topic Re: Question about Fico score and updates... in Credit Cards

Question about Fico score and updates...

krazy — Tue, 23 Feb 2010 01:00:27 GMT

Hi Everyone,

Just got my credit score and i have a 725. The only recommendation that i could do right now is pay off some of my balances. I have 2 questions regarding this. First, how long does it take to affect my score? I plan on paying about 75% -95% of my debt.I found that it will show my last balance on my statement, is this correct? Second, it also said that i should carry a blance on fewer cards... I am a little confused becasue i thought if you don't use it companies might close your account or lower your CL. Is having 3 out of 5 cards with balances a better way to get a higher score. Thanks for the help.

2/22/10 Equifax 725

Re: Question about Fico score and updates...

haulingthescoreup — Tue, 23 Feb 2010 01:18:00 GMT

OK, first of all, here's how the timing works. For almost all cards (not including HSBC/ Orchard bank cards + US Bank cards), the balance showing on your statement is what is reported, even if you pay it the very next day. Pretty much all of them, now including AmEx for most of their cards, send this info on the statement date. But then you have to wait for all three bureaus to post the new balances. EX is generally right away, but TU and EQ can take a week or more. HSBC/ Orchard bank cards and US Bank cards report the balance showing on the last business day of each month. US Bank updates right away. HSBC/ Orchard bank cards take a week or two (or more) to send in the numbers.

So basically, figure that whatever balance shows on your statements should be on all three reports within 2 weeks.

It's not a question of "carrying a balance", it's showing a balance. You don't ever want to carry a balance. If that bugs a bank, my attitude is "tough." They make money off of us whenever we swipe a card. As far as I'm concerned, they can make interest money off of others. You do want to use them on a regular basis, though. Think of everything that you pay for with cash, a check, or a debit card, and see if you can put it on a CC instead. Warning: don't do this unless you are self-disciplined, or things can get out of control fast. I think of CC's as very slow debit cards. For the most part, I don't use one unless i have money in the bank to pay it off immediately if necessary, or at least, have money available in the next paycheck.

I think of it as the modern-day version of how household finances used to be managed, where people carried a tab, so to speak, and at the end of the month, they settled up their accounts with the grocer, the butcher, and so forth.

You can control how many cards report a balance by paying them off online several days before the statement is due to drop. The fewer CC's with balances, the better for your scores in most cases, as long as one does show a balance. (Then don't forget to pay it off before the due date!)

Your best bet for FICO scoring is to allow one card to display a balance, and then pay it off. Keep that displayed amount at 9% or less of that card's credit limit. Except in a few cases, this should give you the best score results.

eta: updated for the eternally annoying HSBC/ Orchard bank cards and US Bank cards exceptions

Message Edited by haulingthescoreup on 02-22-2010 05:18 PM

Re: Question about Fico score and updates...

Anonymous — Tue, 23 Feb 2010 02:21:39 GMT

In rural south Georgia as a kid I used to fill my car with gas, walk into the store and grab a candy bar and wave at the store owner on the way out. Sometimes one of us would say Friday? or Friday! and sometimes we'd just nod. Sigh.

Re: Question about Fico score and updates...

RobertEG — Tue, 23 Feb 2010 06:08:57 GMT

That is cool in old, rural Georgia, but a CCC will probably track you, wait until you cross a state line, and then call in the FBI for investigation of interstate transportation of stolen goods!

Re: Question about Fico score and updates...

krazy — Tue, 23 Feb 2010 06:18:03 GMT

Thanks, for the great info. When you stated to only use about 9% are you refering to one card or total over credit line?

Re: Question about Fico score and updates...

haulingthescoreup — Tue, 23 Feb 2010 12:45:35 GMT

krazy wrote:
Thanks, for the great info. When you stated to only use about 9% are you refering to one card or total over credit line?

Well, I was saying that in the context of only allowing one card to report a balance. 9% on one card will naturally be less overall.

For those who are still digging out from CC debt, 9% overall is a good goal. Once you essentially have no debt, and you are using cards for convenience and to tweak your FICO scores, you would want to keep any card that was reporting (the fewer the better) at 9% or less.

FICO scoring looks at both overall util and individual card util.

And a handy side effect of deliberately limiting yourself to 9% util on just one or maybe two cards is that you should be able to stay on top of your balances.

Re: Question about Fico score and updates...

MidnightVoice — Tue, 23 Feb 2010 15:09:51 GMT

@Anonymous wrote:
Remember that credit bureaus use different methods to receive and process good versus bad credit information.

Information that would negatively affect your credit rating--like a late pay or charge-off--is instantly beamed from the creditor to the agency via Department of Defense 256-megabit fiber optic lines and written to their servers in 8.6 milliseconds.

Information that would positively affect your credit rating is scribed onto scrolls in special ink by Gregorian monks, which are then painstakingly illuminated. The Credit Scrolls are then placed onto camel caravans which wind their way to the credit bureau headquarters by way of Marrakesh, Dubai, and Tripoli. Once the caravan reaches Equifax, Experian or TransUnion, the scrolls are then laid out in the sun for a week so that the special ink can be read. (Note that the weather around the credit bureau headquarters is notoriously gloomy, like FICO itself, so finding seven consecutive days of sunshine can be quite an ordeal in and of itself.) Only then can the information finally be encoded into your credit files...

