Totally Confused About Utilization, PIFs

[freedom2]

Good morning all --

I'm a newbie to these forums and am totally confused regarding credit utilization and montly PIF as it pertains to increasing your credit score.  I have 4 new credit cards - Discover IT, Chase Freedom, Barclays Rewards and Amex ED.  My question is:  Will charging and paying in full increase my credit score or should I carry a balance? Many of you know when your ccs report to the CRAs.  I don't even know how to find that information.  Typically,  I pay in full every month on my older credit cards.  Of the 4 new cards I have received over the past 3 weeks, I have only used 2, and have actually pif before even receiving my statements.  My credit scores never seem to move.  They are presently: EX:640, EQ: 653, TU: 678.  Can someone provide guidance on whether carrying a balance helps a credit score.  Many thanks!

[baller4life]

For optimum Fico scoring you only carry a balance on 1 card less than 10% of your total avaliable credit. Pif other cards before statement cut date. If you don't see that date online you can call and ask.

[freedom2]

Thank you so much baller for your response.  Will do!

[Anonymous]

10% of your total available credit or 10% of that cards credit limit?

[Anonymous]

Great question and response, I was wondering the same thing.

[jamie123]

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@freedom2 wrote:

Good morning all --

I'm a newbie to these forums and am totally confused regarding credit utilization and montly PIF as it pertains to increasing your credit score.  I have 4 new credit cards - Discover IT, Chase Freedom, Barclays Rewards and Amex ED.  My question is:  Will charging and paying in full increase my credit score or should I carry a balance? Many of you know when your ccs report to the CRAs.  I don't even know how to find that information.  Typically,  I pay in full every month on my older credit cards.  Of the 4 new cards I have received over the past 3 weeks, I have only used 2, and have actually pif before even receiving my statements.  My credit scores never seem to move.  They are presently: EX:640, EQ: 653, TU: 678.  Can someone provide guidance on whether carrying a balance helps a credit score.  Many thanks!

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You need to understand a bit about how it works and some of the terminology that is used on this forum.

You will get your highest FICO 08 score by having 1 card report less than 10% of its credit line. For every card more than 1 that reports a balance you will automatically lose at least 3 to 5 points. (It could be more depending on that card's UTI.) I have lost 3 points for having an extra card report a balance of $3.

There are 2 important times to remember about each of your cards. They are:

1. Due Date - This is the due date that is printed on your statement. This is last day you can make a payment before being considered late.

2. Statement Reporting Date - This is also referred to as the statement cut date. This date is anywhere from 3 to 5 days after the DUE DATE and is the day a new statement is created. The balance of your account on this day appears on this statement and is also the balance that is REPORTED to the credit reporting agencies.

You can use all your credit cards each month but you must pay off all but 1 card to $0 about 3 days BEFORE THE DUE DATE and then refrain from using that card for about a week. You want to have your payment cleared before the due date and keep the balance at $0 until after the Statement Reporting Date to ensure that your reporting balance will actually be $0.

You only need to groom your scores like this for 2 reasons. You want to see the highest scores you are capable of or you want the highest scores possible because you plan on applying for new credit in the next month.

If you pay ALL your cards to $0 your scores will actually drop. You NEED to have 1 card reporting a small balance to get the highest scores.

Questions?

[freedom2]

Wow Jamie!  Your response was crystal clear and full of information.  You've answered all of my questions and cleared up my confusion.  Thank you so very much for taking the time to reply!