topic Re: Exactly When Do CC Companies Report Balances to Credit Bureaus? in Understanding FICO® Scoring

Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Thu, 04 Mar 2010 06:47:59 GMT

Hi, this is my first post, thanks in advance to anyone who replies...

This is an issue that could really help anyone pursuing a mortgage in developing their strategy:

A common technique to quickly boost a credit score is to pay down revolving debt, to decrease the credit utilization ratio.

However, one must wait until these new, lower balances are reported to the credit bureaus, before any benefit to the credit score will be realized.

Thus, for timing purposes, it is helpful to know when you can expect the credit card company to report the new balance to the credit bureaus.

Does anyone have experience/knowledge of when the major CC companies (Citi, Bank of America, Capital One) report the new balances?

My guess is that it would be sometime shortly after the close of the monthly statement.

If so, how prompt are they...same day? ...a week after?

Thanks!!! I've got to get the mortgage soon, and get the rate locked before the Fed stops buying them up at the end of March!

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Thu, 04 Mar 2010 06:50:45 GMT

Most cc's report to the CRAs on the statement date. It then takes the CRA's a few days (even up to a week) to update.

Best wishes on your mortgage!

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

haulingthescoreup — Thu, 04 Mar 2010 12:18:36 GMT

+1

And HSBC/ Orchard bank cards and US Bank cards report your balance as of the last business day of the month. US Bank updates that night, but HSBC/ Orchard takes its time, as in up to two weeks or maybe even skipping a month for the heck of it.

For anyone wanting/ needing to control the number of cards reporting balances, HSBC/ Orchard cards are the ones that you want to get to $0 and keep reporting $0, because it can take forever for them to get around to updating.

OP, the new balance is often on your full Experian report the next day, but Equifax and TU routinely take anywhere from 5 days to 2 weeks to update.

Plan on zeroing out all but one of your balances 6 weeks before mortgage time, and keep them that way until your scores are pulled. Let one card report a balance of ten bucks or so and then immediately pay it off. For many of us, all cards reporting $0 results in a score drop --normally not a huge one, but if you're fine-tuning your scores for the best mortgage rate, you'll want every point.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Fri, 05 Mar 2010 06:51:39 GMT

Thanks for the advice!

Deciphering these policies could really help anyone who's attempting to fine-tune their credit score before a mortgage/HELOC/car loan.

For what it's worth, I asked my mortgage lender today and she said the new credit card balances are "typically posted between the 10th and 20th of the month".

A more general question is:

Why are the inner workings of the credit agencies such seemingly covert operations?

Everyone's always trying to figure what the impact of X, Y, or Z on their score will be, and usually no one seems to have a clear answer.

How did we get into such a situation where secretive computer algorithms weild massive control over our major life decisions?

Every situation is different, and it seems that often a computer-generated score may not accurately depict our true credit risk.

I think the algorithms should be made public, to enable the people to have the power to better control their own financial destiny.

Of course, I wouldn't expect Fair-Isaac to take kindly to the idea...

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Lel — Fri, 05 Mar 2010 07:38:29 GMT

ParadigmShift wrote:

Thanks for the advice!
Deciphering these policies could really help anyone who's attempting to fine-tune their credit score before a mortgage/HELOC/car loan.
For what it's worth, I asked my mortgage lender today and she said the new credit card balances are "typically posted between the 10th and 20th of the month".

A more general question is:
Why are the inner workings of the credit agencies such seemingly covert operations?
Everyone's always trying to figure what the impact of X, Y, or Z on their score will be, and usually no one seems to have a clear answer.
How did we get into such a situation where secretive computer algorithms weild massive control over our major life decisions?
Every situation is different, and it seems that often a computer-generated score may not accurately depict our true credit risk.
I think the algorithms should be made public, to enable the people to have the power to better control their own financial destiny.
Of course, I wouldn't expect Fair-Isaac to take kindly to the idea...

The information that comprises a credit score is known, but the exact way that the score is calculated is proprietary information. The FICO models were developed over years of research and is continually being refined. I have no idea what the "formula" looks like - it is certainly a very complex mathematical model, but even if this were made publicly available, I don't it would necessarily shed any more light about what is known about FICO scores and how they generally react to different factors.

Like you mentioned, each situation is different. And it's pretty clear to me from all the stories posted on these forums that the way that one's score might change is highly individualized. Some people have seen big score drops from opening a new account; others have not. I just had a CC inquiry hit my report and my score didn't budge, whereas some people have lost 10 points or more. Having access to the pages and pages of code that goes into the calculation of a FICO score isn't going to make these differences any more understandable (at least not to me! ).

