topic Re: Found out for myself...ALWAYS owe something on a CC in Credit Cards

Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 14:03:15 GMT

I had to prove this to myself, so I did...

Last month, I decided to have all of my credit card accounts report a balance of zero. Paid all balances before the statements cut, including a card which I'm on as an authorized user.

The result? My FICO score dropped 6 points! I know, that's no big surprise to the veterans here, but it still boggles my mind a bit.

A Negative on the report: No recent balances on revolving credit accounts

(and, in the same report)

A Positive: You've shown recent use of credit cards

This was a TU report. I didn't pull the others, I'm not seeking credit so this doesn't affect me one way or the other. I was just curious.

For the heck of it, I also went to Experian and pulled just their Vantage score. What a crock that is, one of the negatives (among not owing a mortgage because the house is fully paid for, and having an oldest cc account of ONLY 11 years age..too short) was low available credit!

My credit card utilization is 0 %, and has been under 2% for many months, with no one card over 9%. As I said before, I have no balances reporting now other than an auto loan.

So, two things I've learned...

1. Always have a small balance reporting on one card, at least.

2. Don't waste money to check a Vantage score from Experian. They're idiots (or, more accurately, I'm an idiot for thinking I'd get a fairly reliable score from them).

Anyways, now I know and you do, too!

Enjoy the day, folks! Happy Spring to All!!

P.S. Message edited twice...for "affect", then "effect", then back to "affect" again! Whew...shoulda spent more time paying attention in English classes!

Message Edited by Uborrow-Upay on 03-20-2009 09:35 AM

Message Edited by Uborrow-Upay on 03-20-2009 10:03 AM

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 13:12:37 GMT

So every account on your CR was reporting a 0 balance?

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 13:20:24 GMT

yes, mjbfan79... $0 reporting on all, except car loan balance.

Re: Found out for myself...ALWAYS owe something on a CC

moondog7324 — Fri, 20 Mar 2009 13:35:43 GMT

Manage your debt, not your FICO score. I would rather be debt free and interest free than to have the perfect FICO score.

Re: Found out for myself...ALWAYS owe something on a CC

llecs — Fri, 20 Mar 2009 13:35:52 GMT

Thanks for posting! The fun comes when you try to tweak it to maximize points.

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 13:50:36 GMT

moondog7342, kudos for that thought, I've always felt that way, too. I only checked in the interest of "What if" I wanted the best rate for a new loan and how I'd prepare for it beforehand. I now know to carry a small balance.

llecs, tweaking could become a new hobby!

Regarding the Vantage score, I just had to call to find out about this low available credit thing. The rep I spoke with told me that it refers to the total amount of credit available. It does not mean (for them, anyway) how much of your available credit you've used. Apparently, they must want to see at least 100K in credit lines open. I don't have that on personal accounts, as they don't count Signature cards (which report as a credit limit of $0, and not as the high balance).

Experian is warped, IMO.

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 14:07:26 GMT

@Anonymous wrote:
yes, mjbfan79... $0 reporting on all, except car loan balance.

Well u should have been fine if u had a car loan reporting. I have 12 credit i'm gonna try my best to let only 1 report every month. I also have a car loan an personal loan on my credit report.

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 14:08:03 GMT

@moondog7324 wrote:
Manage your debt, not your FICO score. I would rather be debt free and interest free than to have the perfect FICO score.

Yes i feel u there.

Re: Found out for myself...ALWAYS owe something on a CC

LisaJ — Fri, 20 Mar 2009 15:18:46 GMT

You know...I am finding that it is an addictive game, this fico thing! Serioulsy, I have a new mortgage, I am happy with my car, I have enough credit for emergencies, yet I still hunger to see that score go up, up, up!!! Wild.

Thanks for posting your experience. I was about to pay off my last card with anything on it; I think I will leave it be, since it is under 9%.

Re: Found out for myself...ALWAYS owe something on a CC

athensguy — Fri, 20 Mar 2009 15:25:01 GMT

@moondog7324 wrote:
Manage your debt, not your FICO score. I would rather be debt free and interest free than to have the perfect FICO score.

Showing a balance doesn't require you to pay interest. The anti-credit folks would like for you to believe otherwise, though, since that little lie helps further their agenda.

