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I'm confused, as I seem to have read differing advice. Which is better: having a zero balance or having a small balance when your statement closes?
Zero balance is better some balance will send the score down normaly if you carry more then 16% on the individual card.
@Anonymous wrote:Zero balance is better some balance will send the score down normaly if you carry more then 16% on the individual card.
The standard advice is:
1 card reporting some balance (1-9% is commonly quoted)
All other cards 0 balance
SO that's might be why you saw what appears to be conflicting advice, both are true! 0 on all but one card, but a balance on the other (and PIF before the due date)
@bs6054 wrote:
@Anonymous wrote:Zero balance is better some balance will send the score down normaly if you carry more then 16% on the individual card.
The standard advice is:
1 card reporting some balance (1-9% is commonly quoted)
All other cards 0 balance
SO that's might be why you saw what appears to be conflicting advice, both are true! 0 on all but one card, but a balance on the other (and PIF before the due date)
+1
If you have only one card, keep a small balance on it. If you have more than one, keep a small balance on one and pay in full for the rest.
@bs6054 wrote:
@Anonymous wrote:Zero balance is better some balance will send the score down normaly if you carry more then 16% on the individual card.
The standard advice is:
1 card reporting some balance (1-9% is commonly quoted)
All other cards 0 balance
SO that's might be why you saw what appears to be conflicting advice, both are true! 0 on all but one card, but a balance on the other (and PIF before the due date)
Thanks! That's exactly why I was confused.
Second question: Why is it better to have 1 card with a small balance (and all other cards with a zero balance), than to have all cards with a zero balance?
@IEM wrote:
@bs6054 wrote:
@Anonymous wrote:Zero balance is better some balance will send the score down normaly if you carry more then 16% on the individual card.
The standard advice is:
1 card reporting some balance (1-9% is commonly quoted)
All other cards 0 balance
SO that's might be why you saw what appears to be conflicting advice, both are true! 0 on all but one card, but a balance on the other (and PIF before the due date)
Thanks! That's exactly why I was confused.
Second question: Why is it better to have 1 card with a small balance (and all other cards with a zero balance), than to have all cards with a zero balance?
Because the latter would suggest that you're not using credit, which is not what you want to demonstrate. Doing the former implies that you're using credit moderately, which is what creditors want to see.
@bs6054 wrote:
@Anonymous wrote:Zero balance is better some balance will send the score down normaly if you carry more then 16% on the individual card.
The standard advice is:
1 card reporting some balance (1-9% is commonly quoted)
All other cards 0 balance
SO that's might be why you saw what appears to be conflicting advice, both are true! 0 on all but one card, but a balance on the other (and PIF before the due date)
if you carry more then 16% on the individual card will sink the score faster then Titanic!!!!!
@IEM wrote:I'm confused, as I seem to have read differing advice. Which is better: having a zero balance or having a small balance when your statement closes?
Your post and your thread title are 2 different questions. You should always pay in full. However, it might be wise to let a small balance report to the credit agencies on one of your cards, as other people have said.
To do this, pay off almost all your cards in full before their respectove statement cutoff date. On that last card, you can let the balance report if you want (and if it's not that big) or you can pay part of it prior to the statement cutoff date so it reports a smaller balance. After that, pay it off in full before the payment due date.
@Commandolam wrote:
@IEM wrote:I'm confused, as I seem to have read differing advice. Which is better: having a zero balance or having a small balance when your statement closes?
Your post and your thread title are 2 different questions. You should always pay in full. However, it might be wise to let a small balance report to the credit agencies on one of your cards, as other people have said.
To do this, pay off almost all your cards in full before their respectove statement cutoff date. On that last card, you can let the balance report if you want (and if it's not that big) or you can pay part of it prior to the statement cutoff date so it reports a smaller balance. After that, pay it off in full before the payment due date.
Sorry about that - I take your comment to mean that I've been using "PIF" in a more general sense (as in, pay everything down) than its dictionary definition.
I tend to rack up big purchases during a billing cycle, and I always pay it off before the due date. However, I assume that if I were to let that (big) balance report, that would be a very bad thing for my credit score, even if as I said I pay it all off before the due date.