The basic components of the FICO score are publicly known; you can read about them in the Credit Scoring 101 thread. This has been sufficient for most folks here to understand how different credit decisions (and credit mistakes) affect their FICO scores. It's never going to be possible to precisely predict how one's score will change in response to any single action even if we all had access to the secret FICO recipe, because each person's credit profile is different.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

marty56 — Fri, 05 Mar 2010 10:37:45 GMT

@Anonymous wrote:
I think the algorithms should be made public, to enable the people to have the power to better control their own financial destiny.
Of course, I wouldn't expect Fair-Isaac to take kindly to the idea...

Not really. The only thing making FICO scores public would be to generate your FICO score on the fly. Everyone knows what to do and not do in terms of having a good FICO score. Pay bills on time, low CC usage and keep new accounts at a minimum. Credit scores are all about predicting risk. They may not be perfect but they are consistant.

As I have said before, do what is correct for your credit and the scores, any score, will take care of themselves.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Fri, 05 Mar 2010 22:02:58 GMT

ParadigmShift wrote: I asked my mortgage lender today and she said the new credit card balances are "typically posted between the 10th and 20th of the month".

Just for the record (in case anyone puts stock in this mortgage lender's quote), this isn't the case. They report at all times during the month, depending on the CC. Those who are signed up for daily pulls can, and do, see cc balances updated throughout the month. Typical cards (except HSBC) report on the statement date and then you see the CRA's update on their own schedule (EQ is currently my slowest updater --usually taking about a week).

We received a lot of misinformation from our previous mortgage lender. If we would have had accurate information, we would have been much better off. Mortgage lenders specialize in mortgages, not in FICO scoring. It's a rare bird, indeed, that knows a lot about both.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

laz98 — Sun, 07 Mar 2010 07:13:26 GMT

only 2 of our 14 credit cards report between the 10th & the 20th.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

RobertEG — Sun, 07 Mar 2010 08:25:25 GMT

Paradigm, you raise some good consumer beneficial points, but they are just not in alignment with fed intellectual property law.

Credit scoring is not regulated under federal law simply because to do so would be a violation of 200 years of established law.

It is because of intellectual property rights that can be based on trade secrets.

Should Coke be required to disclose their secret formula simply because it is unknown?

Should FICO be requried to disclose their trade secret algorithms simply because we dont have them?

Anyone who invents a new mouse trap or a new scoring algorithm has three options to consider.

One, they can do nothing to protect it, and thus become a total business fool when putiing it on the market, Anyone can immediately copy it, and become an equal competitor. Not many choose that stupid option.

Two, they can apply for and obtain a U.S. Patent on the technology. That gives them the right to exclude all others from making or using it for 20 years, but once that date has passed, it becomes public domain, with no extension of patent rights, and all business edge is gone.Their patent, 20 years ago, required a full and complete disclosure of how to make and use the invention.

Three, they can choose to keep it a trade secret. No patent application. If they dont file for a patent within a year, they loose all futther rights to secure patent protection . Kinda a big business gamble. So if anyone else is able to copy, or reverse engineer it without illegal insider information, the right is gone. That requires their strict and sometiimes brutal, but neessary, enforcement of employee contract obligations to maintain the trade secret for years. Legal and legit.. A big risk, with potential bigger gains.

Coca-Cola, as well as Fair Isaac, have built their business gamble on the maintenance of their legal trade secrets.

You will never see any Congresional legislation compelling them to divulge thier trade secrets without Congress first acting on total revision of all of U.S. intellectual proprerty law, as currently set forth in 35 U.S.C. 100, et seq.

Message Edited by RobertEG on 03-07-2010 12:13 AM

Message Edited by RobertEG on 03-07-2010 12:19 AM

Message Edited by RobertEG on 03-07-2010 12:25 AM

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Wed, 10 Mar 2010 16:49:31 GMT

Thanks for your help. What are "daily pulls", and how do I sign up for them? Must you pay for it?

I have a score of 698, just below the all-important threshold of 700. I've paid off 2 credit card balances in full over two weeks ago, which should raise the score to 720. I've been nervously waiting for the new balances to post, while constantly hearing about how mortgage rates are set to spike at the end of the month when the government guarantee expires. I just want to take some action and get it over with.

