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High balance question

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Regular Contributor

High balance question

I noticed on my credit report it lists highest balance achieved for each account, Is there a scoring difference placed on that?  Does it matter if you never charge anything on a card or very minimal? 



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Community Leader
Super Contributor

Re: High balance question

The highest balance achieved is a good thing as long as it doesn’t exceed one’s CL. Creditors get to see you can handle large spend amounts.

If you never charge anything or charge a minimal amount, there is no reason for a creditor to keep your credit card open. They want people who are going to use their cards.


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Message 2 of 12
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Regular Contributor

Re: High balance question

So it looks like i've been going about it wrong. Thanks for your input!



Message 3 of 12
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Community Leader
Senior Contributor

Re: High balance question

Note that how you achieve your highest balance depends on the bank. Some report the highest statement balance. That means that if you want to bump that number, you may have to take a scoring hit for higher than usual utilization for a month. Others use the highest balance ever, which could be either a mid-cycle or statement balance.

 

Capital One and Chase are among the banks that report the highest balance ever. AMEX reports the highest statement balance.

Message 4 of 12
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Regular Contributor

Re: High balance question

I don't want to be dinged on that but I also don't want to rack up a bunch of debt that I might not be able to pay down in a timely manner. 

 

I was looking at this because some of my tradelines exceed $10-$15k and have only seen maybe $2-$300 spending or "highest balance ever"



Message 5 of 12
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Super Contributor

Re: High balance question

The high balance field has absolutely no impact on your score at all, so you can't be dinged for it being either high or low relative to your limit.

Message 6 of 12
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Super Contributor

Re: High balance question


@CreditInspired wrote:
The highest balance achieved is a good thing as long as it doesn’t exceed one’s CL. Creditors get to see you can handle large spend amounts.


Having a high "high balance" is fine, so long as your high balance isn't your current balance.  If it's your current balance, that suggests high [current] utilization, which can not only impact score of course, but definitely isn't a favorable look.

 

A high "high balance" is a great thing so long as your current balance is low, as that means by definition you were once at that "high" balance but have since paid it off, thus showing responsible revolving use.  I disagree that having a "high balance" in excess of your CL is a bad thing, again, so long as your current balance is low.  I could have a high balance of $8000 on a $10,000 CL, then self-initiate a CLD to (say) $4000 (or move limits, whatever) on that card.  So long as my current balance is low, it doesn't matter at all that I now have a high balance of $8000 on a $4000 CL trade line.

Message 7 of 12
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Established Contributor

Re: High balance question

@Rogue46  I agree with the first reply and also want to add it won't help with a CLI either if they feel you do not need or use that much they could possibly lower your limit too Smiley Happy     I usually use as much as I can as long as I pay it off when payment is due and put very little before the statement that way it shows you can use that high amount and responsibly Smiley Happy
















Message 8 of 12
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Moderator Emeritus

Re: High balance question

To refine BBS's comment a little, doesn't really matter if current balance is equal to high balance: banks look at more than one month snapshots when we're talking account reviews.

 

If your current balance and high balance are hanging out, that's a different animal.  That said not all tradelines are created equally for that either, ultimately banks are more liable to look at can you pay off that balance because things might be sitting on a 0% or low APR tradeline (hi muh HELOC) but if the income supports the payoff, things aren't bad yet.

 

Really banks look at escalating patterns of debt, maxxing out multiple accounts for example, that's where it starts being less of what I described above and more of not meeting ends meet or otherwise being unwise with credit.

 

I wouldn't worry about it frankly, but I generally don't pay before my statement cuts on any account and as such I have a reasonable high balance on most of my tradelines, but I also have a $0/$25000 sitting out there too.  Not sure it matters all that much, just use your cards appropriately you'll be fine.

 

 




        
Message 9 of 12
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Super Contributor

Re: High balance question


@Rogue46 wrote:

I noticed on my credit report it lists highest balance achieved for each account, Is there a scoring difference placed on that?  Does it matter if you never charge anything on a card or very minimal? 


It does count for Amex charge cards in some of the older scoring models, which treat the highest reported balance as though it were a credit limit for utilization purposes.


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