topic Re: High Balance in Credit Cards

High Balance

elim — Sun, 29 Jun 2014 18:40:07 GMT

i can see on my CR's that before my past credit meltdown the "high balance" areas of my revolving accounts were very high (4.7k of 5k, etc.). with my new low limit cards it is hard to keep that number below a decent % but if and when i get some luv... "below what percentage should a keep my Historic High Balance on each card and how important is it?"

Re: High Balance

adavis425 — Sun, 29 Jun 2014 18:47:23 GMT

Some say 30% is ideal. For optimal scoring, if that's what you're after, 10% (or less, but not 0) of your total CL on one card seems to be the magic number. YMMV, of course.

Re: High Balance

Anonymous — Sun, 29 Jun 2014 18:49:29 GMT

Agree with the other poster.

Re: High Balance

SevenNEW — Sun, 29 Jun 2014 18:52:51 GMT

@Anonymous wrote:
Agree with the other poster.

+1. More in detail, let only one card report below 10%, and pay off the other cards before the statement is generated, so that they will report 0.

Re: High Balance

elim — Sun, 29 Jun 2014 18:57:48 GMT

yeah my balances report between 1% and 9% each month but i have high balance of 80%. i have $500 limits so i guess anything that costs more than $45(9%) or $150(30%) i'll have to pay cash until CLI? back to the debit cards. thanks

Re: High Balance

ezdoesit — Sun, 29 Jun 2014 18:59:44 GMT

@elim wrote:
i can see on my CR's that before my past credit meltdown the "high balance" areas of my revolving accounts were very high (4.7k of 5k, etc.). with my new low limit cards it is hard to keep that number below a decent % but if and when i get some luv... "below what percentage should a keep my Historic High Balance on each card and how important is it?"

I would keep my total util under 10% and have no card reporting more than 30%.

Re: High Balance

elim — Sun, 29 Jun 2014 19:02:17 GMT

in my CR's i have a "Balance" that reported that month. and a "high balance" that has never been a statement balance. it was just my biggest purchase that was PIF the next day. that is the stat i'm refering to.

Re: High Balance

SevenNEW — Sun, 29 Jun 2014 19:13:21 GMT

Ah, so it's a balance that never reported. I don't really know, but my sense is I doubt it would be relevant for your score, nor that it would really change any lenders' view of your file. One thing is to make a large purchase and pay responsibly, another is to carry a balance for months and show you are not able to pay it off.

Re: High Balance

elim — Sun, 29 Jun 2014 19:21:19 GMT

yeah for rewards i put all of my purchases on 1 of 2 $500 limit cards and pif ($400) 3 or 4 times a month and leave a $10 balance to report. it must matter if there is a place on my CR's for that mid statement balance. hrmmm, i think i'll play it safe and never buy anything bigger than $300 on a $1k card before PIF. thanks again

Re: High Balance

Anonymous — Sat, 05 Jul 2014 14:25:49 GMT

I am also interested to know how "High Balance" affects credit scores.

There seems to be some confusion in this thread about the term. "High Balance" is just another field on my credit report that is reported among other things such as statements balance and credit limit. Experian defines it as "The highest amount that you have owed on an account to date." (http://www.experian.com/credit-education/glossary.html#h). Some banks do not even report it at all (e.g. BoA) while others do (e.g. AmEx, Cap1).

From my practical experience it appears High Balance is not taken into consideration by the FICO score algorithm but I just wanted to double check with others who are more knowledgable on the subject than me.

Thanks for your responses!

Re: High Balance

SnackTrader — Sat, 05 Jul 2014 18:35:45 GMT

@Anonymous wrote:
I am also interested to know how "High Balance" affects credit scores.

There seems to be some confusion in this thread about the term. "High Balance" is just another field on my credit report that is reported among other things such as statements balance and credit limit. Experian defines it as "The highest amount that you have owed on an account to date." (http://www.experian.com/credit-education/glossary.html#h). Some banks do not even report it at all (e.g. BoA) while others do (e.g. AmEx, Cap1).

