topic Re: Revolving Credit in Understanding FICO® Scoring

Revolving Credit

Anonymous — Tue, 27 Nov 2012 00:18:58 GMT

I had a score of 550 when my CC balances were maintained high and I was making minimum payments, recently I have been paying off the cards or paying down one of the cards on a frequent basis. Today my score dropped bc, my balance on one CC increased by 3592. Trouble is that I pay this off monthly. When they report the balances to the credit companies, do they include payment history, or do they simply give a balance on that day that it was high? Its frustrating, because I have worked diligently to pay this down and it seems that the one day they report on this card, my balance is high, therefore giving the impression that I have not been paying on it, when in fact I have been. Any info on this? any way to fix it?

Re: Revolving Credit

Shogun — Tue, 27 Nov 2012 05:33:01 GMT

When you pull your CR, or a creditor pulls your CR, it's a snapshot of what it is at that particular time. Paying that util down so when they report will raise your scores back up. What else is holding your score down? Any baddies?

Re: Revolving Credit

bettercreditguy1 — Tue, 27 Nov 2012 10:06:58 GMT

A high balance reporting can be good or bad. Good bc it shows you are using lots of credit but bad for utilization if you would be applying for new credit ,ie a car or mortage. High reported balance also can help (if you pay in full every month) when applying for a cli with a lender. They track those numbers internally and are more apt to increase your limit if you are using it responsibly.

Re: Revolving Credit

RobertEG — Tue, 27 Nov 2012 17:59:54 GMT

I think it is pretty well established that, with respect to current % util, FICO scores only the (current month balance/credit limit) percentage.

So, in that regard, the actual account balance is not scored. However, % util is but a part of scoring of util of credit.

The fact that actual balances are not scored directly in % util does not necessarily mean that the scoring algorithm does not look at the balance on each account, and overall revolving balance. That, at least in my opinion, would be a logical indication of consumer risk, beyond simple % util.

Since the intricacies of the scoring algoritm are proprietary, one can only opine on whether and to what extent that is done.

What is also a fact is that reporting codes do record monthly balances on each account, which are maintained over a balance history of approx 24 months.

Expanded credit reports will show you that history.

The data for inclusion of prior balance levels is available in consumer credit files. The extent to which FICO might use that data remains, at least to me, a secret within their scoring algorithm.

Baddies

Anonymous — Wed, 28 Nov 2012 20:03:05 GMT

Yeah I have some late and missed payments in the past 3 years, but none in the past 12 months, I had my score up to 615 before falling 15 points to 600 with this high balance on my card. Crappy part of the whole situation, is when they posted this, I had made the payment on that card dropping the balance by 1500 dollars. Had I got it in sooner, it would have not hurt my score that way.

Re: Baddies

GregB — Wed, 28 Nov 2012 22:00:23 GMT

Virtually all CC report the statement balance to the CRAs. A few report on a certain day like the last day of the month. Some will report an additional time during the month for a change such as changing your credit limit, address change, or some other changes.

Was the balance reported something other than the last statement balance? If so, what was the company?

Most CC report the past monthly balances and about half of mine also report the amount of the actual payment so any potential lenders can see if you are carrying a balance. Your score however, is based on the reported balance.