Funny thing is, I'd consider myself a much lower default risk now, with a score of 698, then I was two years ago, with a score of 725.

FICO does not take into account things like income, assets, job stability, and debt-to-income ratios. I understand that FICO can't, because they don't have access to this information (nor would I want them to). But the point is, lenders place so much emphasis on this score that it can create an unfair situation for consumers. And the fact that you can't even see your Experian score...that's just wrong.

Thanks in advance for your advice!

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

tbone74 — Wed, 10 Mar 2010 22:49:52 GMT

As mentioned above, different CCC's update at different times. As a matter of fact, I just called Barklay Bank to find out when they post...and the told me over the phone (each person is different, depending on when their account was activated).

I know this sounds simplistic..and no insult intended, however, have you tried asking them?

Message Edited by tbone74 on 03-10-2010 02:49 PM

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Lel — Wed, 10 Mar 2010 23:03:41 GMT

ParadigmShift wrote:

Thanks for your help. What are "daily pulls", and how do I sign up for them? Must you pay for it?
I have a score of 698, just below the all-important threshold of 700. I've paid off 2 credit card balances in full over two weeks ago, which should raise the score to 720. I've been nervously waiting for the new balances to post, while constantly hearing about how mortgage rates are set to spike at the end of the month when the government guarantee expires. I just want to take some action and get it over with.
Funny thing is, I'd consider myself a much lower default risk now, with a score of 698, then I was two years ago, with a score of 725.
FICO does not take into account things like income, assets, job stability, and debt-to-income ratios. I understand that FICO can't, because they don't have access to this information (nor would I want them to). But the point is, lenders place so much emphasis on this score that it can create an unfair situation for consumers. And the fact that you can't even see your Experian score...that's just wrong.
Thanks in advance for your advice!

You definitely have to pay for access to unlimited/daily pulls of your credit reports. I don't subscribe to any, but I believe Credit Check Total and Equifax Gold offer daily reports, for a fee. You don't get FICO scores with these services, however.

The FICO scoring algorithms don't take incorporate income or assets into their score because frankly, they don't have any significant predictive value to assess one's creditworthiness. Having a lot of money doesn't mean that someone is going to be able to manage debt properly. Look at Nicholas Cage, for example. His score is surely in the 400s with the foreclosures that he's gone through. I've got friends who earn 10 times as much as I do who are continually forgetting to pay their credit cards.

To be certain, creditors do look at the big picture when making decisions about whether to extend credit. They don't go solely on one's FICO score. They will take into account one's assets, income, and debt obligations when considering an application. If the FICO score were the be-all, end-all of credit decision-making, then Cap One wouldn't have rejected my recent CC application. The FICO score is just one metric of many that is used in these decisions.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Wed, 10 Mar 2010 23:12:48 GMT

No, actually I haven't tried calling the credit card companies. I try to avoid that 3-ring circus whenever possible.

If I hear... "We are experiencing a higher than normal call volume. Your call is important to us; we apologize for the unusual delay." ...one more time, I'm going to flip. And the chance that anyone would give actually give me a meaningful, definitive answer to this question probably hovers close to that of winning the lottery.

Thanks for the advice, but I just don't need the aggravation of attempting to speak with anyone at a credit card company (which is exactly what they want anyway).

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

haulingthescoreup — Wed, 10 Mar 2010 23:19:53 GMT

tbone74 wrote:

As mentioned above, different CCC's update at different times. As a matter of fact, I just called Barklay Bank to find out when they post...and the told me over the phone (each person is different, depending on when their account was activated)...

A convoluted way of saying that Barclays updates on your statement date, and your statement date depends on when you open/ activate your account!

eta: I should have said that you were fortunate to find a CSR who actually had the correct answer, albeit a bit tortured. I've had CSR's tell me everything: we update every Friday, we update once a quarter, we update when you pay us, on and on and on.

The way that we here on the forums have figured out who updates when is by enough of us who have had daily-pull credit monitoring comparing notes as to what we see on the reports. Back in the good old days, when TrueCredit updated all three with every pull, we could not only figure out which CCC updated when, but what the usual delay factor in updating was for each bureau.

Sure, it's entirely possible that individual lenders have changed, and there are smaller, local lenders who aren't represented here, but basically, CCC's update on your statement date (as in that night), except for US Bank, which updates on the last business day of each month, and HSBC/ Orchard bank cards, which report the balance on your account as of the last day of the month, but don't get around to sending in the info until a week or two or a month or so later.

