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New Contributor
hpertrain
Posts: 52
Registered: ‎05-07-2007
0

credit balance

I kkep seeing posts that say keep at least a $5.00 balance on your revolving credit
card accounts versus a 0 balance. I'm in the habit of paying my credit card balance down to
0 after using one each month. Am I missing something? Should I pay the entire balance off
except for $5.00,will that increase my score?
Established Contributor
Revike
Posts: 720
Registered: ‎05-04-2007
0

Re: credit balance


hpertrain wrote:
I kkep seeing posts that say keep at least a $5.00 balance on your revolving credit
card accounts versus a 0 balance. I'm in the habit of paying my credit card balance down to 0 after using one each month. Am I missing something? Should I pay the entire balance off except for $5.00,will that increase my score?

You always want to pay the entire balance off (if you can) before the due date, in order to avoid finance charges. What everyone is referring to is the balance at the time the statement closes. The statement balance is what reports to the CRAs and appears on your CR. You don't want to pay your entire balance before the statement closes, if you are trying to maximize your score.

If you intend to pay in full each month, and have a reason to maximize your FICO scores (such as preparing to apply for a mortgage or auto loan):

If your balance is less than 10% of your credit limit just before the statement closes, let that balance post and then pay it in full before the due date.

If your balance is 10% of your credit limit or more, try to pay part of it before your statement closes, so the statement balance is less than 10%, and then pay the rest before the due date.

If you don't have a reason to maximize your FICO scores at the moment, it really doesn't matter if you pay in full before the statement closing date.
Contributor
section8
Posts: 102
Registered: ‎07-10-2007
0

Re: credit balance

If you have six credit card accounts, is it best to show a small balances on all six, or just a small balance on 2 of them?
Contributor
section8
Posts: 102
Registered: ‎07-10-2007
0

Re: credit balance

Can anyone tell me if:
 
CC1 $10
CC2 $10
CC3 $0
CC4 $0
CC5 $0
CC6 $0
 
Is better then:
 
CC1 $10
CC2 $10
CC3 $10
CC4 $10
CC5 $10
CC6 $10
 
?
Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
0

Re: credit balance



section8 wrote:
Can anyone tell me if:
 
CC1 $10
CC2 $10
CC3 $0
CC4 $0
CC5 $0
CC6 $0
 
Is better then:
 
CC1 $10
CC2 $10
CC3 $10
CC4 $10
CC5 $10
CC6 $10
 
?


the second one is better. 1-9% util on all for max fico points.
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)

Contributor
section8
Posts: 102
Registered: ‎07-10-2007
0

Re: credit balance

Thanks, that is good to know. I was thinking the first example would give a better score, because 2 cards is supposed to be optimal, so I was thinking 2 balances would be best.
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: credit balance



fused111 wrote:


section8 wrote:
Can anyone tell me if:
CC1 $10
CC2 $10
CC3 $0
CC4 $0
CC5 $0
CC6 $0
Is better then:
CC1 $10
CC2 $10
CC3 $10
CC4 $10
CC5 $10
CC6 $10
?


the second one is better. 1-9% util on all for max fico points.



I don't agree. Too many accounts with balances. Leave no more than 4 accounts showing a balance including mortgages, car loans and credit cards.
Contributor
section8
Posts: 102
Registered: ‎07-10-2007
0

Re: credit balance

Well, that brings me back to #1, since I have other accounts. I wish we could find out for sure... 
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: credit balance



section8 wrote:
Well, that brings me back to #1, since I have other accounts. I wish we could find out for sure...



Every FICO report I have pulled likes under 5 accounts reporting. Three is best. You can get away with four. Try it YMMV.
New Member
Skaluva99
Posts: 4
Registered: ‎08-07-2007
0

Re: credit balance

Hi,
Just wondering...
 
Say I have a credit limit of $8,000 on a credit card, and I have a current balance of $7,000.  My debt ratio would be 87.5%, right?  But, if I have other credit cards that aren't in use, and all together my credit lines equal say $50,000 my debt ratio wouldn't be so bad.  This won't hurt my credit score, right?  They look at your entire credit line, not just one particular card, right?
Thanks!
Steve

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