PiF and Utilization Help!

[Anonymous]

I'm 22 years old and fairly new to credit cards and these forums. I've had a Capital One Platinum for 8 months now with a $1,500 CL. The payment due date is on the 16th every month while the statement date is the 19th of every month.

Please correct me if I am wrong, but it is my understanding that whatever balance I have by the statement date is what is reported to the credit bureaus.

Also, I'm confused on how Pay in Full (PIF) works. I had a balance of $147.58 that was reported to the Credit bureaus on Dec. 19th. I've already paid off the entire $147.58 balance as of today and currently have a balance of $0. Is this considered PIF?

Now, am I supposed to buy some items and leave a balance of lets say $45 (3% Util) before the Jan. 16th payment date and leave the credit card alone to let the $45 report?

I want to maximize my FICO score gains. All assistance is welcome!

[Anonymous]

In your example above, yes, you are paying in full.  If you pay off your entire statement balance by the due date, it is considered paying in full and you're exhibiting superior creditworthiness, as you're displaying the least amount of risk to the lender.  After you PIF, any new charges that occur before the next statement closing date will become your next statement balance and that statement balance is what Capital One reports to the bureaus. 

Is this your only credit card?  If so, allowing a balance to report is a good thing verses not letting one report.  All you want to do is make sure you have a small balance available to report after you pay off your statement balance.  This small balance can be anything from $2 up to 8.99% of your credit limit for maximum FICO scoring benefit.  I say $2 because I've tested that data point with Capital One and it's the smallest balance they will report, anything smaller is reported as $0.  

Make sure you're not excessively spending or spending more in order to report a balance.  If you use the card naturally as you would, you may have a previous statement balance of $150, but a current balance of $250 because you charged another $100 between the time your statement balance was given to you (and reported to the bureaus).  If you PIF [$150] you'll still have a $100 balance that will report and become your next statement balance.  You could PIF + $90, for example, making a $240 payment, which would leave $10 left to report come the closing date.  Of course any other charges between that payment and the closing date would be added to your balance and what gets reported.  As you can see, spending extra is not necessary here so long as you're using the card naturally anyway throughout the month. 

The only time a spend would be necessary (to report a non-zero balance) would be if you didn't use the card at all between your last statement balance and your next closing date.  Using the above example if you had a $150 statement balance previously reported, you could pay off $145 and leave $5 behind to report.  This however is not quite a PIF and you'd have to pay interest on that $5 that you left.  Paying interest unnecessarily is never recommended, even if it's just pennies.  Option B would be to PIF the $150 and then a few days before the 19th make a small purchase like a Red Bull, or anything you would normally purchase anyway.  Then that $2.50 or whatever it costs would be there to report and that would be your new statement balance that you'd want to PIF the following month.

[SouthJamaica]

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@Anonymous wrote:

I'm 22 years old and fairly new to credit cards and these forums. I've had a Capital One Platinum for 8 months now with a $1,500 CL. The payment due date is on the 16th every month while the statement date is the 19th of every month.

Please correct me if I am wrong, but it is my understanding that whatever balance I have by the statement date is what is reported to the credit bureaus.

Correct

Also, I'm confused on how Pay in Full (PIF) works. I had a balance of $147.58 that was reported to the Credit bureaus on Dec. 19th. I've already paid off the entire $147.58 balance as of today and currently have a balance of $0. Is this considered PIF?

Yes it is. But there is another way of paying in full... paying even before the balance hits the statement.

Now, am I supposed to buy some items and leave a balance of lets say $45 (3% Util) before the Jan. 16th payment date and leave the credit card alone to let the $45 report?

Nope, it's not necessary. But since every profile acts differently, you should try it next month with a zero balance, and see if the effect on your score is an increase, a decrease, or nothing.

I want to maximize my FICO score gains. All assistance is welcome!

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[Anonymous]

SJ, is it even possible on any profile for someone to realize a score gain from going from a single small reported balance to a single $0 balance?

