High balance question

[Anonymous]

Nice qualification by SouthJ!  He's absolutely right.

If a person has a charge card, and if his "high balance" is not very high on it, then he might consider waiting for a month when his CC spending was gonna be high anyway, and then on that month put all his spending on his charge card.   This will boost up his "high balance" (HB).

On the other hand, note SouthJ's point that this only matters in extremely old models, which almost nobody but mortgage lenders now use (with a few exceptions).  Even then it's an easy fix: if you are buying a house and you have a charge card that has a balance close to the HB, then just pay the darn thing to zero.  Problem solved.

Question for Revelate or Thomas Thumb:

Do we know with certainty that it is only FICO 98 (Experian mortgage score) that uses HB as a proxy for credit limit?  I.e. are we certain that FICO 04 (TU and EQ mortgage scores) ignore charge card debt in the same way that FICO 8 does?

[Revelate]

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@Anonymous wrote:

Question for Revelate or Thomas Thumb:

Do we know with certainty that it is only FICO 98 (Experian mortgage score) that uses HB as a proxy for credit limit?  I.e. are we certain that FICO 04 (TU and EQ mortgage scores) ignore charge card debt in the same way that FICO 8 does?

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In this day and age that's only applicable to Amex Charge cards when talking FICO 98, and yes absolutely confident FICO 04 ignores charge card debt, namely those revolvers with a term equal to 1 month.  We saw some weirdness with FICO 8 and substantial Amex balances from cashnocredit on Equifax but I always did wonder if something was just weird in his tradeline reporting.

Historically speaking, when an explicit credit limit was not reported then High Balance was used as a proxy (so old school credit building the first thing you did was max out your card, let it report, and then pay it back but admittedly limits were generally much lower back then), but I think the last lender that didn't report a limit was BOFA around 2012-2013; since then high balance has been virtually irrelevant for FICO scoring.  Might matter for UW but really I wouldn't go out of my way to push up high balance if it meant paying non-trivial interest.

Actually I tried that once with a BOFA secured and things didn't turn out as well as I hoped, graduated suboptimally.