@NRB525 wrote:
@Aahz wrote:
@NRB525 wrote:
@OmarGB9 wrote:
^May I ask why you're going around asking everyone for an *exact* amount of points somebody's scores would take for high UTIL? Because honestly nobody can know the exact amount of points one's file would lose.Good question. How many points is "a hit" ? 4? 10? 100? It's a loaded word that can be interpreted many different ways, when the reality of the impact of crossing 10% or 50% on a card is not a huge amount of points.
If we are giving information out to others, especially to those asking a question because they don't know the frame of reference, have not experienced it, it is important that information should be useful, not vague. And not scary either, because that is inappropriate. And the most common reply is to use scare words, not facts.
NRB - do you have another word in mind?
Since you know that no one can give an actual number, are you recommending that we all just ignore questions such as this because we can't supply exact numbers as "facts"?
The fact is increased utility is going to cause FICOs to decline - aka "take a hit" - 90%+ of the time.
And the fact is that no one can provide a specific answer - it will always be vague - just like the "not a huge amount" response you gave is vague and not a fact.
Of course I do not recommend ignoring the question. Although, if you go back and read OP's original question, it was related to how the specific bank where the balance is being carried, where interest was being paid, would view the cardholder. Generally, the bank would be very happy with this customer because they are paying interest, as long as they continue to pay. There is first a tendency among respondents to gravitate back to the basics they want to write about: Don't carry a balance because the utilization will hurt your score. This is applied in many reponses where the trigger word Utilization turned up even in the shadow of the original question
Second, there are real reasons someone might want to carry a balance. There could be a 0% purchase APR, and a large expense is coming up such as dental work or new tires, costs I've paid recently on such cards. In that case, it's good inexpensive financing, and in some cases, earned rewards for using specific cards like the AK Airlines or EDP that I have on 0% APR. In other cases, low or 0% APR BT offers are available, saving interest cost with low cost financing.
But the general intent of many, not all but many, is to react as if carrying a balance is a very bad thing. With the need to justify the thinking, "the hit to the FICO score" becomes a common, generalized reply with no reference points.
To get to your question, the better response would be: "Carrying a balance should be done if it benefits you financially, or you decide you have to do it, but you should be aware you can lose some FICO points when your utilization goes up. It may be a few points, it may be more, but those points will come back once you pay down the utilization, and realize the benefits of what hopefully is low cost financing." That is what I hope comes across as a Balanced Answer, not a Judging Answer.
Credit is there for a purpose: To allow people to borrow now to buy things that they need (or want) on their promise to pay it back in the future. Getting a good credit file allows you to borrow. There's not many other reasons to strive for a really high FICO score other than borrowing, since your score is not exactly public knowledge, and FICO doesn't send you a bonus check when you get to 700 or 800.
Cheers!
The reason for its existence is to make money for banks. Carrying balances enhances banks making money, but it's also the way many people fall into a death spiral from which they never recover. The reason banks have zero percent promotions is that (a) they often get big fees despite the lack of interest, and (b) statistics show that people who carry those promotional balances often wind up being profitable interest-payers lately.
So I think one should never carry a balance unless there's no way to avoid it.
@SouthJamaica wrote:
The reason for its existence is to make money for banks. Carrying balances enhances banks making money, but it's also the way many people fall into a death spiral from which they never recover. The reason banks have zero percent promotions is that (a) they often get big fees despite the lack of interest, and (b) statistics show that people who carry those promotional balances often wind up being profitable interest-payers lately.
So I think one should never carry a balance unless there's no way to avoid it.
That's a perfectly fine outlook. Sometimes there are costs that one cannot manage to pay in full, however, so there are times it is unavoidable. And, though some people get in difficulties with their debt, the "death spiral" is... 
Need I say more?
