topic Re: Utilization & score question... in Credit Cards

Utilization & score question...

Anonymous — Wed, 18 Nov 2009 15:31:48 GMT

I have 1 credit card with a $200 limit. The balance is 195 (accdng to Equifax).

If I pay it off, and Equifax reports a 0 balance, will my credit score go up?

Current score 532

Re: Utilization & score question...

Anonymous — Wed, 18 Nov 2009 15:34:30 GMT

Yes, you will receive a big jump. Your current utilization is at 98%. Since you have only 1 card, this is killing you. Although You aren't going to shoot up to a 600, I would expect a rather large increase.

Re: Utilization & score question...

Anonymous — Wed, 18 Nov 2009 15:52:03 GMT

It will help. How much depends on other factors on your report. And for under $200, I highly suggest not carrying a balance on a high fee card....bites you in interest and FICO.

IMO

Re: Utilization & score question...

MarineVietVet — Thu, 19 Nov 2009 02:19:09 GMT

@Anonymous wrote:
I have 1 credit card with a $200 limit. The balance is 195 (accdng to Equifax).
If I pay it off, and Equifax reports a 0 balance, will my credit score go up?

Current score 532

Yes it should help but from now on use it sparingly every few months for a small purchase and pay in full after the statement posts and before the due date. If it reports a zero balance each month your score will actually suffer. On a $200 limit let no more than $18 (9% utilization) report each month.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

Re: Utilization & score question...

BungalowMo — Thu, 19 Nov 2009 19:46:14 GMT

@MarineVietVet wrote:
@Anonymous wrote:
I have 1 credit card with a $200 limit. The balance is 195 (accdng to Equifax).
If I pay it off, and Equifax reports a 0 balance, will my credit score go up?

Current score 532
Yes it should help but from now on use it sparingly every few months for a small purchase and pay in full after the statement posts and before the due date. If it reports a zero balance each month your score will actually suffer. On a $200 limit let no more than $18 (9% utilization) report each month.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

Actually, you want to pay BEFORE the statement cuts. On 99% of cc accts, the balance at statement CUT is what is reported to the CRA's.

But as marinevietvet mentioned...use it sparingly for small purchases to keep it active.

Depending on how long you've had it...ask for a CLI. Most starter cards will give you a bump after you've had them for about 6 or so mos.

Re: Utilization & score question...

Anonymous — Thu, 19 Nov 2009 20:09:51 GMT

@BungalowMo wrote:
@MarineVietVet wrote:
@Anonymous wrote:
I have 1 credit card with a $200 limit. The balance is 195 (accdng to Equifax).
If I pay it off, and Equifax reports a 0 balance, will my credit score go up?

Current score 532
Yes it should help but from now on use it sparingly every few months for a small purchase and pay in full after the statement posts and before the due date. If it reports a zero balance each month your score will actually suffer. On a $200 limit let no more than $18 (9% utilization) report each month.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".
Actually, you want to pay BEFORE the statement cuts. On 99% of cc accts, the balance at statement CUT is what is reported to the CRA's.

But as marinevietvet mentioned...use it sparingly for small purchases to keep it active.

Depending on how long you've had it...ask for a CLI. Most starter cards will give you a bump after you've had them for about 6 or so mos.

What marinevietvet was referring to is that having a 0 balance on all accounts report hurts your score as opposed to letting one or two accounts show a balance. Unfortunately, I don't know if this is true or not if they account that reports a balance is your only revolving account.

Re: Utilization & score question...

haulingthescoreup — Thu, 19 Nov 2009 21:58:33 GMT

Yes, we're still hoping to hear back from someone with only one card, who has tried letting it report ~5% and then having it report $0.

* hint, hint *

Re: Utilization & score question...

MarineVietVet — Fri, 20 Nov 2009 02:00:35 GMT

BungalowMo wrote:

Actually, you want to pay BEFORE the statement cuts. On 99% of cc accts, the balance at statement CUT is what is reported to the CRA's.

That is true if you want a zero balance to report. I was referring to a small balance reporting and being paid before the due date to avoid any finance charges. I could explained it a little better.

And the discussion continues whether those with only one CC get a bigger boost to their score by reporting a zero balance each month as opposed to a small amount of 1-9%.

I'm with haulingthescoreup. Someone needs to volunteer!!!

