07-09-2012 11:41 AM
My husband has a Capital One credit card with a CL of $500. We have a balance of $148 due on July 25. Is better to pay it all off or leave a small balance? We got him a CC to help raise his score. I am confused on what we are supposed to do to get the CC to raise his score. This is his only card.
Thanks in advance!
07-09-2012 12:35 PM
At this point, it would seem that Capital One would have already reported a balance of $148 to the credit bureaus - a utlization of 29.6%. That is not great for FICO purposes.
The time to Pay in Full -or- leave a small amount is before your statement cuts (before the cycle ends, before you get the bill).
To get the most use out of it, pay all or most of the balance, before you get your statement. Play around with 1-9% balance reporting and see what works best for you.
Keep track of what you put on the card during the month, or check it online 5-10 days before the statement cycle ends. Make the payment before the end of the billing cycle, leaving nothing or close to nothing on your statement.
2011 - Debts paid
2012 - Rebuilding started - EQ myFICO 636
2013 - Student Loan, 3 CC, auto loan - EQ myFICO 663
07-09-2012 12:43 PM
It seems to be common wisdom by posters on the site that they see a bit higher score when util is left on at least one card at the level of 1-9%.
However, in the case of only one card, any benefit may be offset by the fact that it will always result in 100% of revolving credit carrying a balance, which is an additional scoring factor. Its not a simple matter of do this, or do that.
I would suggest playing around with it for a few months. Let it report $0 one month, then less than 10% the next. Since prior month's % util are not scored in subsequent months, it wont have any lingering effect on scoring, and thus would be a great chance to give both alternatives a test-drive.