@Anonymous wrote:
@Anonymous wrote:
You don't have to PIF after it reports if you don't want to. Unless you your interest rate is high. I would just pay much more than the minimum payment. If you don't need to apply for anything soon and feel like carrying a balance, then do it. They don't care, nor should you if that's what you want to do, that's what it's there for.
Hey Donny! Always good to see you on here.
Just to give a slightly different perspective.... up until last year I would have agreed with you 100%. If a person didn't mind paying the interest, it would be true to say that there would be no downside at all from how future creditors might view a person carrying a balance. That's because until a few years ago, the CRAs didn't give creditors (or scoring algorithms like FICO) a way to see if somebody carried a balance (which is called being a revolver) vs. always paid in full (called being a transactor).
But a few years ago the CRAs began collecting your history of CC balances and payments going back at least 30 months, from which it is easy to deduce whether somebody is a revolver or a transactor. Revolvers are (as a statistical group) far more risky, far more likely to default. Fannie Mae incorporate a module last fall inside its underwriting software (used by most mortgage lenders) that looks to see if a person is more of an R or a T.
That said, T-R analysis modules will almost certainly also look to see whether a given revolver is paying only the minimum payment, or whether he is consistently paying much more than that. R's who only pay the MP are much more risky than R's who always pay substantially more -- so I really like your advice to the OP to always pay a good deal more.
Still, the ideal position (as we move into the future) is to be creating a history for oneself as always being a transactor. There may be other considerations of course -- e.g. unexpected medical expenses, a huge expense to repair one's roof with a 0% offer, etc. But otherwise moving ahead people should be biased toward being a transactor. And that's a new thing, different from how credit reports have worked in the past, so it's worth bringing up.
Always good to see you here too.
