My experience with low utilization and paying off post closing date is I can make a swing of around 15ish points in my reporting wandering from 1-5 cards with balance on a FICO 8 and maybe a FICO 4 looking at my historical numbers. That's with my 700ish scores on the FICO 8 models.
I don't bother optimizing accounts unless I'm applying for anything (and that includes CC's for me) but especially for mortgage where I'm in the range where a swing of a few points downward costs me .125% on the loan... no thanks! I absolutely FICO strategized this time and as a result I posted my highest Beacon 5.0 ever... took me 3.5 years to get to a 700 but did it, and I was at a 693 with 3 balances reporting.
Really it doesn't matter in the grand scheme of things, I don't think lenders care how many cards have a balance on them, they look at aggregate balance trends instead... and if I were gold-plated (read, sufficiently north of 760 on any score I care about not to give a damn) I probably wouldn't even bother cleaning up for CC apps and maybe not even for auto loans. Mortgage I will always, always clean up for even if I have an 850 score on FICO 8 as FICO 04/98 is where it's at.
@youdontkillmoney wrote:I've noticed there are at least two schools of thought on the matter of FICO score maximization. Active management whereby one may purposely keep utilization at a certain percent and / or keep a balance on one card, etc. The other school of thought which I've subscribed to for the past 24 years and that is not track such metrics as utilization but use cards as I need them, pay them off as I can, usually in full each month, sometimes before statement cycle closes because I just want to wipe out that bill and not worry about it, open and close cards as I feel, and never, ever be late or miss a payment. This latter method has always landed me in the 780+ FICO since I started. Sure if I had to many inquiries my FICO may drop 10-20 points, but after a few months goes right back up to 780+ again. Basically I don't actively manage or worry about how so and so will affect my credit, and spend too much time fretting credit decisions so as long as I don't miss a payment or late. Currently I have 4 credit cards, Amex Platinum, Citi Prestige, Iberiabank and Simmons First; and 5 PLOCs.
How about you?
Something I missed on the first time around and a little OT, but why 5 PLOC's?
@youdontkillmoney wrote:
@Revelate wrote:
@youdontkillmoney wrote:I've noticed there are at least two schools of thought on the matter of FICO score maximization. Active management whereby one may purposely keep utilization at a certain percent and / or keep a balance on one card, etc. The other school of thought which I've subscribed to for the past 24 years and that is not track such metrics as utilization but use cards as I need them, pay them off as I can, usually in full each month, sometimes before statement cycle closes because I just want to wipe out that bill and not worry about it, open and close cards as I feel, and never, ever be late or miss a payment. This latter method has always landed me in the 780+ FICO since I started. Sure if I had to many inquiries my FICO may drop 10-20 points, but after a few months goes right back up to 780+ again. Basically I don't actively manage or worry about how so and so will affect my credit, and spend too much time fretting credit decisions so as long as I don't miss a payment or late. Currently I have 4 credit cards, Amex Platinum, Citi Prestige, Iberiabank and Simmons First; and 5 PLOCs.
How about you?
Something I missed on the first time around and a little OT, but why 5 PLOC's?
^^
At one point I had 23 CC and trimmed it down to 4 top shelf ones. I am not cancelling any PLOC since the 5 I have were hard won with submissions of W2's, etc.
OH my question was more along the lines of what are or were they used for?
I'm planning to pick up a PLOC but I see it more of a last step before emergency fund use... which doesn't really translate to needing more than call it 2 mortgage payments worth of limit on it; not seeing much rationale for 5 personally.
I'm in between. I pay attention to the Fico penalties (e.g., too many accounts with balances), but my limits are high enough that my utilization is never a problem fico-wise. So, for 5 cards, two report whatever balance is on them at the time (typically the cards that I use for daily spend, since pending transactions often screw with paying before statement dates).
Even though Transunion Vantage score 3.0 is not a real "FICO" and different model, it is one of the free ones I have access to for now, it will be interesting to see how my scores changes in the next few months when the credit reports only show my open card accounts (4 which is down from 22-23 CC) and 5 PLOCs, right now it shows the following and will update the board in a month or so when my current open tradelines reflect (currently 820 out of 850):
