HIghest Balance stat on Credit Reports

[Anonymous]

Wondering about that item on credit reports for each credit card that says, "Highest Balance"....

So for example, if I have a $1,000 CL, and I go out and buy something for say, $600, but I pay that charge in full BEFORE the statement clsoing date, it still gets reported by the creditor as "Highest Balance" ?  - Right ?  

It's not the statement balance, but the highest balance at anytime during the term of the account since the account opened ? - Right ?

So, even though you don't carry over a balance at all each much, and/or carryover a small amount and keep your utilization low, does the "highest balance" stat reflect a lot on how a creditor views you ?  

I mean, what if you buy something for $950, but you always pay it off before the statement closing date ?  Do creditors see you as someone might be risky because you use TEMPORARYLY use a higher percentage of your CL ?  Or, do they see you as someone who is a good spender, and responsible enough since you pay off your balance in full each time before statment closing, and/or keep the carryover/actuall ultilization low ?

Maybe a little bit of both ?

[Remedios]

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@Anonymous wrote:

Wondering about that item on credit reports for each credit card that says, "Highest Balance"....

So for example, if I have a $1,000 CL, and I go out and buy something for say, $600, but I pay that charge in full BEFORE the statement clsoing date, it still gets reported by the creditor as "Highest Balance" ?  - Right ?  

It's not the statement balance, but the highest balance at anytime during the term of the account since the account opened ? - Right ?

So, even though you don't carry over a balance at all each much, and/or carryover a small amount and keep your utilization low, does the "highest balance" stat reflect a lot on how a creditor views you ?  

I mean, what if you buy something for $950, but you always pay it off before the statement closing date ?  Do creditors see you as someone might be risky because you use TEMPORARYLY use a higher percentage of your CL ?  Or, do they see you as someone who is a good spender, and responsible enough since you pay off your balance in full each time before statment closing, and/or keep the carryover/actuall ultilization low ?

Maybe a little bit of both ?

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High balance is a good thing. It shows you used card and paid it down. Dont sweat that one, it's only reported utilization that plays a role in scoring.  

If you have high balance showing $950, but your statement is for a $100, it shows you paid $850. That makes you look responsible 

[FinStar]

The "Highest Balance" field is typically the highest balance ever reported on that tradeline in its entire cycle.

This figure would be incremental in that any previous (lower) value reported will be superceded by the next highest reported amount.

This type of captured metadata is used by a variety of companies. Not just lenders in general.

[Anonymous]

Most CC issuers render it as the highest balance that ever occured on the account, regardless of what is reported monthly in the "Balance" field.  Thus, in our OP's example, he'd have an HB of $950 and a credit limit of $1000, even though the Balance field on his report has always been < $80.

Some CC issuers render it as the highest statement balance that has ever occured.  If the OP had a CC issuer like that, he'd have a small HB in his example above.

We had a long discussion about this a year or two ago, which Brutal Body Shots will probably remember.  It's possible for an HB to be very close to the credit limit (HB = $950 and CL = $1000).  But more than that it is possible for the HB to exceed the CL (HB = $1636 and CL = $1000).  That happens most often when a CLD has occured for some reason.  CLDs are not in themselves considered by creditors evidence of risk -- a CLD is common for example when one is applying for a new card by the same issuer and you are moving a portion of one CL over to another.

I think the bottom line of that discussion was that:

       * Creditors never view a high HB as a bad thing.

       * Some creditors might view a higher HB as a good thing in some situations.  For example, if your HB on most or all of your cards is low, it implies that you are unlikely to be profitable for that issuer (low swipe fees and generated little or zero interest).  That could affect their interest in having you as a customer.

       * The HB field has no effect on your score.  (Exception: if you have an Amex charge card, the HB field is used in place of CL to determine utilization in the old Experian mortgage score.)

PS.  While there might be some advantage in having a moderately healthy HB, one should never allow that to induce a person to increase his CC spending by even a dime, just to pursure some phantom "advantage."

[Anonymous]

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@Remedios wrote:

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@Anonymous wrote:

Wondering about that item on credit reports for each credit card that says, "Highest Balance"....

So for example, if I have a $1,000 CL, and I go out and buy something for say, $600, but I pay that charge in full BEFORE the statement clsoing date, it still gets reported by the creditor as "Highest Balance" ?  - Right ?  

It's not the statement balance, but the highest balance at anytime during the term of the account since the account opened ? - Right ?

