Paying in full vs. carrying a balance does not impact scoring in itself. The only thing that matters there is the reported balance. If cards are paid to $0 prior to the date the lender reports the balance (statement closing date for most lenders), they are treated the same as if they had no activity. There are scoring penalties for having all revolving accounts at $0 as not using revolving credit at all is seen as a higher risk than responsibly using revolving credit. (There is an additional penalty if you have authorized user accounts and they are all reporting $0.) There are also potential penalties if you have a large number of accounts reporting a balance.
FICO has an 'all zero penalty' so you should always have at least one card report a small balance each month (a revolver, not a charge card). 2-5 points is quite minor though - compared to the loss of 10-20 points on some profiles. The loss is temporary, once a balance reports the points come back.
You can let the balance report then pay it off anytime after the statement cuts, but before the due date, to avoid interest.
@txgal73 wrote:Over the past few months I PIF for all CCs. The bureau snapshot is $0. One month scores stayed the same and the other 2 showed 2-5pt drops. There have been no other changes. When I google this there are mixed answer. So, what do y'all say? Does PIF hurt scores?
As @K-in-Boston mentions, paying in full does not have an effect on utilization.
FICO "utilization" is based on your reported balance.
The date of the reported balance is usually -- but not always -- the statement balance. You need to monitor your reports to know for sure; CSR's don't reliably have 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. Synchrony reports at irregular intervals altogether.).
Assuming your statement balance is your reported balance, paying in full before the statement date gives you 0% utilization, while paying after the statement date gives you utilization based on the balance you paid off.
