topic Re: Credit question in General Credit Topics

Credit question

Anonymous — Tue, 15 Dec 2015 05:32:37 GMT

Does letting 2 credit cards report a balance hurt your score ? Vs just one reporting a balance

Re: Credit question

Anonymous — Tue, 15 Dec 2015 05:43:08 GMT

Short answer: Yes. With one more than card showing a balance, that can cause a score drop (though not a big one).

Is the total number of cards you have two? Two cards out of two will involve a bigger hit than (say) two out of four.

The most important thing to bear in mind is that the hit is temporary. As soon your cards go back to only one reporting, the hit associated with having multiple cards showing a balance will vanish. So you do not need to try to make only one card report all the time. Just right before an important credit pull.

Re: Credit question

Anonymous — Tue, 15 Dec 2015 06:20:05 GMT

I got 12 cards all together i have $700 financed on my amazon for 12 months and I let my coqs1 report a balance

Re: Credit question

Anonymous — Tue, 15 Dec 2015 06:30:42 GMT

I can't imagine that it matters much whether 2 cards out of 12 report or 1. But getting the Amazon paid off sounds like a good goal.

Re: Credit question

RobertEG — Tue, 15 Dec 2015 08:03:20 GMT

It is the lowest weighted of the three primary factors under % util of overall % util, individ cards % util, and % cards with a balance.

I have only seen specific Fair Isaac statements that broadly state that you should keep % cards with a balance under approx half.

Two out of 12 would be great.

Re: Credit question

Gunnar419 — Tue, 15 Dec 2015 14:22:53 GMT

@RobertEG wrote:
It is the lowest weighted of the three primary factors under % util of overall % util, individ cards % util, and % cards with a balance.

I have only seen specific Fair Isaac statements that broadly state that you should keep % cards with a balance under approx half.
Two out of 12 would be great.

I agree. The MyFico purists, the people who like to fine tune their credit down to the width of a gnat's wing, will always tell you that only one should report, and that one should have between 1 and 9% util. That's for fine tuning, however. The couple of FICO points difference between 1 of 12 and 2 of 12 is nothing most of us would worry about.

Re: Credit question

Anonymous — Tue, 15 Dec 2015 14:27:29 GMT

Thanks for the responses

Re: Credit question

takeshi74 — Tue, 15 Dec 2015 14:54:03 GMT

There is an impact but the exact impact of having X balances out of Y is tricky to say in terms of number of points.

As just one anecdotal example, most of my 12 cards report balances and my FICO 8's are above 800. That said, YMMV depending on your credit profile. I'd +1 the opinion that 1 versus 2 balances out of 12 probably won't have a major impact.

You'll want to look elsewhere at factors with a bigger impact if you're looking to improve your scores.

Re: Credit question

Thomas_Thumb — Tue, 15 Dec 2015 15:14:48 GMT

The above responses are all good. As a general guideline consider the following:

1) Maintain aggregate utilization below 9%

2) Maintain individual card utilizations at under 30%.

3) Keep # cards reporting a balance at one or more but not over 33% (example 3 of 9 or 4 of 12)

Clearly, how the above factors are weighted is scorecard dependent. Some profiles can report balances on 100% of cards without negatively impacting Fico 8 score and/or allow a specific card to report 80% utilization with no impact as long as aggregate UT remains low (below 5% in one example). There really are no hard and fast rules but the guidelines should keep most profiles "near optimal".