Future Apps Question

[Jarnog]

I do not know if this has been asked or talked about, as I searched and could not find definitive answers, thus the post.

How much do CC companies take into account utilization.  Now what I mean is like the utilization throughout the life of a person's account.  DW and I have recently gotten our balances down on our cards.  Since this is mainly for her (as she wants to spree soon), I will give her info.  She was around 60% utilization, just due to bills and the holidays.  Well, after NFCU reports this month she will be at approximately 15-18%. 

She tried for an increase on her IT card and it was declined and one of the reasons was something to the effect of length of time cards reported a high balance (not exact, but something like that).

It got me and her to thinking that her chances to have a successful spree may be hindered if that is a factor.  It is true that a substantial balance has been carried on some cards, and there is one that currently has about a 90% utilization (Amex BT AU), but again we recently got everything but that Amex down to manageable levels.  Will CC companies give that same reason or use that same reason, so to speak, as Discover to not give her any spree love?

Her current scores are FICO - EQ 616, TU 640, EX 615 and I expect should go up when an error collection that is reported is removed for her and that util drops. 

Don't really need advice about the spree or anything like that, just wondering about how carrying high balances for months then effectively paying it in one fell swoop "looks".

I hope I made sense and appreciate any insight.

[dobirdsmommy]

---

@Jarnog wrote:

I do not know if this has been asked or talked about, as I searched and could not find definitive answers, thus the post.

How much do CC companies take into account utilization.  Now what I mean is like the utilization throughout the life of a person's account.  DW and I have recently gotten our balances down on our cards.  Since this is mainly for her (as she wants to spree soon), I will give her info.  She was around 60% utilization, just due to bills and the holidays.  Well, after NFCU reports this month she will be at approximately 15-18%. 

She tried for an increase on her IT card and it was declined and one of the reasons was something to the effect of length of time cards reported a high balance (not exact, but something like that).

It got me and her to thinking that her chances to have a successful spree may be hindered if that is a factor.  It is true that a substantial balance has been carried on some cards, and there is one that currently has about a 90% utilization (Amex BT AU), but again we recently got everything but that Amex down to manageable levels.  Will CC companies give that same reason or use that same reason, so to speak, as Discover to not give her any spree love?

Her current scores are FICO - EQ 616, TU 640, EX 615 and I expect should go up when an error collection that is reported is removed for her and that util drops. 

Don't really need advice about the spree or anything like that, just wondering about how carrying high balances for months then effectively paying it in one fell swoop "looks".

I hope I made sense and appreciate any insight.

---

YMMV but I do believe UTL is a big factor.  If you are using a good amount of your available credit; it might make you look desperate to get more credit.

[Anonymous]

@Jarnog,

Carrying a balance for a long time and then paying it off does not affect how your report or score looks as FICO or any other scoring model has no memory.  One thing to keep in mind is utilization plays a huge factor in your credit profile and carrying a balance at 90% of any card limit is a big NO..NO and a red flag to lenders.  If you don't plan on buying anything and don't care about your scores then you can keep doing that.  But if you plan on having a healthy credit portfolio then I urge you to not do that.

[Jarnog]

---

@Anonymous wrote:

@Jarnog,

Carrying a balance for a long time and then paying it off does not affect how your report or score looks as FICO or any other scoring model has no memory.  One thing to keep in mind is utilization plays a huge factor in your credit profile and carrying a balance at 90% of any card limit is a big NO..NO and a red flag to lenders.  If you don't plan on buying anything and don't care about your scores then you can keep doing that.  But if you plan on having a healthy credit portfolio then I urge you to not do that.

---

We  have had balances and carried balances due to 0% or very minimal % offers and transfers.  And that one card is my mother's Amex that she let my wife and I become an ACM on.  It carries a balance because we transferred some balances and my mother did also.  We still have through Dec or so of this year at 0%. 

I assume that a computer would just look at the "instant" snapshot of the report and say "oh her util is XX %, her score is XXX, we can/cannot give her a card".  But if there were to be a recon needed an analyst could see that balances were carried for months and then all of the sudden BOOM down to 1% or 0%.  So would that hurt? Meaning them looking at it and seeing that for X amount of months a balance was carried, even though we paid substantially over the minimum, there was still a balance carried over.  Also, I realize this could all depend on the analyst...looking for more in general...at least what you guys and gals have experienced or know of

Again, I am sorry for the length and questions, I hope I am making sense.

[Anonymous]

@Jarnog,

This-But if there were to be a recon needed an analyst could see that balances were carried for months and then all of the sudden BOOM down to 1% or 0%. So would that hurt? Meaning them looking at it and seeing that for X amount of months a balance was carried, even though we paid substantially over the minimum, there was still a balance carried over. No, that will not hurt.  Remember, these analysts are red blooded (humans) and do take a sensible explaination into consideration when manually reviewing apps.  That being said, as long as you reduce utilization before applying you should be fine as long as the other factors that play an immerse role such as income, overall credit portfolio etc.  you should be golden.