Does it hurt credit if CCs are maxed but making payments on it

[Anonymous]

Does this damage credit history in the long run? Lets say if i had my
Ccs high revolving balance on them? Or it doesnt matter my credit will be the same as in good or bad after i pay it off?

[rckstrscott]

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@Anonymous wrote:
Does this damage credit history in the long run? Lets say if i had my
Ccs high revolving balance on them? Or it doesnt matter my credit will be the same as in good or bad after i pay it off?

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Well; short answer is your credit score is a snapshot of current events. So if you have a high utilization, your FICO score will be lower. If you paid off all of that today, once the CC's report, your score will increase because your utilization is low.

FICO itself has no memory. If you are near maxed out, but you have no late payments, you will see your score go up as you pay it down. It really doesn't matter how fast you pay it down, because the score is based on a moment in time.

An example I would use: Lets say your car completely dies. You have a 10k credit limit and credit to spare. Your score is 700. You buy a car and max out that card. Your score might go to 600. If you came into money and paid off the 10k a couple months later, given all other information being the same, your credit score should return to 700.

-scott

[llecs]

Outside of FICO, lenders will often take adverse action like closing accounts, increasing interest, or cutting credit lines if the balances remain high for too long. That recently happened to us with a Home Depot CC for DW. Her balances (and mine) are too high and in one of their regular soft pulls, HD realized that and closed the account.

[RobertEG]

+1 to llec's post.

Creditor view of high balances with their perceived increased risk would be my primary consideration.

[marty56]

IMHO once the balances are PIF'd, FICO and lenders don't care if they once were maxed out.  LOL all my 4 year old+ CCs were maxed out at some point back in my credit dark days.

[frogfan12]

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@marty56 wrote:

IMHO once the balances are PIF'd, FICO and lenders don't care if they once were maxed out.  LOL all my 4 year old+ CCs were maxed out at some point back in my credit dark days.

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True statement. I once went over my limit on BOA (their fault...but that's a long story) and they have since granted me two CLIs. Once I paid them off, they were happy and didn't even remember it. 

[marty56]

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@frogfan12 wrote:

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@marty56 wrote:

IMHO once the balances are PIF'd, FICO and lenders don't care if they once were maxed out.  LOL all my 4 year old+ CCs were maxed out at some point back in my credit dark days.

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True statement. I once went over my limit on BOA (their fault...but that's a long story) and they have since granted me two CLIs. Once I paid them off, they were happy and didn't even remember it. 

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Short story, they just suck and I would never do business with them again.

[frogfan12]

Haha, I'm not a fan either. I'm just going to pay off this BT and be done with them.