Re: Could a person who just charges a few dollars a year once or twice a year get a 800+ FICO score?
01-05-2013 09:16 AM
In a practical sense, from a purely FICO perspective, it probably would not matter.
If person 2 has higher interim balances, there is a chance that a monthly balance could report that is very high, thus dinging the score that month.
However, presuming both know the ropes, when either plans to actually use their score to app for new credit or initiate a business transaction, they have the ability get their reported balance to an ideal FICO number for that billing period. Thus, same reported % util. The other months are only academic.
The risk is that if person 2 hits a financial bump in the road, it would be harder to recover. Person 1 has more security with lower balances.
The bigger picture, in my opinion, is creditor view of the two consumers. Person 2 is generating revenue for them, perhaps not in interest, but in fees they collect for each charge transaction. Person 2 would make them smile. Person 1 most likely would not.
That view might effect the consumer's ability to obtain credit limit increases, or produce a decrease in credit limits. It might also, if they are making less on the account than the cost of maintaining it, cause the creditor to close the account.