Does Spend Affect FICO score and CLI decisions?

[credit2019]

I'm curious...everyone says that utilization is the key ingredient in FICO scores.  If that's the case though, is it possible to constantly increase the size of your available credit by simply getting and not spending anything on them?  Is spend a factor in your FICO score at all? You often see statements like "CREDIT CARD AMT IN HIGH CREDIT IS CREDIT LIMIT" on credit reports, which means that they effectively are not reporting your spend at all - just your credit limit and current balance, which would always be $0 if you don't use it.  Do some banks report high balance instead of credit limit? I would think that if they reported high balance, if you weren't using your card at all, that account would be of little value to your credit.  Also, if you barely use your credit cards, will individual issuers for your existing cards approve CLIs?

It seems silly that the path to building a massive credit portfolio would be to simply not use your credit cards.  I have to be missing something here.

[dynamicvb]

Hight utilization if reported does hurt your scores. The best is to keep the reported balance down below 8.9% for the best result. Fico does not care or even know how much you use your card, it just knows what the CC issuer reports. This normally happens a few days after the statement cut. 

AS far as CLI's that is lender specific, but most do not grant CLI's if you are not using your card. Why would they take any more risk if you are not making the money in swipe fees.  

You can use your cards and charge them up to the max as long as you don't let that high utilization report. Many people do this all the time when they have low limit cards.

[credit2019]

Ok, so my question was really whether or not you could essentially just get a bunch of cards and not spend on them at all, and keep getting new cards with higher limits since you have no utilization and a "perfect" payment history.  So the answer to that question then is yes? Since new banks won't know how much you used/didn't use the old cards, presumably they'd just see your perfect credit, and you could just go step by step up the ladder to higher credit limits.  

Is that understanding correct?

[dynamicvb]

Having more cards does not necessarily equate to perfect credit. The number of cards is irrelevant. 3 is the number most recommend around here so you can practice AZEO( all zero except one). This will give you a few points extra. That is where you let one card report a small balance < 8.9% and the rest report 0. In my opinion, more cards are just more to handle and that can cause you issues if you forgot to pay one on time.

I personally only want enough credit to meet my needs and don't see the need for a lot of cards. I just work on growing the CL of the ones I use. If you don't use a card every few months then a lot of creditors will just close the credit line for non-use.

It up to you, but make sure you have at least the minimum payment set up on an auto draft so you don't miss a payment.

[Anonymous]

Good advice from dynamic. When they say utilization (UTL) it means what reports as a balance when the statement cuts. Not using a card at all will just get it closed down if you don't use it once a quarter, usually. Using too much & not having it paid off by when the statement cuts (different from the payment due date) will ding you as well, but the good thing is that if you pay it off, the next time it reports your score can jump back up. FICO has no memory; it's a snapshot of your credit profile at a certain point in time. IMHO better to have a higher balance that you can easily pay off than run the risk of having accounts closed for non-use.

[Brooklyn2018]

+1@dynamic
+1@Scooter

@OP

You can build a good history of on time payments every month when you swipe and PIF and leaving a $0 bal. That’s great in terms of you and the CCC showing responsible use.
In terms of scoring though, you are likely leaving points on the table. That means, that FICO has nothing to take into consideration if $0 balances are being reported to the Bureaus.
As stated above by dynamic and Scooter, implementing the AZEO method is a practice that is used usually when one is preparing or getting ready to app for a card or loan of such. That “practice” or “implementation” if you will, is then giving FICO a means to calculate your usage of available credit. With no balance is reporting then no points can be awarded...hope that makes sense.
But, on the flip, you don’t HAVE to show a balance to build credit completely if you are rebuilding. You can use your card and pay it every month a The due date(or earlier if you’d like) and you’ll still build a good credit history.
The AZEO Method is used to help maximize FICO(as stated in posts above) scoring...also, in reality, unless you are getting ready for an app or loan you don’t HAVE to necessarily have a balance report. You can still build credit with just good on time payment history.
Again, for maximizing FICO scoring purposes, implementing AZEO will accomplish that.

....JMHO of course and as always YMMV.

😊


ETA: As long as you are using your cards your CCC’s will decide to CLI when scores and profile support it.

[credit2019]

So my question was basically whether or not other banks can tell from the data in your credit report what your monthly SPEND on the card is. No one has really answered this directly, but I am gathering the answer is that no, they cannot.

So it seems the solution for perfect credit then is to use all cards once per quarter to keep them open (maybe 1 transaction, a pack of gum for example), pay them all off except one, and leave a balance of maybe 3% of available credit on there. Basically, don’t really ever use you credit except for token purchases, and your limits will keep rising. Seems too simple.

[FireMedic1]

Yes. Look at your annual credit reports. Each month shows what was placed on the card and what the statement balance was. Remember that whoever pulls your credit can see this and a whole lot more. Ever had a financial guy let you see your report they got?

[Anonymous]

I’m not sure if my chime in will answer your question - but for me at the moment is getting the highest CLI’s (for the best util over a super high fico, I’m concentrating on CLI right now) possible on the cards I already have. I don’t max them out but I put ALL my expenses on them and then pay them all down in a massive payment during the month. For instance my Cap 1 SL was $500 and I kept maxing it out, paying off throughout the month etc, they kept increasing, then I’d put more and more and more and pay off pay off pay off. But in huge amounts. $2k here, $4k here, each time they gave me a CLI. And now that card is at $8150. I want my “spend” to report. I don’t practice the The AZEO method. For instance, tomorrow $13,000 will be paid out to cc’s. I have $42,500 CL if you do the math on UTIL. But I’ve let it roll for a month on purpose. And every single time when I do that I get a huge CLI. YMMV.