[SouthJamaica]

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@Anonymous wrote:
SJ, is it even possible on any profile for someone to realize a score gain from going from a single small reported balance to a single $0 balance?

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I don't know.

None of us who follow this stuff closely, and test the algorithms' behavior, have only 1 card.  We know how the FICO 8 score behaves when someone has 2 or more cards, but we have no experience with only 1 card.

OP can test it and he'll know more than I do.

[Thomas_Thumb]

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@SouthJamaica wrote:

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@Anonymous wrote:
SJ, is it even possible on any profile for someone to realize a score gain from going from a single small reported balance to a single $0 balance?

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I don't know.

None of us who follow this stuff closely, and test the algorithms' behavior, have only 1 card.  We know how the FICO 8 score behaves when someone has 2 or more cards, but we have no experience with only 1 card.

OP can test it and he'll know more than I do.

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Number of open accounts reporting a balance is a scoring factor by itself. For this factor, the fewer, the better.

The drop in score with no cards reporting is not count related - it actually is associated with "no recent activity on revolving accounts". I had this reason statement and associated score drop even though an AU card and an AMEX charge card were both reporting a balance. These cards did not count toward my revolving aggregate utilization on Fico 8.

Note: The AMEX card does count toward # of open accounts with balances but, the AU card doesnot. It's almost as if the AU card is invisible for me on Fico 8.

In the OPs case, the penalty associated with "no recent activity on revolving accounts" should apply if that card reports no balance. It is not tied to card count. However, if the one card does report a small balance, I doubt that would trigger any type of score penalty relating to "too many accounts with balances".

If a % of cards reporting kicks in as a scoring factor, it's likely conditioned not to come into play unless/until there are at least two and possibly 3 open accounts - with charge cards being include in the count but not included in revolver activity or aggregate utilization.

Look forward to hearing back from the OP on results.

[Anonymous]

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@Anonymous wrote:

Is this your only credit card?  If so, allowing a balance to report is a good thing verses not letting one report.  All you want to do is make sure you have a small balance available to report after you pay off your statement balance.  This small balance can be anything from $2 up to 8.99% of your credit limit for maximum FICO scoring benefit.  I say $2 because I've tested that data point with Capital One and it's the smallest balance they will report, anything smaller is reported as $0.   

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Yep! This is my first and only credit card. I plan on pursing a new credit card with Chase after this month. I've been banking with them since I was 16 (highschool account at that time, now college). I'll go more into detail in the "Credit Card Application" section of the forums at a later time.

Thank you for your help!

[Anonymous]

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@Thomas_Thumb wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:
SJ, is it even possible on any profile for someone to realize a score gain from going from a single small reported balance to a single $0 balance?

---

I don't know.

None of us who follow this stuff closely, and test the algorithms' behavior, have only 1 card.  We know how the FICO 8 score behaves when someone has 2 or more cards, but we have no experience with only 1 card.

OP can test it and he'll know more than I do.

---

Number of open accounts reporting a balance is a scoring factor by itself. For this factor, the fewer, the better.

The drop in score with no cards reporting is not count related - it actually is associated with "no recent activity on revolving accounts". I had this reason statement and associated score drop even though an AU card and an AMEX charge card were both reporting a balance. These cards did not count toward my revolving aggregate utilization on Fico 8.

Note: The AMEX card does count toward # of open accounts with balances but, the AU card doesnot. It's almost as if the AU card is invisible for me on Fico 8.

In the OPs case, the penalty associated with "no recent activity on revolving accounts" should apply if that card reports no balance. It is not tied to card count. However, if the one card does report a small balance, I doubt that would trigger any type of score penalty relating to "too many accounts with balances".

If a % of cards reporting kicks in as a scoring factor, it's likely conditioned not to come into play unless/until there are at least two and possibly 3 open accounts - with charge cards being include in the count but not included in revolver activity or aggregate utilization.

Look forward to hearing back from the OP on results.

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I see "You've shown recent use of credit cards and/or open-ended accounts" listed as a positive scoring factor in my EX credit report so I am going to avoid leaving a zero balance and keep my balance for reporting under 8.9% going forward.

