topic Re: How Should I Let These New Cards Report? in Credit Cards

How Should I Let These New Cards Report?

JamesKnox — Sat, 05 Oct 2013 22:14:51 GMT

Okay so I got my Secured BofA card ($300) like 2 months ago and have always let it report at 1% UTIL.

I have now added Amazon ($800) and WalMart ($1000). I want to know how should I let these report? Do I let them report at 1% as well OR do I continue to allow my BofA to report at 1% and let these two cards report at $0?

Thoughts?

Re: How Should I Let These New Cards Report?

hrdsurfer — Sat, 05 Oct 2013 22:24:51 GMT

I think as long as your total Util is below 10% you'll be golden. It doesn't really matter as far as the individual card is concnerned.

Re: How Should I Let These New Cards Report?

Anonymous — Sat, 05 Oct 2013 22:57:18 GMT

Your score decreases (perhaps only slightly) if you have anything other than one card reporting a balance (i.e 0 and 2 to n is less good than 1).

Re: How Should I Let These New Cards Report?

Anonymous — Sat, 05 Oct 2013 23:27:17 GMT

With 1-4 cards, I always let 1 card report at <10% of the card's limit and at 1-2% of the total credit line.

With 5-10 cards, I let 2 cards report at <10% of each card's limit and 1-2% of the total credit line.

Re: How Should I Let These New Cards Report?

JamesKnox — Sun, 06 Oct 2013 00:11:59 GMT

Okay so basically...I should let 1 card report at 1% UTIL and the other two report at $0 --- CORRECT?

Re: How Should I Let These New Cards Report?

Anonymous — Sun, 06 Oct 2013 00:12:49 GMT

@Anonymous wrote:
With 1-4 cards, I always let 1 card report at <10% of the card's limit and at 1-2% of the total credit line.

With 5-10 cards, I let 2 cards report at <10% of each card's limit and 1-2% of the total credit line.

OK, so do you find that better than 1 card reporting regardless of the number of cards?

Re: How Should I Let These New Cards Report?

aspen12777 — Sun, 06 Oct 2013 00:21:07 GMT

This would be to maximize CS correct?

What about trying to get auto CLI. Is it lender specific or is there a general best practice if you will?

Re: How Should I Let These New Cards Report?

Themanwhocan — Sun, 06 Oct 2013 00:38:01 GMT

@JamesKnox wrote:
Okay so basically...I should let 1 card report at 1% UTIL and the other two report at $0 --- CORRECT?

Well, one card report between 1% and 9%, but basically yes.

Assuming you are preparing to apply for more credit (new card, CLI, loan, etc)

I don't think you want your credit reports to appear as if you have a bunch of credit cards, yet they are almost always at 0 utilization. Doesn't look right for one thing, and why should someone give you more credit (either a new card, or a CLI) when it doesn't look like you use your existing cards very much. They give you credit because they make money when you use the credit cards... there is no profit in giving more credit to those who don't use it, as they lose money due to inflation that way.

Its also a waste of time to be doing this all the time when there is no need to.

Re: How Should I Let These New Cards Report?

parakleet — Sun, 06 Oct 2013 00:53:13 GMT

+1 @themanwhocan

It seems like there's a little too much emphasis on the "only let 1% report" obsession. If you're going to get technical about it, like the above poster stated, it's anything UNDER 10% on ONE of your cards. But I would think it looks weird to constantly be micromanaging your report that way so that nothing ever reports anything. Grant it, if the CL on all your cards are only $300, it's probably not a good idea to make it look like you're always maxed out either.

Re: How Should I Let These New Cards Report?

Anonymous — Sun, 06 Oct 2013 02:18:28 GMT

@Anonymous wrote:
@Anonymous wrote:
With 1-4 cards, I always let 1 card report at <10% of the card's limit and at 1-2% of the total credit line.

With 5-10 cards, I let 2 cards report at <10% of each card's limit and 1-2% of the total credit line.
OK, so do you find that better than 1 card reporting regardless of the number of cards?

