Understanding FICO® Scoring

[svrds10]

Hello Everyone, In the past 6 months i have paid off 2 of my credit cards in full that had a very high balance on. I am about pay off 2 more of my credit cards this month leaving me with only 1 left that has a rather high balance as well. The cards i am paying off 1 has a $1400 balance "$57 a month" with 2000 limit and the other has a $4000 balance "$137 a month" with a 5000 limit. Will this hurt or help my FICO score being that i am paying them off in full thus eliminating my balance to limit % to nothing. I understand that people say to keep a 1-9% balance on my credit cards and just pay it off monthly which i would consider doing but in this case i think paying them both off completely is better than nothing or am i incorrect? My last CC i plan on either paying off or paying down alot within about 2 months. This dept was all accrued about 4 years ago when i purchased my first home. Since then my wife has began to work and I have gotten a rather large promotion so we have not used a credit card in about 2 years only paying on the dept. Once they are all paid off i plan on putting a few hundred a month on the card probably just gas and stuff then paying it off monthly. Let me know your thoughts on my situation. Thanks!!! Ryan

[ilovepizza]

It's ok to pay them off. It is better to have activity on them. If you charge new activity that counts as activity. Or you can leave a tiny balance. But why pay interest if you can charge gas or something else. I would pay off and use the card for something small each month.

[imacat]

Once a credit card is paid, you can't count on its staying on your CR after about 6 months.  A long history of credit is "so important".  You don't want your older CC accounts to drop off of your credit report because that decreases the length of time you have had credit and would hurt your score (and that can happen even if old baddies drop off).  To keep each of these CC's on your credit report as a good item after you pay them, make a small charge to each about every 6 months.  If you pay it off before it is billed there are advantages.  It still shows as a card with a zero balance on your CR which keeps your % utilization down.  If you have balances on 2 of 4 cards that's 50% utilization of your accounts, and the lower the percent the better it is for your score.  This is a different % utilization -- the CB's also consider the percent of the CL used on each CC.  Also, if you pay the cards off this way, they can't even charge you the minimum fc, which they could charge you if you kept even a small balance on the account all the time.