Credit scoring and balances

[mpicasso]

History - score sitting around 720, trying to get it to at least 740, for mortgage refinance.  8-9 inquiries, 1/2 falling off next year.  2 late payments, May and October 2019, on a cosigned loan.

I use my CC's almost like a debit card...once a charge posts, I tend to pay it off, but gain the benefit of cashback.

This past month, I did a PayPal, 6 mos same as cash.  My score dropped 9 points because of it, guessing because it was more than 30% utilization of said account, even though it was less than 10% of overall.

Am I better to keep a balance of 10% or less, strictly for reporting purposes, and pay in full when due? Or just continue showing $0 balances?

Thanks in advance!

[FireMedic1]

Welcome @mpicasso 

Always have at least 1 card report a balance on statement date of <8%. Then pay in full. Never have all acccounts report $0 balance. You get a score ding cause FICO thinks your not using your credit. Your creditors know your using your cards from your swiping. Use your cards all you want. Just pay them all off before statement date except one. Or as we say AZEO.

[mpicasso]

How do I figure out the date when reports will be sent to credit bureaus?

[FireMedic1]

Usually its sent a few days after the statement date. Some are slower, some quicker.

[SouthJamaica]

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@mpicasso wrote:

How do I figure out the date when reports will be sent to credit bureaus?

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1.  If you're talking about the date the report is sent to the bureaus, you can only really tell by monitoring your reports daily. It varies widely among lenders. Some do it the next day, some do it several weeks later, some do it irregularly.

2. If you're talking about the date of the reported balance, it is usually  -- but not always -- the statement balance that is reported. There too you need to monitor your reports to know for sure; CSR's don't know the answer to that question. The majority of my accounts report the statement date, but there are exceptions. (Some report the balance from the last day of the month or the first day of the next month; I have one that reports on the 5th of the month, and another that reports irregularly during the week after the statement closes.  Also Chase reports a zero balance any time of the month when an account is paid down to zero).

3. Your safest bet for across-the-board score optimization, especially with your mortgage scores, is to have one bank card (not a Chase card) report a small balance, while the other revolving accounts report zero balances.

[HeavenOhio]

Welcome, @mpicasso.

The balance that's reported is usually the statement balance, and it's reported on or soon after the statement date. An example of an exception is US Bank, which reports on the last business day of the month. Taking a look at your current credit report should help you determine reporting dates. If you're still not sure, you can list your cards and we should be able to help you.

Because you're so close to a lower interest rate, you'll absolutely want to do AZEO (all zero except one), which means to leave a tiny balance on one card with the rest reporting zero. That tiny balance should be at least $5, but not much more. Reporting balances of all zeros can result in fairly significant dings, so don't go there.

[mpicasso]

I have Capital One Quiksilver and Savor; PenFed; Discover; PayPal credit; a Petco/Comenity card that is used only about every other month.

Trying to hit the 740 mark, so I can either refinance or buy a new place...yes, sooo close!!!

Thanks in advance for the help! Always thought just paying my balances off every month would bump my score, no matter how much I spent...wish they would teach FICO scoring in high school or college! 😁😁😁

[SouthJamaica]

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@mpicasso wrote:

I have Capital One Quiksilver and Savor; PenFed; Discover; PayPal credit; a Petco/Comenity card that is used only about every other month.

Trying to hit the 740 mark, so I can either refinance or buy a new place...yes, sooo close!!!

Thanks in advance for the help! Always thought just paying my balances off every month would bump my score, no matter how much I spent...wish they would teach FICO scoring in high school or college! 😁😁😁

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Capital One, PenFed, and Discover credit cards all report the statement balance.

I don't know about Comenity and PayPal. My understanding is that PayPal is Synchrony, and that Synchrony is unpredictable in its reporting dates. So as long as you have a Synchrony card, it may be hard to get to AZEO.

Capital One and Discover are suitable as your one balance-reporting card.

PenFed may or may not be; there are reports of credit unions being overlooked as balance-reporting cards.

[Phana24]

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@mpicasso wrote:

History - score sitting around 720, trying to get it to at least 740, for mortgage refinance.  8-9 inquiries, 1/2 falling off next year.  2 late payments, May and October 2019, on a cosigned loan.

I use my CC's almost like a debit card...once a charge posts, I tend to pay it off, but gain the benefit of cashback.

This past month, I did a PayPal, 6 mos same as cash.  My score dropped 9 points because of it, guessing because it was more than 30% utilization of said account, even though it was less than 10% of overall.

Am I better to keep a balance of 10% or less, strictly for reporting purposes, and pay in full when due? Or just continue showing $0 balances?

Thanks in advance!

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The PayPal gig definitely gave you a minor ding.  However, it will go away as soon as you pay it off.  You should pay all credit cards EXCEPT ONE before the due date.  You want your statement balance to be zero on every card except one one you've chosen to be your reporting card.  I have found that my FICO 8 & 9 are maximized when I have 4% or less(the $20-30 recco is good) on one card.  I usually hit the bill for any card the week before the due date.   As @SouthJamaica noted, Synch(your PayPal card) is potentially a problem.  I have found Synch will report ay ANY time during the cycle if I exceed 50% of my limit, so you might want to put that card away for a couple of months before you apply for that mortgage.  You may want to try asking for removal of those lates from 2019.  If your co-signor has more than two years of on-time payments, and can compose a sufficient sob story for the lates, you might get them removed.  Good luck.

[mpicasso]

PayPal is now below 20% and will be paid off Friday (split payments over 6 weeks, instead of 6 months).

Last late payment was November 2019 but they will do nothing more than take your info to request an investigation.  Considering my name is the primary, the only thing I can offer is that none of the payments have my name on the account used.  Payor is not helping much, either, as they have yet to call and offer explanation, from their point of view.

Realizing my Capital One bill cycles around the 25th.  Guessing it best to just keep $30-50 on there, for when it cycles, and pay before due date (or at least after it is reported), correct? 

I normally keep my balances at $0, which is probably not helping my score...