I now have autopay setup with Cap1 for the last statement balance. Afterwards, I will treat myself to some books for around $10-20 to report to the credit bureaus.

I also have listed 2 negative scoring factors listed in my EX report "You have a short credit history"(for sure) and "The remaining balance on your mortgage or non-mortgage installment loans is too high". The second item comes from my student loans. I have 5 separate student loan accounts(4 open, 1 closed) I failed to mention in my initial post which have balances.

OPEN:

$3500 (08/19/2013, 4 yrs 4 mos)

$1709 (08/19/2013, 4 yrs 4 mos)

$855 (08/30/2013, 4 yrs 4 mos)

$943 (07/25/2016, 1 yr 5 mos)

CLOSED:

Paid off - (08/13/15, 2yrs 4mos)

I graduated this past December from college. I start work next month with an annual salary of 84k. I plan on living with my dad for at least a few months. I want to also maximize my FICO score gains. How should I approach paying of my loans? I plan on taking over the phone bill ($200) and helping out my dad with other things ($400) each month. 

Thank you all for your help!

[arkane]

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@Thomas_Thumb wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:
SJ, is it even possible on any profile for someone to realize a score gain from going from a single small reported balance to a single $0 balance?

---

I don't know.

None of us who follow this stuff closely, and test the algorithms' behavior, have only 1 card.  We know how the FICO 8 score behaves when someone has 2 or more cards, but we have no experience with only 1 card.

OP can test it and he'll know more than I do.

---

Number of open accounts reporting a balance is a scoring factor by itself. For this factor, the fewer, the better.

The drop in score with no cards reporting is not count related - it actually is associated with "no recent activity on revolving accounts". I had this reason statement and associated score drop even though an AU card and an AMEX charge card were both reporting a balance. These cards did not count toward my revolving aggregate utilization on Fico 8.

Note: The AMEX card does count toward # of open accounts with balances but, the AU card doesnot. It's almost as if the AU card is invisible for me on Fico 8.

In the OPs case, the penalty associated with "no recent activity on revolving accounts" should apply if that card reports no balance. It is not tied to card count. However, if the one card does report a small balance, I doubt that would trigger any type of score penalty relating to "too many accounts with balances".

If a % of cards reporting kicks in as a scoring factor, it's likely conditioned not to come into play unless/until there are at least two and possibly 3 open accounts - with charge cards being include in the count but not included in revolver activity or aggregate utilization.

Look forward to hearing back from the OP on results.

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I can offer up some limited DP since I had only 1 card for 5 years.

Once my AAoA crossed a certain threshold (somewhere between 6 mo and 1 yr 11 mo), I no longer received "length of time revolving accounts have been established" as a reason code, and instead the one and only reason code that stuck was "too few accounts currently paid as agreed". (if anyone cares my TU08 was 788 and EX08 was 781 at the 1 yr 11 mo mark with 1% util and perfect payment history)

Not once have I seen "too many accounts with balances" throughout the 5 years I only had 1 card, so I think you're definitely right there's a special flag for only 1 open revolver. Instead of getting dinged for "too many accounts with balances", you're dinged instead for "too few accounts currently paid as agreed". I assume this is because having only 1 open revolver (regardless of account age and payment history) just isn't a very strong predictor of how responsible one would be with multiple revolvers.

[Kree]

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@Anonymous wrote:

I want to maximize my FICO score gains. All assistance is welcome!

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Nothing with Utilization will effect your "score gains".   Utilization scores are snapshots,  you could have perfect utilization one month, horrible utilization the next, and have perfect utilization the third month and your score will be exactly the same.  bad to good to bad same thing.

The only score "gains" is aging your account. The older it is, the better.  The less inquiries in last 12 months, the better.

If you really want to work on a better score, look at your credit mix and profile thickness. Time when to get new cards so give yourself a robust profile without lowering scores.  Or let the scores lower, that will fix itself with time, better than before, because thickness.