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aten1701
Posts: 8
Registered: ‎08-07-2007
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Is paying off the balance on my cc every month good or bad?

I am very debt adverse, so typically, I pay off all my outstanding debt on my Wells Fargo Visa CC, as well as any other CC I have.  Should I be keeping a balance on the credit card to improve my score, or is it fine to just pay it all off?
 
My typical utilization on a given month on the Wells Fargo Visa CC could be about 30%, but again, it gets paid down every month/billing cycle.
Moderator Emeritus
fused
Posts: 16,378
Registered: ‎03-12-2007
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Re: Is paying off the balance on my cc every month good or bad?



aten1701 wrote:
I am very debt adverse, so typically, I pay off all my outstanding debt on my Wells Fargo Visa CC, as well as any other CC I have.  Should I be keeping a balance on the credit card to improve my score, or is it fine to just pay it all off?
 
My typical utilization on a given month on the Wells Fargo Visa CC could be about 30%, but again, it gets paid down every month/billing cycle.


Have all of your revolving account balances reporting 1-9% util for max FICO points. 
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, 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 (Amex 07-15-2014)

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masdeocho
Posts: 2,050
Registered: ‎04-17-2007
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Re: Is paying off the balance on my cc every month good or bad?

Pay it all off.  The only time you want 1 - 9% utilization is when you are actually applying for credit.  If you are getting a mortgage next year, it doesn't matter that you have a zero balance reported now.  Better to be debt adverse and not pay extra $ to the banks.
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
Visitor
aten1701
Posts: 8
Registered: ‎08-07-2007
0

Re: Is paying off the balance on my cc every month good or bad?

Yes, it has been under 10% most likely.  My Mastercard has a CL of $21,000, and I never use it, and my Visa has a CL of $7,500, and I usually run it up to $3,000 or so a month but pay it all off.
 
Now, I am wondering if having only these two major CC is enough in the context of my overall FICO.  I used to have another Visa and Discover card, but have since closed them off.
 
Again, my FICO is in the 750s - 770s.
Visitor
aten1701
Posts: 8
Registered: ‎08-07-2007
0

Re: Is paying off the balance on my cc every month good or bad?

Thanks for the note.  I'll keep in mind to raise the balance or at least have it present a month or so before I apply for anything like a mortgage.
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ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
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Re: Is paying off the balance on my cc every month good or bad?

Pay off in full. Activity is the same as balance. They both force an update reflecting payment. PIF looks better. A personal opinion, 0% will give you a higher score than 10% UTL. There is a sweet spot for a few more points somewhere on the lower end of UTL.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Visitor
aten1701
Posts: 8
Registered: ‎08-07-2007
0

Re: Is paying off the balance on my cc every month good or bad?

Thanks for the note.  That seems to make more sense and is a much more simple approach than to keep a 10% or lower utilization.
Moderator Emeritus
masdeocho
Posts: 2,050
Registered: ‎04-17-2007
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Re: Is paying off the balance on my cc every month good or bad?



aten1701 wrote:
Thanks for the note.  I'll keep in mind to raise the balance or at least have it present a month or so before I apply for anything like a mortgage.


Keep in mind we are talking about total fine tuning-type stuff, the kinds of things we FICO freaks obsess about.  OK to talk about it here because the rest of the world will think you're nuts.  See the thread on the 12 step program ... http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=5651&jump=true
 
Best case scenario: your account balance on the date your CC reports to the CRA (ask them what day of the month this normally is) = 1 - 9% of your CL AND you pull your score before the CC reports again AND the lender uses that score when you apply for the mortgage, car loan, etc.
 
Otherwise, just pay every single bill on time and don't go credit-crazy.  You'll be fine!
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
New Member
jbunny1952
Posts: 6
Registered: ‎08-01-2007
0

Re: Is paying off the balance on my cc every month good or bad?

Fused111, am new to the fico forum, and I see that I have been using my cc too much.  Haved used 30% to 68%, and will now PIF.  Was wondering how long does this high usage stay on the CA reports and how long will they affect my scores on a monthly basis?  Example: cc1 used 67% for a couple of months, then PIF and use from now on only 2% for X amount of months, what impact will the high use be incorporated into the future fico scores?
Please let me know
Thanks
Jbunny1952
Moderator Emeritus
masdeocho
Posts: 2,050
Registered: ‎04-17-2007
0

Re: Is paying off the balance on my cc every month good or bad?

Jbunny -- no impact at all on your future FICO score.  There is no historical utilization factor.  How much of your CL you use today does not matter when you pull your score in one year.  That's why I said this is fine tuning -- the utilization only matters at the point in time when your score really matters.  Otherwise it's just academic.
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.

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