The reason I did this is I don't like to have a card reports > 10% of its balance.

With 5+ cards, 10% of that card is < 1% of the total credit line. Thus I let 2 cards report.

I haven't check which one is better between let only one card reports and let two cards report though.

Re: How Should I Let These New Cards Report?

takeshi74 — Sun, 06 Oct 2013 03:55:58 GMT

@JamesKnox wrote:
Okay so basically...I should let 1 card report at 1% UTIL and the other two report at $0 --- CORRECT?

Correct if you're trying to maximize your score. However, there's not much point unless you're applying for something. There's no record retained of your utilization. When you apply they pull your report(s) and use it to determine your utilization at that point in time.

Re: How Should I Let These New Cards Report?

lg8302ch — Sun, 06 Oct 2013 04:45:55 GMT

What also needs to be watched out for Fico score is the number of accounts reporting a balance. As I have no intention to app for anything for the moment I did a small experiment to test and challenge SW. First test was to have 7 accounts report with 0$ and 1 account with a balance of 10% which left overall util also less than 7%. Result: EQ Fico 793 with ideal reporting. Then I started to test the impact with 6 out of 8 accounts to report a balance of 1$ only and two accounts with 10% - overall still less than 7%....wow … heavy ding of 21 points just to let a 1$ balance report on account 5…50% - rule??? EQ Fico dropped to 741. Now it comes the very big surprise. Just last month I repeated the exact same and let report 6 out of 8 accounts with balances of up to 10% and my Chase Freedom at 77% - overall util still less than 7% but EQ Fico tanked to the exact same number 741. So my resume the single nearly maxed out card did not have an impact for me. 1$ balance reporting or 3200$ balance reporting on my Chase Freedom with a 4K limit came to the exact same result – score tanked to 741. Looks to me that Fico does not like 50% or more cards reporting a balance. But do not play around like me because you might also not recover… while Equifax has updated my balances two days ago and Fako scores moved up again.. Fico SW did not move and stayed at 741 even if paid down the 77% util ---- I guess this is punishment for playing around…LOL..

Edit: above testing was done with Amex still reporting at 10K

Re: How Should I Let These New Cards Report?

Anonymous — Sun, 06 Oct 2013 12:46:41 GMT

This is the best post I've ever seen on this topic:

Themanwhocan wrote:

First you should realize that there are 2 groups that you are trying to impress, and they are to some extent complete opposites.

You want to impress the credit card companies. You want to show them that you have credit cards, that you are using them, and that you are paying them off regularily (ideally every month). These companies will decide if they want to loan you more of their money, and they are concerned with risk, and return on investments, etc. So usually for these companies you want to have your monthly charges report to the credit bureaus, then pay in full before you are charged any interest. And don't use too much of any one card, ie, don't rack the card up close to 100%, that can be interpreted as you are finding it difficult to meet your expenses, etc. Appearing desperate is never good.

The second group you want to impress is FICO. They generate a credit score. They don't loan you money, they don't care about your credit history. All they care about is the present moment, the current snap-shot of your credit risk. They will sum up your entire credit worthiness in the form of a number. And only a number.

So, when you want to 'play the game', remember that you are not just a number (except to FICO, and they don't give you a loan or a credit card, now do they?).

Most of the time, just use your card a reasonable amount, let it report, and immediately pay in full. Create that rich, robust credit report that the credit companies want to see. Sure they look at that Fico number, but thats not all they look at, so give them what they want.

As to the FICO score, why its always fluxuating a bit, so why not try to optimize it right before you apply for more credit. At that time, and only that time, try to get one credit card to report 1% - 9% and the rest of them report 0%. You have to figure out what date each card reports to the credit bureaus and pay off each cards just before that. For some credit cards that will be approximately the date that the new statements are created. For others it will be a different date (example: US Bank and ELAN cards report your balance near the last day of the month).

Its really as simple as that.

