICO has for my accounts, there is no limit indicated for that credit card. Is that the problem? Should I just call the credit card provider and tell them to furnish that information? Thanks for any help.

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Hi, welcome to the forums!

As GregB indicated, you have several issues going on.

1. The amount due on your statement is the figure that is reported to the credit bureaus in almost all cases. Even if you immediately pay off the bill, never carrying balances and never paying interest, it can make it look as if you have a lot of revolving debt. Many of us pay off our CC's right before the statements post to avoid this. (Technical note: for scoring purposes, ideally one card should report a token balance of ten bucks or so, and then pay it off.)
2. Is your go-to card a Visa Signature or MC World card? If so, you might want to read myFICO admin Barry's blog on this type of card. They can be a pain, as you have discovered, although some (many?) are starting to report a limit, perhaps due to feedback from exasperated consumers.

eta: chasmith outposted me.

[Peach8321]

One other thing - if you have any OTHER loans (ie, student loan) it may give you that message...

Also, make sure you aren't an AU and the primary isn't running up the card.

Finally, it's a careful game when your score gets high and it's usually not worth it to dedicate so much effort unless you are about to make a big purchase and need a loan... don't make yourself too stressed over it.

[tommie]

What specifically is the CC that doesn't report a limit? Do your other CC report a limit?

Thank you for your prompt reply to my question. I apologize for taking so long to come back. My spouse got very sick and had to go into the hospital for several days; I blew a lot of things off until I got her back home!

The card is a Chase Mastercard. Yes; the other two cards I have report a limit, but I do not like to use them. Perhaps I should get used to it and do so.