topic Re: How Charge Cards vs Credit Cards Report in Credit Cards

How Charge Cards vs Credit Cards Report

Anonymous — Mon, 03 Oct 2011 14:07:55 GMT

Please forgive me in advance if this is posted in the wrong thread. I know with credit cards I pay the balance down a couple of days before the statement so that it reports a low utilization. What's the best strategy with charge cards? Do i do the same thing in paying down balance before statement date??

Re: How Charge Cards vs Credit Cards Report

CS800 — Mon, 03 Oct 2011 14:22:09 GMT

I would think the same logic would work. Although since charge cards don't have a CL, the high balance could be interpreted as you CL I believe.

How does it affect the scredit score, i dont know. Im hoping someone would pitch in on this one.

Re: How Charge Cards vs Credit Cards Report

Anonymous — Mon, 03 Oct 2011 17:58:58 GMT

I agree... I'm wondering how they do UTIL then since there is no real limit.. Any help would be greatly appreciated.

Re: How Charge Cards vs Credit Cards Report

flyingmd — Mon, 03 Oct 2011 19:13:10 GMT

Depends on the Bank. Some banks report the "limit" on their NPSL cards and some dont. I believe there was a thread about which ones report and which dont in the last few weeks.

Re: How Charge Cards vs Credit Cards Report

Anonymous — Mon, 03 Oct 2011 19:18:59 GMT

hmm i'll look into it.. its amex

Re: How Charge Cards vs Credit Cards Report

CS800 — Mon, 03 Oct 2011 19:21:45 GMT

Balances on charge cards are not factored into a person’s revolving utilization ratio I believe.

Re: How Charge Cards vs Credit Cards Report

Anonymous — Mon, 03 Oct 2011 19:24:41 GMT

That'd be great if that's the case

Re: How Charge Cards vs Credit Cards Report

CS800 — Mon, 03 Oct 2011 19:39:01 GMT

But every other thing apply to FICO scoring i.e.

Age of account

Payment History

Credit Mix

Re: How Charge Cards vs Credit Cards Report

Anonymous — Tue, 04 Oct 2011 15:22:06 GMT

Actually a charge card is figured in the utilization totals in the TU 98 score format which we can buy on MyFICO. It is not calculated in the newer versions of the TU scoring (TU04, etc.). I have no idea how it is handled in the specialized scoring categories such as auto and credit card versions.

A charge card is not factored in utilization on the EQ scoring available here (Beacon 5.0?) and on the commonly used EX scoring. You are correct in that it does affect all other FICO scoring categories such as age and payment history.

Re: How Charge Cards vs Credit Cards Report

CS800 — Tue, 04 Oct 2011 18:36:42 GMT

Yikes on the TU98. If I charge $5000 on my charge card,and if my balance is factored in my utilization, then my util will be 160%.

Am I right to assume this?

Re: How Charge Cards vs Credit Cards Report

RyVision — Tue, 04 Oct 2011 21:03:12 GMT

@CS800 wrote:
Yikes on the TU98. If I charge $5000 on my charge card,and if my balance is factored in my utilization, then my util will be 160%.

Am I right to assume this?

No, across all scoring methods the one thing you can count on is a cards limit is ITS' own limit. A NPSL is just that, flexible, the CRA's all know that, so if you charge 5000 on your charge card (the issuer approved it or it wouldn't be posting), that is the MINIMUM limit for that card at that point in time and does NOT "spill over" onto your other limits. Now if the card is closed and you don't PIF right away, it WILL affect your score as it would be factored in as being the card is closed, and it has a zero limit at that point. The scoring models can not "use" the available credit on your other lines, but it will SCORE you as though you were at 160% util without stating it being phrased that way as well as factoring in a closed account with a zero limit being 5k over the credit line (at that point you can expect quick AA from your other creditors along with all your scores diving). Only the charge card itself would be considered "maxed out" at it's high limit while open and in good standing.

Hope that helps a bit with that concern.

Re: How Charge Cards vs Credit Cards Report

AndySoCal — Wed, 05 Oct 2011 01:43:30 GMT

If the balance is due in full each month then it is not included in your FICO util.