topic Re: Suddenly Keeping A Balance Effects in Understanding FICO® Scoring

Suddenly Keeping A Balance Effects

Anonymous — Wed, 17 Oct 2018 21:51:33 GMT

I currently have 60k available credit among my 10 credit cards. I normally let $500 report on my $10,000 limit discover. I had a medical emergency and have to keep a balance of $3,500 on my discover with the rest reporting $0 until I get my bonus in January when I can pay off the full balance. My average spend on discover is about $1,200 a month paid in full which I will continue to do with the $3,500 sitting there being paid down by about $200 a month until my bonus. My question because I've never carried a balance is how will effect my score having one card report a 30%+ balance for 4 months. All of my cards are 6months old or older so I dont believe it will cause any AA but I'm new to the whole carrying a balance thing. Any advice is appreciated from those who normally carry a somewhat large balance.

Re: Suddenly Keeping A Balance Effects

Anonymous — Wed, 17 Oct 2018 22:13:32 GMT

You’ll be carrying a 5.8% balance for 3 months and chipping away at it and then paying it off. You’ll have a negligible, if any, effect on your scores, which won’t matter anyway. Don’t sweat it. Credit lines are there to be used, not just preserved like a classic Ferrari.

Re: Suddenly Keeping A Balance Effects

HeavenOhio — Thu, 18 Oct 2018 00:11:04 GMT

The bottom line is that you're going to be fine.

Scoring based on your overall utilization is likely to be unaffected. You'll probably be dinged for your individual card utilization going over 28.9%. However, some report not being dinged until exceeding 48.9%.

Discover is going to be fine. They're extremely tolerant of people carrying balances with much higher utilization and over much longer periods than you're planning on. Your balance isn't going to be high enough for your other lenders to care about.

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 18 Oct 2018 00:50:16 GMT

Thank you for your responses I figured everything would be fine it's just nice to have reassurance.

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 18 Oct 2018 01:24:58 GMT

At most, you'd probably experience a 3-5 point ding for your individual card utilization landing in the 28.9%-48.9% range. On some profiles, this number would be 0 points.

AA doesn't happen from utilization alone... definitely not from 35% utilization on a single account. I've known people that have rolled with 96%-100% utilization on every card (6-7) they have (98% aggregate utilization) for nearly a year without experiencing AA, so long as they were always making their payments on time every month. Miss 1 payment and all bets are off and it's game on for your lenders to take AA. My point here is that you have absolutely nothing to lose any sleep over. In fact, it would probably be a good time to hit Discover up for a SP CLI. Many people have reported favorable CLI results with their Discover utilization in the 30% range as opposed to single-digit [ideal] utilization.

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 18 Oct 2018 12:11:28 GMT

You were right Brutal. I just recieved a cli of $3,000 with discover two months ago so I hit the love button with this new balance and they gave me $500 increase. It's not much but nice to get another increase after just receiving one such a short time ago.

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 18 Oct 2018 12:21:06 GMT

Nice job, glad to hear you got something!

With Discover, I suggest requesting a CLI every month following your FICO score updating on their site. I went a period of 38 weeks where I requested one every single week, every Monday morning. There's no harm in trying often and on occasion you'll get a better (>$500) CLI which could help your utilization a bit.

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 18 Oct 2018 12:27:14 GMT

Thanks Brutal. That's awesome I didn't realize Discover gave sp cli so frequently. I'm used to being told wait 6 months and try again. Still waiting for that mark with CapOne and Citi.

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 18 Oct 2018 12:31:51 GMT

Yeah, 6 months is pretty standard with many lenders like Cap One, Citi, Amex, etc. Discover is known to give CLIs out much more frequently. Don't get me wrong, there are people that go 6+ months without getting a Discover CLI. My longest period of time without receiving one (while requesting one very frequently) was 10 months. In fact, I think I'm at about 8 months now. I have to weigh that against periods of time though where I received frequent CLIs, like 4 of them over a 6 month period for example. On my account they've sort of come in waves. The only way I'd know this though is from making frequent requests. If I was only requesting every 3-6 months for example, I would have never received the waves of CLIs that were possible at times.

Re: Suddenly Keeping A Balance Effects

Queen_Etherea — Thu, 25 Oct 2018 17:08:14 GMT

@Anonymous wrote:
At most, you'd probably experience a 3-5 point ding for your individual card utilization landing in the 28.9%-48.9% range. On some profiles, this number would be 0 points.

AA doesn't happen from utilization alone... definitely not from 35% utilization on a single account. I've known people that have rolled with 96%-100% utilization on every card (6-7) they have (98% aggregate utilization) for nearly a year without experiencing AA, so long as they were always making their payments on time every month. Miss 1 payment and all bets are off and it's game on for your lenders to take AA. My point here is that you have absolutely nothing to lose any sleep over. In fact, it would probably be a good time to hit Discover up for a SP CLI. Many people have reported favorable CLI results with their Discover utilization in the 30% range as opposed to single-digit [ideal] utilization.

What does AA mean?

Re: Suddenly Keeping A Balance Effects

Anonymous — Thu, 25 Oct 2018 17:10:58 GMT

AA = Adverse Action. It means the lender does something that affects your account such as lowering your credit limit suspending your account or closing the trade line altogether.