topic Re: Lesson learned - keep balance on only 1 card! in Credit Cards

Lesson learned - keep balance on only 1 card!

BluePoodle — Wed, 16 Apr 2014 17:50:22 GMT

Ok, I tried to pay one of my cards down to 0 Balance, but I guess I messed it up!

I have only two cards to begin with and one I am keeping a balance on because of 0% financing

But the second card I attempted to PIF! I botched it and it reported $5 instead of 0

So when I finally got it to report this month at 0, I gained four points!

I just got my score report change today! So I will take it!

Not sure how I messed up....but I will try to keep a closer eye on it and make sure it doesn't happen again!

Re: Lesson learned - keep balance on only 1 card!

suliabryon — Wed, 16 Apr 2014 17:55:23 GMT

So if I am understanding correctly, a balance of $5 on one of your cards led to a 4 point difference? Wow.

Re: Lesson learned - keep balance on only 1 card!

BluePoodle — Wed, 16 Apr 2014 17:57:35 GMT

@suliabryon wrote:
So if I am understanding correctly, a balance of $5 on one of your cards led to a 4 point difference? Wow.

Correct! So I just thought I would share it here so others might be able to learn and make necessary corrections to help with their credit scores. Just think about those with more than two cards that have low balances on mulitple cards!!!! It could really make a difference!

Re: Lesson learned - keep balance on only 1 card!

arrazola_a — Wed, 16 Apr 2014 17:59:30 GMT

@suliabryon wrote:
So if I am understanding correctly, a balance of $5 on one of your cards led to a 4 point difference? Wow.

a 20 balance on my gas card dropped my score 18 points. once it reported as 0 it jumped back up to where it was.

edit for spelling

Re: Lesson learned - keep balance on only 1 card!

BluePoodle — Wed, 16 Apr 2014 23:51:38 GMT

@arrazola_a wrote:
@suliabryon wrote:
So if I am understanding correctly, a balance of $5 on one of your cards led to a 4 point difference? Wow.
a 20 balance on my gas card dropped my score 18 points. once it reported as 0 it jumped back up to where it was.

edit for spelling

Personally, I don't think it is fair to have such small balances negatively hurt your scores like this. But this is the game we play I guess!

Re: Lesson learned - keep balance on only 1 card!

Gunnar419 — Thu, 17 Apr 2014 00:14:16 GMT

@BluePoodle wrote:
@arrazola_a wrote:
@suliabryon wrote:
So if I am understanding correctly, a balance of $5 on one of your cards led to a 4 point difference? Wow.
a 20 balance on my gas card dropped my score 18 points. once it reported as 0 it jumped back up to where it was.

edit for spelling
Personally, I don't think it is fair to have such small balances negatively hurt your scores like this. But this is the game we play I guess!

I agree, its ridiculous. It's obviously also a typical practice. I recently lost 11 points for having a card with a $10k CL report an $82 balance. Just arbitrary and silly.

At least it's something that can be fixed in short order.

Re: Lesson learned - keep balance on only 1 card!

NoAnchoviesPlease — Thu, 17 Apr 2014 00:41:26 GMT

I was frustrated by this recently as well... got declined for a restoration of credit line in part because of a couple of balances based on last month's interest. Probably less money than is in my cleaning-out-my-pockets change bowl on my dresser.

But if I've had anything utterly clarified for me, it's that creditors aren't here to be fair. If they were, they'd report the balance before interest. And do all sorts of other less profitable, less capricious, more consumer-friendly/customer-driven things as well.

I also think landlords who demand or check credit reports but don't report your performance to the CRAs should be fined, but that's probably never going to happen either.

Re: Lesson learned - keep balance on only 1 card!

stlsme — Thu, 17 Apr 2014 00:46:14 GMT

I had the same thing. $40 balance was 17 points. Comes down to how many balances on cards car loans and regular loans. That same card should report tomorrow. I want those points back.

Re: Lesson learned - keep balance on only 1 card!

Anonymous — Thu, 17 Apr 2014 00:53:54 GMT

@Gunnar419 wrote:
@BluePoodle wrote:
@arrazola_a wrote:
@suliabryon wrote:
So if I am understanding correctly, a balance of $5 on one of your cards led to a 4 point difference? Wow.
a 20 balance on my gas card dropped my score 18 points. once it reported as 0 it jumped back up to where it was.

edit for spelling
Personally, I don't think it is fair to have such small balances negatively hurt your scores like this. But this is the game we play I guess!
I agree, its ridiculous. It's obviously also a typical practice. I recently lost 11 points for having a card with a $10k CL report an $82 balance. Just arbitrary and silly.

At least it's something that can be fixed in short order.

To the best of my knowledge, these kinds of scoring rules are not pulled out of thin air, but are based on analysis of actual reports, with a typical lag of two years. In other words, an attempt is made to isolate factors in the first report for a person, that explain what is seen in the second report (such as a serious delinquency).

Suppose that I have 20 cards, and l let a $5 balance report on each of them. That's only $100, and my overall utilization will be very low.

However, it's possible that this sort of behavior indicates trouble ahead, and it might suggest at a minimum that my financial life is pretty scattered and not fully under my control.

Re: Lesson learned - keep balance on only 1 card!

stlsme — Thu, 17 Apr 2014 05:04:54 GMT

For me fico said too many accounts with balances. Not all credit cards. I invest in real estate so have several mortgages.

Re: Lesson learned - keep balance on only 1 card!

ways2go — Thu, 17 Apr 2014 05:17:24 GMT

I find that you shouldn't really worry about your fico score changing a few points, unless you are going apply for credit. Keep your accounts up to date and keep control of your balances and you should be fine. I finally come to the conclusion that fico scoring is what it is, and its mind boggling how they do the scoring. It'll drive you batty thinking and worrying about it.