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Should I pay bal down before statement cuts?

Highlighted
Moderator

Re: Should I pay bal down before statement cuts?

Why?

Unless we're talking about maxed out cards with balances that barely budge, why is it better?
Lenders have ways of distinguishing between balance that's carried, and current balance. Plenty of lenders already provide and utilize trended data.
If one is not applying, why is it better?



Message 11 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

I would agree if one is not applying for anything. However this is in the context of applying for a CLI. The better the score, the better the chances, all other things equal, right?

I’ve read numerous threads saying for some lenders between 20 and 30% is the sweet spot for the CLI.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 12 of 28
Highlighted
Senior Contributor

Re: Should I pay bal down before statement cuts?

Ditto. Banks have that info, and can tell how much is being paid each statement cycle. So they're gonna know if you consistently PIF, or if you only did it recently. 

 

If a person feels better about paying it down before it cuts, fine. But i too see no benefit unless there's an app coming.






Message 13 of 28
Highlighted
Moderator

Re: Should I pay bal down before statement cuts?

Reading something somewhere is really not a way to go about it

Each lender I'd different. Some require little to almost no spend. Some expect you to sell your liver for CLI.
Others, like Barclay definitely have a sweet spot, they even listed 20% on their blog some years ago as ideal use.

The secret sauce for CLI is multifactorial, and driven by factors we may know about, but dont know how much weight is placed on them. Some things work for some, while not for others.
Why give up real money (from float) in exchange for imaginary money that may or may not happen?

Also, if people really needed those increases, they would ask for HP ones. And yet, those are anathema.
Message 14 of 28
Highlighted
Senior Contributor

Re: Should I pay bal down before statement cuts?

Well I think most people want SP CLI's because they like getting something for nothing, or they already have way too many HP's for the year!

 

If I really wanted the CLI, or larger than what I got via SP. Then I'd burn the HP. But then again I usually never have more that 8 in a 2 year period. Because I know that after so many in a short time the Lenders start wondering about you.

 

That said, I wonder about the wight HP's have that aren't followed by a new account? Say a person has 8 HP's in the last 3-6 months, yet they have 2 new accounts in the same time span?






Message 15 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

Well I’ve learned the best information that I know about Credit from reading threads in this forum. So many wonderful members full of wonderful information.

Definitely each lender is different, that’s why I said some lenders. I agree it varies.

I also agree that there’s no reason to give up a float unless you’re going to apply for something. But a CLI is an application.

Again I agree it is multifactorial. That’s why I said the higher the score, the higher the chances, all other things constant.

And right again, if someone really needs it they’ll burn the HP. But if I can get one for free I’ll take it! 😉

@Janus IMHO, I would think it would look worse if you had more hard pulls without resulting accounts, unless they were for installment loans like rate shopping. If I were a lender and saw you applied to 2 or 3 places and they failed to grant you credit, I would wonder if they saw something I did not see from another bureau.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 16 of 28
Highlighted
Moderator

Re: Should I pay bal down before statement cuts?

All I know is that if I NEED CLI, I'm asking, HP or not.
If I merely want one wait for SP.

Bottom line, it's not just float we give up. We will use cards with worse rewards structure when trying to buy their love. Sometimes playing these games benefits us. That's understood by everyone.

The struggle seems to start when we do not put our finances first, but instead try to decipher what lender wants. They want whatever they want, and UW standards are not permanent. They change and adapt, and here we are, trying to decipher how they may react.

In the end, everyone should do what they are comfortable with. If a person is not comfy with balances reporting, pay before statement.
To a lender paying too early doesnt scream "oh gosh, they have ability to repay" any louder than paying once they issue a bill (statement).
Another point worth considering, if algorithm is capable of recognition pattern in individuals, what happens when you stop paying ahead?

With so many variables, best thing to do is what's best for you.


Message 17 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

I agree if I need it, I will burn the HP if necessary; if I just want it, I’ll try the SP, you’re absolutely correct. Luckily I’m already in a sufficient position that I don’t “need” any.

But IMHO, bottom line is utilization affects scores. So if I lower my utilization prior to asking, I have a better chance. Not trying to impress a lender by saying I can repay early. Trying to maximize and optimize scores by lowering utilization. (of course I never go over 8.9% anyway so it doesn’t matter.)

As for recognition of patterns, that’s what trended data is going to bring to the table. We’ll just have to wait and see how that works.

Definitely agree that everyone must do what’s best for them.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 18 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

There is absolutely no negative impact to paying off your statement balance and then asking for a CLI so I still fail to see why there is the suggestion to micromanage the balance. It makes you stick out as an anomaly and most of us on this site are already anomalous enough. 

A CLI is not an application for new credit, it's a request to extend more credit to an account that already exists. The lender already has all the data they need to make that decision except possibly a fresh credit pull and your current income. Pay before the statement cuts, pay after it cuts, doesn't matter as long as you pay. It's just much more work to pay before it cuts. 




Message 19 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

Application or request is semantics, it’s still an application for an extension of existing credit.

I don’t advocate micromanaging just prettying up your file before you seek new credit or an extension of existing credit because a higher score is going to give you a better chance.

Micromanaging is stressful it’s definitely not something to be done all the time unless that’s just what someone wants to do.

I’m not talking about negative impact of paying off, I’m talking about positive impact of paying down on your score.

All other things constant, would one say you don’t have a better chance of a CLI with a higher score?
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 20 of 28
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