topic Re: Credit Card Use Question in Understanding FICO® Scoring

Credit Card Use Question

Anonymous — Sat, 15 Aug 2009 13:36:28 GMT

From what I've read, for ideal FICO scoring, you should have one account reporting a balance and total util < 9%.

My question is:

I have a few revolving accounts. I generally PIF for all of them - I do have one showing a small balance. Since I plan to use each of them on a periodic basis to keep the accounts active, from a FICO perspective, is it better to let each account report a balance on a rotating basis - showing FICO use of different accounts - or doesn't it matter - can I choose any particular account each month, or even let the same account report each month and the scores will not differ in respect to this?

Thanks.

Re: Credit Card Use Question

smallfry — Sat, 15 Aug 2009 13:47:56 GMT

Over time it shouldn't matter. The only question I would have is if you would take a small ding for letting a "dormant" account report. Maybe one of the gurus can offer some info.

Re: Credit Card Use Question

Anonymous — Sat, 15 Aug 2009 16:31:08 GMT

I think activity is coded separate from balance (at least if it is done right). That said, I try to rotate mine. Even if I have a card I primarily use. I make sure I let other cards report every now and then.

Unless you are applying for a new card, loan, or mortgage soon, I wouldn't worry about letting multiple cards report. We are probably talking about a 5-15 point difference between letting 1 card report and letting half report. That difference is not likely to worry any creditor that happens to soft you.

Be smart about your FICO - not paranoid!

Re: Credit Card Use Question

Anonymous — Sat, 15 Aug 2009 17:06:54 GMT

Make sure you use each of your bank cards once per quarter so they aren't closed for disuse.

For maximum FICO score report:

1) Total UTIL > 0 and <= 9%, the lower the better, AND

2) Report a balance on less that half of your revolving TL's, AND

3) Report a balance on half or less of all TL's

Re: Credit Card Use Question

cobaltnv — Sat, 15 Aug 2009 17:18:11 GMT

As others have mentioned you want to use your cards periodically to avoid closure (as you already appear to be doing). Activity is entirely different from balance reporting. You could let the same card report each month or rotate it makes no difference. Personally I let the same card (or two) report each month because it is easier for me.

I recently let an account that had not been used in almost 2 years report a balance an saw no score change on EQ. However, others have reported a small score ding, which recovers quickly, when a rarely used account reports a balance. The question is how long does it take for an account to go dormant? Probably much longer than the every few months that you cycle your cards.

Cheers