Re: Question about Fico score and updates...

woozy — Tue, 23 Feb 2010 18:39:56 GMT

@MidnightVoice wrote:
@Anonymous wrote:
Remember that credit bureaus use different methods to receive and process good versus bad credit information.

Information that would negatively affect your credit rating--like a late pay or charge-off--is instantly beamed from the creditor to the agency via Department of Defense 256-megabit fiber optic lines and written to their servers in 8.6 milliseconds.

Information that would positively affect your credit rating is scribed onto scrolls in special ink by Gregorian monks, which are then painstakingly illuminated. The Credit Scrolls are then placed onto camel caravans which wind their way to the credit bureau headquarters by way of Marrakesh, Dubai, and Tripoli. Once the caravan reaches Equifax, Experian or TransUnion, the scrolls are then laid out in the sun for a week so that the special ink can be read. (Note that the weather around the credit bureau headquarters is notoriously gloomy, like FICO itself, so finding seven consecutive days of sunshine can be quite an ordeal in and of itself.) Only then can the information finally be encoded into your credit files...

OMG. That is hysterical.

Re: Question about Fico score and updates...

Anonymous — Tue, 23 Feb 2010 18:47:24 GMT

RFLMAO!!!!!

Re: Question about Fico score and updates...

MidnightVoice — Tue, 23 Feb 2010 23:28:34 GMT

An oldie but goldie from the late, lamented, TheNewWorldMan

I like to bring it back every now and again

Re: Question about Fico score and updates...

MRMAGOO222 — Thu, 25 Feb 2010 03:23:32 GMT

I live and work in Ohio (rural) - and we still have the store owner/managed charge account system -

I have 4 "store accounts" -

they require only a smile and thanks and timely monthly check submitted within 30 days.

maybe i live in mayberry -

but I can wave and drive off from the gas station like Barney Fife wavin at Goober.

Only thing is I can't find these accounts on my EX EQ or TU

Message Edited by MRMAGOO222 on 02-24-2010 07:23 PM

Re: Question about Fico score and updates...

SCF — Thu, 25 Feb 2010 06:42:40 GMT

Haha Mr.Magoo, I'm in the same situation. Live in a town in rural Montana and while I haven't been in town long enough to have my own store charge accounts (although I could probably get one at the hardware store if I wanted, nice folks over there) at least we never have to deal with petty cash for business purchases. I think they only recently moved to sending something more advanced than a typed version of the hand-tally of charges at the end of the month.

No CBRs involved, but I would not reccomend skipping out on your bill. See, they put a nice big list of everyone who's ever handed over a bad check, failed to settle up, or otherwise caused a financial issue on the counter right where the whole town can read it. Amazing what a powerful influence that list can have on people...

Re: Question about Fico score and updates...

Anonymous — Thu, 25 Feb 2010 07:42:01 GMT

@krazy wrote:
Hi Everyone,
Just got my credit score and i have a 725. The only recommendation that i could do right now is pay off some of my balances. I have 2 questions regarding this. First, how long does it take to affect my score? I plan on paying about 75% -95% of my debt.I found that it will show my last balance on my statement, is this correct? Second, it also said that i should carry a blance on fewer cards... I am a little confused becasue i thought if you don't use it companies might close your account or lower your CL. Is having 3 out of 5 cards with balances a better way to get a higher score. Thanks for the help.

2/22/10 Equifax 725

It takes a couple of weeks to show on your CR, usually. I still haven't had a report showing all zero balances on my cards, and that happened in early January. Might never see it.

Right now it depends on the bank and your personal finances whether or not they're lowering limits. I had one limit lowered and one account closed due to inactivity (didn't use it in the year and a half I had it). One was GEMoney, the other HSBC. I haven't had any problems with Chase, CapOne, or anyone else. You probably wouldn't have any problems. Good credit score, paying balances, can't go wrong.

Re: Question about Fico score and updates...

haulingthescoreup — Thu, 25 Feb 2010 12:04:03 GMT

SCF wrote:

Haha Mr.Magoo, I'm in the same situation. Live in a town in rural Montana and while I haven't been in town long enough to have my own store charge accounts (although I could probably get one at the hardware store if I wanted, nice folks over there) at least we never have to deal with petty cash for business purchases. I think they only recently moved to sending something more advanced than a typed version of the hand-tally of charges at the end of the month.

No CBRs involved, but I would not reccomend skipping out on your bill. See, they put a nice big list of everyone who's ever handed over a bad check, failed to settle up, or otherwise caused a financial issue on the counter right where the whole town can read it. Amazing what a powerful influence that list can have on people...

lol, our local gas/ cat food/ video/ beer/ live bait stores thumbtack bounced checks up on the wall behind the register for all to study as they stand in line. A powerful motivator for the regulars!