I have an Amex Platinum with NPSL and a $15K POT (which I never use). I charge about $10K/month and PIF every month after the statement date. I know that the balance doesn't affect my utilization (which is usually under 2%), but it does affect my total debt (consisting of the statement balance, my auto lease balance, and a small revolving balance for AZEO purposes). My question is: Would my score improve if I kept my statement balance on the Amex Platinum to a low or zero amount? Or is that completely irrelevant to my score?
@NYC_Fella wrote:I have an Amex Platinum with NPSL and a $15K POT (which I never use). I charge about $10K/month and PIF every month after the statement date. I know that the balance doesn't affect my utilization (which is usually under 2%), but it does affect my total debt (consisting of the statement balance, my auto lease balance, and a small revolving balance for AZEO purposes). My question is: Would my score improve if I kept my statement balance on the Amex Platinum to a low or zero amount? Or is that completely irrelevant to my score?
It would have a noticeable effect on one or two of the mortgage scores, but not on any others, because one or two of the older scores do factor it into utilization, treating the previous "high" amount as the credit limit. It would also have a slight effect on some other scores because even though it's not factored into percentage utilization, it does count as an "account with balance", while a zero reported balance would not.
I'm not an expert on this. @Revelate is, though.
I'm no expert either, but I don't think it would have any effect. At least not on your FICO 8s.
@SouthJamaica wrote:
@NYC_Fella wrote:I have an Amex Platinum with NPSL and a $15K POT (which I never use). I charge about $10K/month and PIF every month after the statement date. I know that the balance doesn't affect my utilization (which is usually under 2%), but it does affect my total debt (consisting of the statement balance, my auto lease balance, and a small revolving balance for AZEO purposes). My question is: Would my score improve if I kept my statement balance on the Amex Platinum to a low or zero amount? Or is that completely irrelevant to my score?
It would have a noticeable effect on one or two of the mortgage scores, but not on any others, because one or two of the older scores do factor it into utilization, treating the previous "high" amount as the credit limit. It would also have a slight effect on some other scores because even though it's not factored into percentage utilization, it does count as an "account with balance", while a zero reported balance would not.
I'm not an expert on this. @Revelate is, though.
Amex charge cards count for utilization on EX FICO 2 (current balance / high balance) only. One score.
FICO excluded any tradeline with Term = 1 month in the 2004 release (EQ FICO 5, TU FICO 4) from the revolving utilization calculations other than number with balances, and to the best of my knowledge every score since then handles them the same way.
Thanks to all for the reponses. Unfortunately I phrased my question inartfully so I didn't get a complete answer. My bad.
My follow-up question is: Would it make a difference if my statement balance was, say, $100K instead of $10K? IOW, is the absolute amount of debt, even if not revolving, a factor at all?
And second follow-up question: If I start using POT (which at present I have no intention of doing), am I right in assuming that the POT balance would be reported as a revolving balance?
@NYC_Fella wrote:Thanks to all for the reponses. Unfortunately I phrased my question inartfully so I didn't get a complete answer. My bad.
My follow-up question is: Would it make a difference if my statement balance was, say, $100K instead of $10K? IOW, is the absolute amount of debt, even if not revolving, a factor at all?
And second follow-up question: If I start using POT (which at present I have no intention of doing), am I right in assuming that the POT balance would be reported as a revolving balance?
Same answer, only matters on EX FICO 2.
No I don't think the POT changes the tradeline reporting and unless it does, it still doesn't matter to any score besides the abovementioned one.
ETA: nearly everything in FICO algorithms are counted based on ratios so the amount specifically doesn't matter except in relation to the rest of your aggregate revolving credit lines. Presumably because income is not factored in.
Thank you.
@Revelate wrote:
@NYC_Fella wrote:Thanks to all for the reponses. Unfortunately I phrased my question inartfully so I didn't get a complete answer. My bad.
My follow-up question is: Would it make a difference if my statement balance was, say, $100K instead of $10K? IOW, is the absolute amount of debt, even if not revolving, a factor at all?
And second follow-up question: If I start using POT (which at present I have no intention of doing), am I right in assuming that the POT balance would be reported as a revolving balance?
Same answer, only matters on EX FICO 2.
No I don't think the POT changes the tradeline reporting and unless it does, it still doesn't matter to any score besides the abovementioned one.
ETA: nearly everything in FICO algorithms are counted based on ratios so the amount specifically doesn't matter except in relation to the rest of your aggregate revolving credit lines. Presumably because income is not factored in.
Yeah - we verified this during our mortgage app in 2020 - the only thing the platinum balance affected was Fico2
@NYC_Fella wrote:Thank you.
Keep in mind that while it may not really affect FICOs, raw dollar amount can still affect DTI and potential future credit apps.