That's the point of the card, not to carry a balance, as the balance must be paid in full each month. If a balance is reported, then it "could" negatively effect the overall (aggregate) utilization against the amount of credit being used overall. Hope that makes sense. Others will chime in and probably explain in a better way. But then again this is my understanding of the card and its reporting.
In short, ideally that card should never report a balance. Just it's payment history.
example: (balance/limit)
card #1 - $200/$1,000
card #2 - $0/$1,000
card #3 - $0/$1,000
The above utilization is 6%
amex platinum - $3,000/npsl
Include Amex balance the utilzation is 106%
@credit8502020 wrote:Hi All! I know someone that has an AMEX Platinum card that has no limit. Since there is no limit how does the card balance impact the credit score? With cards that have limits, we know to keep it at a certain pencentage to improve the utlization and therefore the score. How is this done with the AMEX Platinum. I want to make sure they're not hurting their scores.
Thank you!
For most FICO scoring models, the Amex charge cards are not counted at all in percentage revolving utilization. They are merely counted in the computation of 'accounts with balance'.
In one of the old FICO scoring models, EX FICO 2, they do count in percentage utilization, with the largest "high balance" being treated as though it were a credit limit. So if you wanted to optimize your mortgage scores, you would make sure to report a balance in the runup to the application that is way less than your previous "high balance".
@SouthJamaica To clarify, so regardless of the balance; for scoring purposes it would only count towards an account with a balance?
@sznthescore wrote:@SouthJamaica To clarify, so regardless of the balance; for scoring purposes it would only count towards an account with a balance?
Yes. Except in EX FICO 2.
The card has to be paid in full, so "balance" really shouldn't be a word in conversation affiliated with the card. Lower balances in general would increase ones credit scores if less than 8.9% aggregate utilization. An example would be my scores below. Jan had 70% utilization, Feb had 7-8% utilization.
@credit8502020 wrote:
@SouthJamaica wrote:
@credit8502020 wrote:Hi All! I know someone that has an AMEX Platinum card that has no limit. Since there is no limit how does the card balance impact the credit score? With cards that have limits, we know to keep it at a certain pencentage to improve the utlization and therefore the score. How is this done with the AMEX Platinum. I want to make sure they're not hurting their scores.
Thank you!
For most FICO scoring models, the Amex charge cards are not counted at all in percentage revolving utilization. They are merely counted in the computation of 'accounts with balance'.
In one of the old FICO scoring models, EX FICO 2, they do count in percentage utilization, with the largest "high balance" being treated as though it were a credit limit. So if you wanted to optimize your mortgage scores, you would make sure to report a balance in the runup to the application that is way less than your previous "high balance".
@SouthJamaica @sznthescore Thank you for your feedback. So essentially a lower balance on that card will not result in a better credit score.
Except with EX FICO 2.
