topic Re: Paid Balance in Full in Understanding FICO® Scoring

Paid Balance in Full

Anonymous — Mon, 16 Jan 2012 02:26:26 GMT

I just paid my Capital One card balance in full. It shows a zero balance and no mininum payment. My question is. Is it a good thing to pay the whole balance off every month. Will that hurt my FICO Score

Re: Paid Balance in Full

Anonymous — Mon, 16 Jan 2012 02:31:44 GMT

@Anonymous wrote:
I just paid my Capital One card balance in full. It shows a zero balance and no mininum payment. My question is. Is it a good thing to pay the whole balance off every month. Will that hurt my FICO Score

If you are concerned about your FICO score, it is better actually to have a small balance showing on your statement (1-5% is perfect no more) andt hen immediately pay that off after the card reports to the CRAs. That's going to give you a better score believe it or not than a 0 balance. Apparently it demonstrates you are "using" credit in a way the score creators feel is "responsible" that way though in this case you are just really gaming the system to boost your score.

But since you asked, that's how to do it, if you want max FICO.

Re: Paid Balance in Full

RobertEG — Mon, 16 Jan 2012 03:36:10 GMT

Other factors also come into play.

If that is your only revolving account, leaving a reported balance each month will always result in 100% of cards showing a reported balance. Since FICO also scores percent of revolving with a balance, the loss there might offset whatever FICO does nor does not reward for showing some balance. Obvioulsy, as the number of revolving accounts increases, the impact of one card decreases, so that the general mantra to have one report makes sense due to the reduced inpact that has on the percent of cards with balances.