Message Edited by haulingthescoreup on 03-10-2010 03:19 PM

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Wed, 10 Mar 2010 23:33:14 GMT

Thanks for the suggestions, Lel.

Although it doesn't seem like getting daily pulls would actually cause the new balances to be posted any faster.

(I'm relying on ScoreWatch to alert me as to when they post.)

It probably would make more sense to have the mortgage lender do a rapid rescore.

It just sucks because it's expensive...$35 per account per credit bureau.

So to have the balances on 2 cards updated, this would cost $35 x 2 x 3 = $210.

And, if I understand properly, I would need to pay this $210 to every mortgage lender I want to shop at...becoming prohibitively expensive.

Does anyone know if this is true? Or once you pay for the rapid rescore once, is that new score then available to anyone who subsequently pulls the reports? A one-time fee of $210 would be much easier to stomach if it would update the scores for all the lenders I'd like to consult with.

Appreciate everyone's replies!!!

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

haulingthescoreup — Thu, 11 Mar 2010 00:18:57 GMT

I'm not sure if I'm reading your question properly (sorry ), but what a rapid rescore does is get each lender (who you pay) to update the CRA's with your current balance.

Your credit reports from the CRA's is what lenders see, so if the new balance(s) are on your reports as a result of the rescore, then any lenders who pull your updated reports will see the new balances (+ any new info.)

Do realize that even though the lenders update, you will still have to wait for the CRA's to actually post the new numbers. Experian generally does it that very day/ evening, but EQ and TU generally take at least 5 days to update. In other words, they sit on the info, for reasons known only to them.

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

tbone74 — Thu, 11 Mar 2010 00:19:04 GMT

@haulingthescoreup wrote:
@tbone74 wrote:

As mentioned above, different CCC's update at different times. As a matter of fact, I just called Barklay Bank to find out when they post...and the told me over the phone (each person is different, depending on when their account was activated)...

A convoluted way of saying that Barclays updates on your statement date, and your statement date depends on when you open/ activate your account!

Agreed! LOL...

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

tbone74 — Thu, 11 Mar 2010 00:22:54 GMT

@Anonymous wrote:
No, actually I haven't tried calling the credit card companies. I try to avoid that 3-ring circus whenever possible.
If I hear... "We are experiencing a higher than normal call volume. Your call is important to us; we apologize for the unusual delay." ...one more time, I'm going to flip. And the chance that anyone would give actually give me a meaningful, definitive answer to this question probably hovers close to that of winning the lottery.
Thanks for the advice, but I just don't need the aggravation of attempting to speak with anyone at a credit card company (which is exactly what they want anyway).

Understood! However, if your CCC is listed, try using one of the backdoor numbers located in this thread: http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=136936

I was able to bypass the "3-ring circus" that way

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Thu, 11 Mar 2010 01:42:04 GMT

So, Paradigm, when are the statement dates for your two cards? (I take it that it's two of the original three cards you mentioned - Citi, BofA, CapOne)

Re: Exactly When Do CC Companies Report Balances to Credit Bureaus?

Anonymous — Sat, 13 Mar 2010 00:37:03 GMT

COF March 5

C March 12

BAC March 12

The Captial One update still has not reported to my Equifax as of 1 week later, or at least, that's what I assume since I didn't yet receive a ScoreWatch alert from MyFICO.

But it turns out, none of it matters anyway...and here I was, all stressed about my 697. I went to a mortgage lender and she pulled my credit (score 697) and showed me my options. Turns out, the FHA mortgage is a better option than conventional in every way.

Interest rate 4.75 FHA FOR ANY SCORE ABOVE 620. Compare this to 4.875 conventional, which is what I would have got ASSUMING I HAD A 720 with a rapid rescore. And it gets better. The MIP for the FHA loan is less...even accounting for amortizing the upfront MIP (1.75%) over 5 years and adding it to the standard monthly premium (0.045%).

WOW...it's no wonder the FHA is going broke. According to their standards, someone with a 620 gets a sweeter deal than any private lender, who carries the risk, can offer someone with a 720.

So basically, the way I see it is that the taxpayers are directly subsidizing my lower mortgage rate. (The government claims FHA is self-sufficient and does not rely on taxpayers funds, but it's only a matter of time before they'll need a bail-out too.) So, I might feel like a slimeball for taking other people's money, but realistically, I see this as an opportunity to recoup some of my tax money that has been lavishly wasted in so many other ways.

VOTE NO INCUMBENTS!!!