topic Re: PIF CC several times a month? in Credit Cards

PIF CC several times a month?

natasjlp — Tue, 07 Apr 2009 19:08:06 GMT

I heard on a money talk radio show that using (even if it is for a pack of gum, whatever) your credit card and PIF several times a month will boost your FICO score. Is this true? Does it do anything. It was suggested to do this as many times as possible.

Re: PIF CC several times a month?

203bravo — Tue, 07 Apr 2009 19:16:36 GMT

Strange advice... Your credit is rated on how well you use it and are responsible in paying it back. Thus if you never have a balance reported you would never get rated. CCs only report once a month so no matter how often you charge and pay, it still only reports 1 time. And if you aren't timing the cycle just right and it reports with a 0 balance then you have nothing to report as paying responsibly.

But I could be wrong.

Re: PIF CC several times a month?

haulingthescoreup — Tue, 07 Apr 2009 22:52:26 GMT

As usual, the media is getting it wrong, or at least, incomplete.

They're probably talking about paying almost all your balance 3 days before the statement drops, letting a tiny figure report, and then paying off the rest, which I suppose would count as "paying several times a month." This results in a tiny util figure reporting, which can help scores.

I find that one card always seems to sneak in with a balance, so I just plan on PIF'ing them all before the statement, figuring that one will (accidentally) show a balance at any given time. My current util is somewhere around 4/10 of 1%.

Re: PIF CC several times a month?

Anonymous — Tue, 07 Apr 2009 23:00:03 GMT

Paying your card in full multiple times per month would generally guarantee that you end up with a zero reported balance. Having low utilization reported (balance) improves your score. Paying multiple times a month in and of itself has nothing to do with FICO, only with how your bank views the account.

When you have a reported zero balance, the bank still reports your payment amount (the amount paid to get your reported balance) which shows use. Having a small balance report on 1 or possibly 2 cards tends to improve your score slighty (usually 3 - 12 points only).

The problems associated with PIF multiple times per month is that your bank becomes accustomed to your spending and payment patterns. If at some point you are not able to pay off balances immediately or begin to carry a balance for some reason, the bank may interpret this as a change in your financial health and take adverse actions such as reducing credit lines, re-evaluating your credit and possibly income.

There is no real short cut. Timely payments, low or no balances and aging of accounts is really what it is going to take.