cancel
Showing results for 
Search instead for 
Did you mean: 

Is there any advantage (credit score) in letting a balance post and then paying it off?

tag
Horseshoez
Valued Contributor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@K-in-Boston wrote:

The only possible advantage would be that a few lenders rely on statement balance to determine eligibility for future credit line increases, but those are fairly rare.  For scoring, it really depends on how much of a percentage the balance makes up of the credit line of the individual card and your total revolving credit lines.  Depending on those factors, introducing a temporary balance of $15k could result in no change whatsoever to your scores or a temporary loss.  Stating they will "tank" your scores as a blanket statement is not true in many instances.  Letting it report and paying it off as a single factor will not increase your scores beyond the baseline you started with.  "High balance" is a credit reporting item, but not a scoring factor (outside of very old FICO models and charge cards).


Based upon some of the testing I've done I kinda-sorta need to disagree with the above.  In my case, my total for revolving debt reported each month is typically less than $100 against a total combined limit of about $40,000; over the last year there have been two months where a charge between $1,000 and $2,000 posted prior to the posting of the payment for said charge, and the statement was cut between those two posts.  Those charges amounted to less than 20% of the individual card's limit and obviously below 9% of my total limit, however, both times my scores dropped (for one month) an average of 10 points.  By saying scores would "tank" I guess I used the wrong word to describe the impact, but I stand by the rest of what I wrote.

I categorically refuse to do AZEO!
Message 11 of 30
Horseshoez
Valued Contributor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@Beefy1212 wrote:

I disagree with KiB there is a fairly strong anecdotal pool of data points having highest balance reported leads to higher new approvals.

While the card issuer may not depend on that information for limit increases new accounts tend to look at how much credit you have used for determining starting limits.

 


The flaw in this line of reasoning is the high balance is reported to the credit bureaus even if said balance has never been reported on a statement.  The credit report for each of my cards shows a high balance many times the largest balance ever reported on a statement.

I categorically refuse to do AZEO!
Message 12 of 30
Snoopy916
Valued Member

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?

well i have a little under $200k in available credit.  I have a mortgage that started 1/21 ($1800 2.625%), car loan now ($1200 @5.99%, was $435 at 1.9% traded in) and a pool loan ($900/month about 8 months in 120 month loan, forgot the APR). Gross about $11k/month. I pretty much carry a zero balance on all cards, and have been the past 3 years or so.  I run quite a bit of money through the cards (i'd say $10k a month), but never really let a balance post.  Credit score is 723 (was 608 after BK), because i did have a BK in 2018, but nothing bad besides maybe excessive inquiries since. 

Message 13 of 30
Snoopy916
Valued Member

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@Horseshoez wrote:

@Beefy1212 wrote:

I disagree with KiB there is a fairly strong anecdotal pool of data points having highest balance reported leads to higher new approvals.

While the card issuer may not depend on that information for limit increases new accounts tend to look at how much credit you have used for determining starting limits.

 


The flaw in this line of reasoning is the high balance is reported to the credit bureaus even if said balance has never been reported on a statement.  The credit report for each of my cards shows a high balance many times the largest balance ever reported on a statement.


i have been looking at my credit a lot the past few years, and don't witness this at all, which is why i was wondering if maybe I could do this to help bump my score.  Ive run $30k across a few cards multiple times and paid them off almnost immediately, and they never report anything , high balance or otherwise.  It looks like I never use my cards basically, when I use them daily, and for quite a bit.

Message 14 of 30
Horseshoez
Valued Contributor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@Snoopy916 wrote:

@Horseshoez wrote:

@Beefy1212 wrote:

I disagree with KiB there is a fairly strong anecdotal pool of data points having highest balance reported leads to higher new approvals.

While the card issuer may not depend on that information for limit increases new accounts tend to look at how much credit you have used for determining starting limits.

 


The flaw in this line of reasoning is the high balance is reported to the credit bureaus even if said balance has never been reported on a statement.  The credit report for each of my cards shows a high balance many times the largest balance ever reported on a statement.


i have been looking at my credit a lot the past few years, and don't witness this at all, which is why i was wondering if maybe I could do this to help bump my score.  Ive run $30k across a few cards multiple times and paid them off almnost immediately, and they never report anything , high balance or otherwise.  It looks like I never use my cards basically, when I use them daily, and for quite a bit.


Have you actually downloaded your reports from say, annualcreditreport.com?  I ask because that's where I see a notation for all of my highest balances.

I categorically refuse to do AZEO!
Message 15 of 30
Snoopy916
Valued Member

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@Horseshoez wrote:

@Snoopy916 wrote:

@Horseshoez wrote:

@Beefy1212 wrote:

I disagree with KiB there is a fairly strong anecdotal pool of data points having highest balance reported leads to higher new approvals.

While the card issuer may not depend on that information for limit increases new accounts tend to look at how much credit you have used for determining starting limits.

 


The flaw in this line of reasoning is the high balance is reported to the credit bureaus even if said balance has never been reported on a statement.  The credit report for each of my cards shows a high balance many times the largest balance ever reported on a statement.


i have been looking at my credit a lot the past few years, and don't witness this at all, which is why i was wondering if maybe I could do this to help bump my score.  Ive run $30k across a few cards multiple times and paid them off almnost immediately, and they never report anything , high balance or otherwise.  It looks like I never use my cards basically, when I use them daily, and for quite a bit.


Have you actually downloaded your reports from say, annualcreditreport.com?  I ask because that's where I see a notation for all of my highest balances.


yes, and from here I do the monthly reports or whatever I'm subscribed to.  Never shows high balances for any card.  I think $500 is the highest reported when I've easily ran cards up to their limits of $10k+ multiple times

 

I just looked, I have about 15 cards, only one that shows a high balance of anything noteworthy is my WF autograph card, and that one is only $996, I may even have let that post because of the way the statement date fell, I can't remember anymore.

Message 16 of 30
K-in-Boston
Credit Mentor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?

Only a few lenders report mid-statement balances as high balance if they are greater than the statement balance.

Message 17 of 30
Beefy1212
Established Contributor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@Horseshoez wrote:

@Beefy1212 wrote:

I disagree with KiB there is a fairly strong anecdotal pool of data points having highest balance reported leads to higher new approvals.

While the card issuer may not depend on that information for limit increases new accounts tend to look at how much credit you have used for determining starting limits.

 


The flaw in this line of reasoning is the high balance is reported to the credit bureaus even if said balance has never been reported on a statement.  The credit report for each of my cards shows a high balance many times the largest balance ever reported on a statement.


Yea I mentioned that in my pre-coffee ramble, discover for example only reports highest statement balance not true highest balance. 



Message 18 of 30
K-in-Boston
Credit Mentor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@K-in-Boston wrote:

"High balance" is a credit reporting item, but not a scoring factor (outside of very old FICO models and charge cards).


 


@Beefy1212 wrote:
I disagree with KiB there is a fairly strong anecdotal pool of data points having highest balance reported leads to higher new approvals.

I'm not sure what you are disagreeing with.  High Balance is a field on credit reports and not a scoring factor (again, excluding older models where it is used to calculate the "credit limit" of NPSL cards).

Message 19 of 30
Horseshoez
Valued Contributor

Re: Is there any advantage (credit score) in letting a balance post and then paying it off?


@K-in-Boston wrote:

Only a few lenders report mid-statement balances as high balance if they are greater than the statement balance.


Hmmm, well then I guess all of my financial institutions report high balance.

I categorically refuse to do AZEO!
Message 20 of 30
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.