Re: Found out for myself...ALWAYS owe something on a CC

pmc123 — Fri, 20 Mar 2009 15:46:32 GMT

I am now prepared to do the same experiment. I have good scores and expect them to drop a few points, but I have come to the conclusion that it doesn't matter what your score is (within reason), unless someone is going to look at it and use it to make a credit decision.

I think it is far better to eliminate interest payments than to worry about the actual score.......

Edited to move the rest of the post to General Credit

Message Edited by pmc123 on 03-20-2009 08:46 AM

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 20 Mar 2009 21:09:27 GMT

I just wanted to chime in that you can have your cake and eat it too, in this regard. I don't pay a dime of interest, because I PIF, but I don't like to lose those 7-10 FICO points that I seem to drop by not having a small balance to show "responsible use of credit". By figuring out when my lenders reported to the bureaus I've been able to have the best of both worlds.

Re: Found out for myself...ALWAYS owe something on a CC

haulingthescoreup — Sat, 21 Mar 2009 00:56:15 GMT

I did the same experiment two months ago, and lost 2, 4, and 6 points (can't remember which CRA was which, but those were the numbers.)

It's the sort of thing that isn't huge on a daily basis, but anyone going for an important app like a mortgage should be aware of this and tweak their reported util accordingly.

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Sat, 21 Mar 2009 01:44:00 GMT

Just pay the account by the due date. You will report a balancve and you will avoid interest.

Re: Found out for myself...ALWAYS owe something on a CC

haulingthescoreup — Sat, 21 Mar 2009 01:52:30 GMT

geronimo2008 wrote:
Just pay the account by the due date. You will report a balancve and you will avoid interest.

But you don't want to do this with every account, or you'll get a pretty impressive ding from "too many accounts with balances."

Re: Found out for myself...ALWAYS owe something on a CC

wmarat — Sat, 21 Mar 2009 09:08:27 GMT

I have experimented with balances for a while. My conclusion is that nobody including Isaac himself knows how it works. I've lost 7 points for $1 balance on $5600 card and I've gained 8 points for $57 balance on $10000 card, so go figure.

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Sat, 21 Mar 2009 11:14:59 GMT

@wmarat wrote:
I have experimented with balances for a while. My conclusion is that nobody including Isaac himself knows how it works. I've lost 7 points for $1 balance on $5600 card and I've gained 8 points for $57 balance on $10000 card, so go figure.

Yeah, tell me about it! During the past Christmas holiday, I had one card at over 80% util. when it reported. I thought I'd get a big ding for that, but it only took me down 1 point...just 1. Having no balance on any card brought me down 6!

I'm glad there are other "gotta find out for myself" folks here, it'll make it much less painful for when I do something stupid in the interests of credit-scoring education!

Re: Found out for myself...ALWAYS owe something on a CC

moondog7324 — Fri, 03 Apr 2009 16:31:31 GMT

I'm not saying completely ignore your FICO- it is important to know how to tweak it to get from 615 to 625 if your mortgage shopping- but I've been guilty in the past of wondering "what if"- if I get the Target card or the Crown Jewelers-it can almost become an addiction- When you first start credit repair you see wonderful things happen when you get that collection deleted or a late fee removed- but everyonce in awhile you get blindsided by an updated charge off or a new collection and phone calls from a dormant account you awoken. Im just advocating take control of your debt- create good habits and have patience. I have a secured account that will go unsecure next month- $1000.... I'm thinking I can get that raised to a 5G credit line- but Do I really need it??? I made a pledge at the beginning of the year- No Inquiries in 2009,unless it's for a mortgage.

Re: Found out for myself...ALWAYS owe something on a CC

Anonymous — Fri, 03 Apr 2009 16:36:19 GMT

I just posted about this same thing in the general credit section. Didn't see this post first. I just had zero accounts report a balance and lost 9 points on EQ and 27 on TU!!

Re: Found out for myself...ALWAYS owe something on a CC

UpNUp — Fri, 03 Apr 2009 16:45:51 GMT

I just lost 8 points because my utilization went up to 7%.

You are damned if you do and damned if you dont!!

Message Edited by UpNUp on 04-03-2009 09:45 AM