Re: Utilization & score question...

Anonymous — Fri, 20 Nov 2009 02:09:35 GMT

Hey well the credit card company updates on the 24th, and it will be updating from a $197 balance last month to a $2 balance this month on a $200 limit, so i will let you know of my score increase.

: )

Re: Utilization & score question...

Anonymous — Fri, 20 Nov 2009 12:43:46 GMT

So you will have a 1% uti ratio....please let us know what happens to score.

Next month....as HTSU hinted, we'd love to know what a zero balance shows on score for a CR with only 1 cc.

Re: Utilization & score question...

morganirish — Fri, 20 Nov 2009 13:20:22 GMT

For a long time I only had one cc. With a 300. limit and a few lates. Whenever I let a balance report my score would drop, usually by a couple of points. But, now that I have 5, and almost all derogs removed, I let a few bucks report and my score doesn't change, up or down. just my experience so far.

Re: Utilization & score question...

haulingthescoreup — Fri, 20 Nov 2009 14:23:51 GMT

morganirish wrote:
For a long time I only had one cc. With a 300. limit and a few lates. Whenever I let a balance report my score would drop, usually by a couple of points. But, now that I have 5, and almost all derogs removed, I let a few bucks report and my score doesn't change, up or down. just my experience so far.

A-ha! A report from the trenches.

So in at least one case, when you only have one card, It's better to have a $0 balance. The 100% usage ding seems worse than the no-cards-with-balances ding.

morganirish, when you let balances report on the $300 card, how much were they typically? Because that will be the next question, of course --was it too high of a util showing, or any balance at all.

Re: Utilization & score question...

morganirish — Fri, 20 Nov 2009 16:59:51 GMT

Sometimes yes, the util. was way to high, and my score would drop more, but other times it would report 5 or 10 dollars and it would still drop, though not as much. But everytime I let a 0 bal. report my score went up a little. Even now I have 5 cc, and I let very little report. My util now stays between 1 and 6 % . And my cs has been the same for a couple of months.

Re: Utilization & score question...

haulingthescoreup — Fri, 20 Nov 2009 17:15:52 GMT

Thank you!

While this might not be true across the board, depending on age, baddies, etc., it's a very clear indication that for some folks with one card, it's better to have it report $0 than some token amount.

Re: Utilization & score question...

BungalowMo — Fri, 20 Nov 2009 21:56:48 GMT

@MarineVietVet wrote:
@BungalowMo wrote:

Actually, you want to pay BEFORE the statement cuts. On 99% of cc accts, the balance at statement CUT is what is reported to the CRA's.

That is true if you want a zero balance to report. I was referring to a small balance reporting and being paid before the due date to avoid any finance charges. I could explained it a little better.

And the discussion continues whether those with only one CC get a bigger boost to their score by reporting a zero balance each month as opposed to a small amount of 1-9%.

I'm with haulingthescoreup. Someone needs to volunteer!!!

I see what you're saying now. And as thrasher mentioned...if this is their onlycard...having a small bal post might help the score rather than hurt.

Edit.....then I read the rest of the thread!!! Leave it to me to jump the gun!!!!

Message Edited by BungalowMo on 11-20-2009 04:56 PM

Re: Utilization & score question...

Anonymous — Fri, 27 Nov 2009 21:03:10 GMT

Hey everyone...

UPDATE

so my utilization went down from around 98% with one card to 5% and i saw a score increase of 32 points. i have a 564

Re: Utilization & score question...

haulingthescoreup — Fri, 27 Nov 2009 21:16:08 GMT

Ahhh... --that's pretty sweet! Happy Thanksgiving!

Re: Utilization & score question...

Jazzzy — Fri, 27 Nov 2009 21:19:15 GMT

Congratulations army guy...!!!

Continue to use your cards responsibly and let time do its work.

Re: Utilization & score question...

Anonymous — Sun, 29 Nov 2009 12:58:59 GMT

@Anonymous wrote:
Hey everyone...
UPDATE
so my utilization went down from around 98% with one card to 5% and i saw a score increase of 32 points. i have a 564

That's great, armyguy90!

And thanks for the update. A lot of times people ask questions on this forum, they're answered at length, and then we don't hear what the outcome was (which isn't a big deal, but it's nice to know what happened).