Understanding FICO® Scoring

[Madison]

I have had a $0 balance for a BofA CC for about 4 months so I decided to use it. I charged $107 dollars on it which has a $4,000 CL. I haven't gotten my statement yet which I intend to pay in full. But I get a credit watch alert lowering my credit score 1 point. I only wanted to use the BofA just to keep it active. I am sure within the NEXT 60 DAYS EQX will give me my point back but it proved to me that having a balance between 1-9% is better than $0 balance is a bunch of hooey. I have paid Chase off Sept 1, 2008 and they send statements out on the Oct 6th and EQX hasn't adjusted my credit score for paying them off. I am sick of EQ to be quick to lower credit scores by slow as snails in raising them.

Message Edited by Madison on 10-07-2008 10:06 AM

[cobra19]

Some folks get dinged for going to 9%. 1-3% is best for some.

[jacred]

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Madison wrote:
I have had a $0 balance for a BofA CC for about 4 months so I decided to use it. I charged $107 dollars on it which has a $4,000 balance. I haven't gotten my statement yet which I intend to pay in full. But I get a credit watch alert lowering my credit score 1 point. I only wanted to use the BofA just to keep it active. I am sure within the NEXT 60 DAYS EQX will give me my point back but it proved to me that having a balance between 1-9% is better than $0 balance is a bunch of hooey. I have paid Chase off Sept 1, 2008 and they send statements out on the Oct 6th and EQX hasn't adjusted my credit score for paying them off. I am sick of EQ to be quick to lower credit scores by slow as snails in raising them.

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A single point drop is so minimal it'd likely be hard to pinpoint the cause.

If the statement hasn't posted yet this charge wouldn't yet be affecting your reports or scores, so the 1-point drop is likely unrelated.

The main reason to use the card occassionally should be to prevent the company from closing the card due to inactivity, not necessarily for a FICO score boost.

[Madison]

When I got my credit alert, it referenced the BofA CC and the charge of $107. That was the reason.

[CreditAble]

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Madison wrote:

I charged $107 dollars on it which has a $4,000 CL.

....... it proved to me that having a balance between 1-9% is better than $0 balance is a bunch of hooey.

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 The advice is not complete "hooey". Most people when giving that advice just don't realize that there is a minimum, which might exceed 1% which must report or there could be a ding of up to 4 or 6 points.

I discovered that anomaly when playing with the FICO simulator years ago. I subsequently did some experiments with my own actual balances and reports. Having at least a minimum of $150 balance (on only one CC) worked best for me. Furthermore having a maximum of 7% individual card utilization seemed to work best for me.    YMMV 

 Notice that your balance was only $107. If it really matters to you, you could try having a closing balance of at least $150 on only one card, with $0 balances on he others. See if you gain some points. If not you could try $200 the next month to see if that works. You will definitely gain some points when you determine your own "minimum" reported balance.

Message Edited by CreditAble on 10-07-2008 07:06 PM

[CreditAble]

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Madison wrote:
When I got my credit alert, it referenced the BofA CC and the charge of $107. That was the reason.

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 What was actually stated?

 I had assumed that you had $0 balances reporting on other cards. If you have balances reporting on other cards that could cause a score drop.  

Message Edited by CreditAble on 10-07-2008 06:48 PM

[cfletch123]

huh? I can only wish for a 1 point drop.

[1111mel]

The hit was for using a "dormant" card. Report 1% every month on the same card (and the only card) this is where you see the increase....(I saw 20-25 points)

Message Edited by 1111mel on 10-09-2008 10:46 PM