So, even though you don't carry over a balance at all each much, and/or carryover a small amount and keep your utilization low, does the "highest balance" stat reflect a lot on how a creditor views you ?  

I mean, what if you buy something for $950, but you always pay it off before the statement closing date ?  Do creditors see you as someone might be risky because you use TEMPORARYLY use a higher percentage of your CL ?  Or, do they see you as someone who is a good spender, and responsible enough since you pay off your balance in full each time before statment closing, and/or keep the carryover/actuall ultilization low ?

Maybe a little bit of both ?

---

High balance is a good thing. It shows you used card and paid it down. Dont sweat that one, it's only reported utilization that plays a role in scoring.  

If you have high balance showing $950, but your statement is for a $100, it shows you paid $850. That makes you look responsible 

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Great. Thanks for the knownledge.  I try not to push my CLs to the very top end, but it's good to know it's as you stated. Shows someone as good customer who can be responsible and pay down a high balance before statement closing, the that the HIGHEST BALANCE is a drag on one's credit profile.

[Anonymous]

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@FinStar wrote:
The "Highest Balance" field is typically the highest balance ever reported on that tradeline in its entire cycle.

This figure would be incremental in that any previous (lower) value reported will be superceded by the next highest reported amount.

This type of captured metadata is used by a variety of companies. Not just lenders in general.

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Thanks !  So, creditors doing a closer/manual look at your application for like say a mortatge might look at this stat in terms of your spending, but as long as you are paying it down each time, and not making late payments, it's all good ? Not a stat to worry about ?

[Anonymous]

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@Anonymous wrote:

Most CC issuers render it as the highest balance that ever occured on the account, regardless of what is reported monthly in the "Balance" field.  Thus, in our OP's example, he'd have an HB of $950 and a credit limit of $1000, even though the Balance field on his report has always been < $80.

Some CC issuers render it as the highest statement balance that has ever occured.  If the OP had a CC issuer like that, he'd have a small HB in his example above.

We had a long discussion about this a year or two ago, which Brutal Body Shots will probably remember.  It's possible for an HB to be very close to the credit limit (HB = $950 and CL = $1000).  But more than that it is possible for the HB to exceed the CL (HB = $1636 and CL = $1000).  That happens most often when a CLD has occured for some reason.  CLDs are not in themselves considered by creditors evidence of risk -- a CLD is common for example when one is applying for a new card by the same issuer and you are moving a portion of one CL over to another.

I think the bottom line of that discussion was that:

       * Creditors never view a high HB as a bad thing.

       * Some creditors might view a higher HB as a good thing in some situations.  For example, if your HB on most or all of your cards is low, it implies that you are unlikely to be profitable for that issuer (low swipe fees and generated little or zero interest).  That could affect their interest in having you as a customer.

       * The HB field has no effect on your score.  (Exception: if you have an Amex charge card, the HB field is used in place of CL to determine utilization in the old Experian mortgage score.)

PS.  While there might be some advantage in having a moderately healthy HB, one should never allow that to induce a person to increase his CC spending by even a dime, just to pursure some phantom "advantage."

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Excellent insight. Much appreciated..  I just got a lot of new cards, and I want to make sure I am using them in a manner that creditors will see as responsible. The HIGH BALANCE stat was always something of a mystery to me before though.  As stated early though, generally speaking I don't push the edges of my CL anyway, but on occasion I may need/want to buy things that temporary us 50+% on the CL. Especially if it's something like needing to do an hotel stay, and booking expensive flights, or buying an expensive laptop...etc.  So, I will keep my HIGH BALANCE at "reasonable" levels on most of the cards, but won't go nuts if a few of them have a HIGH BALANCE near top end.

[RobertEG]

The highest balance is reported under the Metro 2 format as field code 12, and is defined in the common credit reporting manual used by each of the big-3 CRAs as the "highest balance ever attained."

It is not limited to only the statement balance.

Thus, the answer is that the creditor should use their own records to determine and report the highest balance ever attained on the account, even if higher than the highest statement balance reported to a CRA.

[iv]

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@RobertEG wrote:

Thus, the answer is that the creditor should use their own records to determine and report the highest balance ever attained on the account, even if higher than the highest statement balance reported to a CRA.

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In practice, some issuers use a rolling window (of several years) for highest balance, rather than the tradeline lifetime highest balance.

[Anonymous]

The "highest balance" is used only for trending data or for a manual credit review. It is not factored into the fico score.

Hope this helps thanks