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Keeping CCs active thru occasional use; to PIF before due or not

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Anonymous
Not applicable

Keeping CCs active thru occasional use; to PIF before due or not

Sorry if this has been difinatively answered elsewhere on this forum, but I was not able to find any more than some nuggets here and there...

 

I have 6 credit cards with 2-3% total util, 1 car loan, 2 mortgages, 16yr oldest account and 10yr avg history (EX800, TU804).  I just joined the 800 club in March!!

 

I use one of the 6 CCs (a cashback card) for daily purchases and float the balance monthly ((at 8-9% util on that card, incurring no interest charge).  Several posts have mentioned better scores if you show use/balance on one card only, so I'm following that advice.

 

On the other 5 of the CCs I do my best to make quarterly small purchases, let them float a month (showing a balance on credit reports), and then payoff (incurring no interest charge).

 

Based on some posts in this forum I'm confused--one post I read mentioned that purchase/use activity on a CC is reported to the credit bureaus even if I PIF before the due date, but other posts recommend letting the balance show up with the bureaus and PIF on the due date.  If the former is true, then you can keep activity on the CCs without any small hits to your score, I think...unless the activity counts against you evenif the balance reported is 0.

 

Can some of the experts here help clarify this pls? THANKS!

 

 

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Keeping CCs active thru occasional use; to PIF before due or not

Everyone is different. Some show score increase or decrease when allowing a small Bal to report. I use most CC once every 4-6 months for a small Bal and let them report. I have never seen any change in scores BUT some have.
Message 2 of 6
marty56
Super Contributor

Re: Keeping CCs active thru occasional use; to PIF before due or not

Try letting it report and see what it does to your score.  if it lowers it you can always PIF before the statment date.  One of the many advantages in not revolving CC balances.
1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 3 of 6
Anonymous
Not applicable

Re: Keeping CCs active thru occasional use; to PIF before due or not

I've tried both ways and settled on carrying NO BALANCES.   I have eight cards and use each card once every four to six months for a small gas purchase, groceries or dining out - usually for no more than $60.00 or so.  When the charge hits the account in two or three days, I immediately make an online payment for the balance bringing the account back to zero.  One time I let a $24.00 charge roll over to my report and believe it or not my score dropped 16 points.  I $h!t you not, 16 points!  The reason:  “A balance increase on an account may lower your FICO® score...”  They weren't lying

After this experience I decided never to roll over a balance – I just pay it off.

 

Message 4 of 6
haulingthescoreup
Moderator Emerita

Re: Keeping CCs active thru occasional use; to PIF before due or not

Hi, welcome to the forums!

If that ever happens again, do realize that's a one-time score ding for an account waking up from reporting coma. It should have gone away the next month.

Nice feeling to own your credit, instead of your credit owning you, isn't it?

Anyway, to answer the OP, I PIF all mine except one before the statement date, and once that one shows up on the reports, I kill it off. I haven't paid any APR interest in several years. I prefer to have APR money paid to me!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 5 of 6
Lel
Moderator Emeritus

Re: Keeping CCs active thru occasional use; to PIF before due or not

In my opinion, with scores like yours I wouldn't worry too much about PIFing.  I tried doing that about a year ago, and I found it to be a headache - instead of letting the autopay feature do its thing on the actual statement due date, I had to keep track of the statement closing dates, figure out how much I owed, then make the payment.  Since I have several cards that I use, it was quite a hassle.

 

Back then, I was essentially doing the reverse of what you are doing now - I had several cards reporting balances, and I wanted to see what happened to my score if I had all of the them report zero balances.  My scores were/are similar to yours, and I saw perhaps a 10 point increase in score after all that PIFing.

 

Having said all that, I'm about to see what happens when lots of cards report - more than a year ago.  After having a CC with a $9500 credit line closed due to inactivity and a Home Depot CL cut by $10,001 (got that back, though), I've woken just about all my cards from slumber.  So, we'll see what the damage is.  If you don't want to let your all your cards report balances, don't worry, because I'm doing it for you! Smiley Very Happy

 

 

Message 6 of 6
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