How Many Accounts Should I Let Report a Balance?

[andyaycw]

For maximum FICO points, I understand that utilization must be kept between 1-9%.

Likewise, I am wondering how many accounts should report a balance for maximum FICO points.

A month ago, I had only a student loan and two revolving (credit card) accounts on my credit report, and I always let the balances on both credit cards report at least a $1 balance. Purchasing my score reports from this website, I saw something that for FICO High Achievers, the average number of credit accounts with a balance was three (3). It said I had three accounts with a balance.

I have more revolving accounts now, and am wondering how many I should keep a balance on in order to get max FICO points. Do installment loans count as an account with a balance, because myFICO.com seems to count it as one.

[Anonymous]

Well andy, if you follow the Mods advice here, and it seems to be a generally accepted axiom, leave only 1%-9% of your credit limit of each card, ON each card. I've heard this so many times in reading all the posts, that I dream of 1-9. lol. Good luck!

[andyaycw]

Well, if I let all of them report a balance, wouldn't that be hurting my score - "too many accounts with a balance" and thus making me look overextended on my credit?

To my understanding, an account is still considered active in the FICO model if it is used once every 3 months, is this correct? I was just thinking of rotating cards in and out, perhaps two or three at a time, but I don't know how many I should allow to report a balance for max FICO points.

[smallfry]

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@andyaycw wrote:
Well, if I let all of them report a balance, wouldn't that be hurting my score - "too many accounts with a balance" and thus making me look overextended on my credit?

To my understanding, an account is still considered active in the FICO model if it is used once every 3 months, is this correct? I was just thinking of rotating cards in and out, perhaps two or three at a time, but I don't know how many I should allow to report a balance for max FICO points.

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You are on the right track. Rotate 2 or 3 cards every month and let them report a balance but pay them off before the interest is due. I highly doubt FICO would intentionally mislead you by saying high achievers let 3 cards report if it weren't true.

[Anonymous]

For many the magic number is up to 4 balances. For me it is 4. There are factors that play a role in to this number. Some fewer than more have a higher limit before points come off. Not really sure why some people are not flagged for too many accounts with balances. This one was still not understood why some do and some don't. However more than less from what I have seen take a point loss when they exceed 3 or 4 balances. All account types are included. If you are asking this question you are probably limited to this limit of 3-4. Your limit might even be 3. You would have to add a new account each month and see if you trigger a noticeable score drop. Then pay off 1 balance and see if score jumps back. Good luck. You will find your magic limit.

[Anonymous]

http://www.ftc.gov/bcp/creditscoring/present/sld008.htm This is what I would go by. max 2 revolving balances for maximum points.

Message Edited by hdj on 09-28-2007 07:34 AM

[MidnightVoice]

andyaycw wrote:

To my understanding, an account is still considered active in the FICO model if it is used once every 3 months, is this correct?

FICO score is a snapshot of the day the score is pulled.  There should be no historical data on useage of a card other than the highest balance.  In theory.  But I get scorewatch alerts if an account becomes active after 6 months of inactivity, so I don't know

[andyaycw]

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@MidnightVoice wrote:

@andyaycw wrote:

To my understanding, an account is still considered active in the FICO model if it is used once every 3 months, is this correct?

FICO score is a snapshot of the day the score is pulled. There should be no historical data on useage of a card other than the highest balance. In theory. But I get scorewatch alerts if an account becomes active after 6 months of inactivity, so I don't know

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What about "Date of Last Activity"? My revolving accounts seem to use the last statement balance as the date of last activity. So if I had a zero balance this month and the month before, but had a balance back in June, it says that the Date of last Activity is June. So either this is reporting incorrectly or I am hallucinating

I always thought that the Date of last Activity was used to determine whether an account is still considered active or inactive.

[fused]

I promised myself that I would refrain from posting on this subject again.

[smallfry]

I think the OP should let every tradeline he has report a balance of 9% and see what FICO says. He could bring it down by 1 TL every month until he reaches his magic number. Tell you what I have noticed on my reports. Once my total of all accounts reaches 30 I get the red flag. Anyone else notice this? I have now seen it on my Experian and Equifax reports. Since my TU only shows 28 total accounts I have not seen it there.