From my practical experience it appears High Balance is not taken into consideration by the FICO score algorithm but I just wanted to double check with others who are more knowledgable on the subject than me.

Thanks for your responses!

I don't believe that High Balance is considered in FICO, at least in any FICO model I have ever been introduced to. The only area it would ever come up is in manual review of a credit relationship, and it may help other lenders see that you make good use of your line of credit. This means profit to the lender, so my opinion is that it makes you more desirable UNLESS your high balance is greater than your credit line. That may signal that you are an over spender. Either way, it shouldn't make much of a difference in the long run since most CC applications are reviewed by a computer and the manual reviews for things like mortgages care much more about payment history, debt payments, etc. It is definitely something that shouldn't keep you up at night.

Re: High Balance

Florida1990 — Sat, 05 Jul 2014 19:02:45 GMT

30% percent is what most people say I aim for less than 10% and keep maybe 1-3% revolving because some banks and lenders actually like to see utilization of credit.

Re: High Balance

core — Sat, 05 Jul 2014 19:07:41 GMT

I don't see how high balance could legitimately be used for anything, even if it's way over your credit limit. Say in 2001 I had a $20k CL and put $10k on the card as high balance. Now this year I SD the card (because of no rewards) and request a CLD to $1k to "make room" for cards I actually want. My high bal is 10x my limit. Does this make me an overspender? Of course not. This is ridiculous.

Re: High Balance

SnackTrader — Sat, 05 Jul 2014 20:07:19 GMT

@Florida1990 wrote:
30% percent is what most people say I aim for less than 10% and keep maybe 1-3% revolving because some banks and lenders actually like to see utilization of credit.

The OP isn't talking about utilization - the discussion is about the highest balance ever obtained on the card which reports as a separate piece of information on a credit report called "Highest Balance".

While banks want to see you revolve a balance because it becomes pure profit, why would you want to give away your money just to make them happy? Revolving a balance does nothing for you in the long run except transfer your wealth to a corporation that will dump you the minute they deem you a significant credit risk. I suggest that you never revolve a balance unless necessity mandates it. Lenders can see internal use without you ever revolving a balance.

Re: High Balance

PandiferBear — Sat, 05 Jul 2014 22:46:44 GMT

FWIW, I remember when I called to recon my Barclay card, their rep said they wanted to see more how I would use my $2000 limit (newish and highest limit) QS1. My high balance would have been low on it at the time, as I kept it under 10%. He even suggested using it closer to the $2000 limit. I assume he was looking at the "high balance" field when he suggested this. It shows them how much of your credit line you have utilized and whether you did it responsibly. An argument could be made that having a high "high balance" and perfect payment history and low current utilization shows you as able to charge and pay off large amounts responsibly, and hence lower risk for a larger CL.

Re: High Balance

elim — Sat, 05 Jul 2014 23:06:07 GMT

thanks, i was wondering if it was used more by the lenders than anyone else. my next step is CLI's so maybe my high "high balances" will be fine, my UTIL was 8% when i checked today. My chase amazon "high balance" was $400.00 on it's $500.00 CL with 5% UTIL. after statement #2 they auto-CLI'd 2x to 1k. that was this week. with a charge-off and open tax lien.

Re: High Balance

s_haliz — Sun, 06 Jul 2014 00:33:32 GMT

@core wrote:
I don't see how high balance could legitimately be used for anything, even if it's way over your credit limit. Say in 2001 I had a $20k CL and put $10k on the card as high balance. Now this year I SD the card (because of no rewards) and request a CLD to $1k to "make room" for cards I actually want. My high bal is 10x my limit. Does this make me an overspender? Of course not. This is ridiculous.

I am in a somewhat similar situation as yours. In 2010, I had opened a credit card with 0% APR for 15 months and $20,000 CL. I had put up $15,000 on it and paid off within 12 months. Then did not use the card at all. They had reduced CL to $1,500.......Of course I am not using that card at all. So 0% utilzation at the moment for few years. Now if someone who is going to review manually is going to think that my utilization rate is 1000%....???? Could be plain and simple insane if that is the case.