Re: How Should I Let These New Cards Report?

vanillabean — Sun, 06 Oct 2013 14:04:40 GMT

@Themanwhocan wrote:

I don't think you want your credit reports to appear as if you have a bunch of credit cards, yet they are almost always at 0 utilization. Doesn't look right for one thing, and why should someone give you more credit (either a new card, or a CLI) when it doesn't look like you use your existing cards very much. They give you credit because they make money when you use the credit cards...

The thing though is that the lender in question can see (because that's who reports) whether the reported balance is $0 because you don't use your card (in which case it may be closed due to inactivity) or because you pay it down before the statement date (which is fine either way).

@lg8302ch wrote:

So my resume the single nearly maxed out card did not have an impact for me.

A card that's maxed out will have the most impact when the rest of your cards are at $0. And having balances on more than half of your cards will hit you the hardest when that's the only thing that's not clean.

@parakleet wrote:

It seems like there's a little too much emphasis on the "only let 1% report" obsession.

There is. That's not where it's at. The key to credit card health is to avoid carrying over any balance to the next billing cycle and then always to have balances on less than half of your cards. 1% on one card and 0% on the rest is lipstick.

Re: How Should I Let These New Cards Report?

Themanwhocan — Sun, 06 Oct 2013 16:14:24 GMT

@Anonymous-own-fico wrote:
@Themanwhocan wrote:
I don't think you want your credit reports to appear as if you have a bunch of credit cards, yet they are almost always at 0 utilization. Doesn't look right for one thing, and why should someone give you more credit (either a new card, or a CLI) when it doesn't look like you use your existing cards very much. They give you credit because they make money when you use the credit cards...
The thing though is that the lender in question can see (because that's who reports) whether the reported balance is $0 because you don't use your card (in which case it may be closed due to inactivity) or because you pay it down before the statement date (which is fine either way).

The 'lender in question' doesn't base their credit decisions only on their own internal data. They pull a credit report so they can see the data for all your creditors.

And when the numbers that have been reported on the credit reports show a consistent pattern of almost all credit lines being at 0 month after month, if not year after year, that isn't going to look like someone who is a profitable customer. It doesn't look like someone that we can give a credit line increase to, and then they might use our card more instead of our competitors cards. If we steal away a percentage of those $0 usages, well, for some reason the computer is saying thats not likely to be profitable...

Re: How Should I Let These New Cards Report?

Anonymous — Sun, 06 Oct 2013 16:16:16 GMT

Themanwhocan, hope you didn't mind me posting your post, it just seemed very relevant.

Re: How Should I Let These New Cards Report?

Themanwhocan — Sun, 06 Oct 2013 16:29:43 GMT

@Anonymous wrote:
Themanwhocan, hope you didn't mind me posting your post, it just seemed very relevant.

No problem. Though apparently people still have questions after reading it

Interesting side note: the reason I was able to write that post originally, was because I had to leave work early due to a Migraine. Yep, I had a Migraine headache while writing that post.

Re: How Should I Let These New Cards Report?

Anonymous — Sun, 06 Oct 2013 18:47:30 GMT

@Anonymous-own-fico wrote:

@parakleet wrote:

It seems like there's a little too much emphasis on the "only let 1% report" obsession.
There is. That's not where it's at. The key to credit card health is to avoid carrying over any balance to the next billing cycle and then always to have balances on less than half of your cards. 1% on one card and 0% on the rest is lipstick.

Well, for many even that is going too far! The basic key is just your first point, don't carry balances (and certainly not if you are outside a 0% phase). The balance on less than half the cards is "merely" FICO score optimization and so is lipstick as well.

Re: How Should I Let These New Cards Report?

youngandcreditwrthy — Mon, 07 Oct 2013 01:40:59 GMT

Congrats on those cards!!! Glad you went for it!

Re: How Should I Let These New Cards Report?

JamesKnox — Mon, 07 Oct 2013 05:31:14 GMT

Thanks young.

I really have to stay in the garden because I realllllly want Discover IT, AMEX PRG and CSP and BMW Lease.

Goals are...

BMW Lease - February

Discover IT/Amex PRG - March

CSP - At least by Fall 2014