topic Re: My credit card balances. in General Credit Topics

My credit card balances.

Anonymous — Sat, 11 Jul 2015 03:04:07 GMT

So OK I pay my AMEX off each month. For some reason after last month payment Exuifax and Transunion lower my score by 18 points due to the balance on my credit cards DECREASING! Really? Then this month my Visa balance goes from zero to $237.00. And guess what? You guessed it....my score goes UP by 18 points. No one can explain this. HELP! I am afraid to pay my bills on time! My scores are 745. 750. 726.

Re: My credit card balances.

Anonymous — Sat, 11 Jul 2015 03:39:56 GMT

Above all do not be afraid of paying your bills on time. That is the ONE thing that you must always do, whether they are credit cards or installment loans or whatever. One late payment on one card stays on your record for 7 years.

My guess is that you had a month where both cards both reported a zero balance, because you were "paying them off" by which I assume you mean paying the entire balance down to $0. FICO has a slight prejudice against you having no credit card balance at all. But you don't need to pay the cards down to zero. Just pay the amount you owe on the statement. If you pay the full amount, that's known as paying in full or PIF which is a fine habit to get into. If you use either card even a little in the following month, at least one card will report a positive balance to the CRAs and FICO will like that.

Re: My credit card balances.

takeshi74 — Sun, 12 Jul 2015 15:35:30 GMT

@Anonymous wrote:
So OK I pay my AMEX off each month. For some reason after last month payment Exuifax and Transunion lower my score by 18 points due to the balance on my credit cards DECREASING! Really? Then this month my Visa balance goes from zero to $237.00. And guess what? You guessed it....my score goes UP by 18 points. No one can explain this. HELP! I am afraid to pay my bills on time! My scores are 745. 750. 726.

You definitely need to pay your bills on time as Payment History is the biggest factor:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

but you also need to keep in mind that paying by the due date but after the report date means that blaances are reporting and your balances can fluctuate and impact scores. Additionally, it's not just your balances that impact scores but other factors as well. In order to understand why a score changed you would have to carefully review reports from before and after the change. We can't tell you what caused the changes without full details. However, you are assuming causality without a full understanding of the various changes that affected your scores.

Additionally, I don't recommend worrying over scoring changes of 20 points or less. I'd suggest setting a higher threshold or, better yet, focusing on the data in your reports. If you fixate on the numbers without a proper understand you'll just drive yourself crazy.

Re: My credit card balances.

Anonymous — Mon, 13 Jul 2015 01:43:11 GMT

Thanks guys! Credit guy. Thanks so much. I think I get it. But as we all know, Amex requires full payment each month. I do get the visa thing though. If I were a company, things would be considered differently. I think the credit scoring system is a confusing mess. I also liked the advice to "not drive myself crazy over 20 points". However, I worked my tail off to get these scores up. And sometimes it all just doesn't make sense. But, really guys....thanks for the responses.

Re: My credit card balances.

Anonymous — Mon, 13 Jul 2015 01:44:37 GMT

Got it takeshi. Thanks!

Re: My credit card balances.

Anonymous — Mon, 13 Jul 2015 02:36:49 GMT

@Anonymous wrote:
Thanks guys! Credit guy. Thanks so much. I think I get it. But as we all know, Amex requires full payment each month. I do get the visa thing though. If I were a company, things would be considered differently. I think the credit scoring system is a confusing mess. I also liked the advice to "not drive myself crazy over 20 points". However, I worked my tail off to get these scores up. And sometimes it all just doesn't make sense. But, really guys....thanks for the responses.

Oh? (see green above). I carried a large balance on an AMEX Costco card for 10 years before I paid it and closed it.