Reporting a balance

[Anonymous]

OK, so hopefully my 3rd cc will be approved today to maximize my credit score by having a small balance report on one of the three. But I have a question about that. Right now, I am still rebuilding (though I have made a lot of progress). So I am thinking of charging a small amount to 2 of the 3 cards each month to keep them active and reporting, and the majority of my stuff on my new CFU card for the CB. I would pay all of these off monthly. 

The question is- there is no lasting impact on my score by letting these cards report a balance as long as I am not planning any apps right? So I could go ahead and let them all report a small balance each month, but make sure they are reporting 0 on 2 of 3 before I plan any apps and it will shoot right up? Or is there a reason to not do that that I am missing?

[Anonymous]

No, you're not missing anything.  You've got the right idea.

When you are preparing to apply for something major - a car, a mortgage, etc - then you need to maximize your score with manipulation of your utilization, the whole thing where you pay everyone off but one card, and report that card purposely under 10%...

If you are not actively preparing to apply for something major, though, you just keep on trucking and keep your overall utilization across the board as low as possible, under about 30%.  The game here is, the more you report and then pay off, the more potential for higher CLI; but the more you report overall, the more impact your utilization has (temporarily at least) on your score.  And of course, some folks let it go a little too far and don't pay balances in full, which causes interest expenses.

You only have to micromanage your utilization when you're preparing for a big application - otherwise, just maintaining less than about 30% and paying it off/way down each month on time will keep your accounts healthy and growing as the months go by.

[RonM21]

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@Anonymous wrote:

No, you're not missing anything.  You've got the right idea.

When you are preparing to apply for something major - a car, a mortgage, etc - then you need to maximize your score with manipulation of your utilization, the whole thing where you pay everyone off but one card, and report that card purposely under 10%...

If you are not actively preparing to apply for something major, though, you just keep on trucking and keep your overall utilization across the board as low as possible, under about 30%.  The game here is, the more you report and then pay off, the more potential for higher CLI; but the more you report overall, the more impact your utilization has (temporarily at least) on your score.  And of course, some folks let it go a little too far and don't pay balances in full, which causes interest expenses.

You only have to micromanage your utilization when you're preparing for a big application - otherwise, just maintaining less than about 30% and paying it off/way down each month on time will keep your accounts healthy and growing as the months go by.

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+1

Very well stated. It depends on what you are trying to get accomplished as far as how to handle it.

[Anonymous]

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@RM21 wrote:

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@Anonymous wrote:

No, you're not missing anything.  You've got the right idea.

When you are preparing to apply for something major - a car, a mortgage, etc - then you need to maximize your score with manipulation of your utilization, the whole thing where you pay everyone off but one card, and report that card purposely under 10%...

If you are not actively preparing to apply for something major, though, you just keep on trucking and keep your overall utilization across the board as low as possible, under about 30%.  The game here is, the more you report and then pay off, the more potential for higher CLI; but the more you report overall, the more impact your utilization has (temporarily at least) on your score.  And of course, some folks let it go a little too far and don't pay balances in full, which causes interest expenses.

You only have to micromanage your utilization when you're preparing for a big application - otherwise, just maintaining less than about 30% and paying it off/way down each month on time will keep your accounts healthy and growing as the months go by.

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+1

Very well stated. It depends on what you are trying to get accomplished as far as how to handle it.

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Agreed!