PIF or not

[buggle]

I have one open credit card.  To maximize my score, should I PIF each month or leave a small balance showing? 

[MarineVietVet]

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@buggle wrote:

I have one open credit card.  To maximize my score, should I PIF each month or leave a small balance showing? 

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It's a Catch-22 situation. For just one card IMO you need to show a small balance (1-9%) each month because FICO likes to see usage of credit but at the same time FICO also likes to see less than half of revolving accounts with a balance which is impossible with just one account.

If your scores are good though I wouldn't worry that much about it. Some might suggest you get one or two more cards.

From a BK years ago to:

9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Credit Problems Which Is Worse?
Whats In Your FICO Score

[Anonymous]

I'm not sure on this, but I think EQ and TU respond differently to 0 balances.

For me, when I only had one card, I would lose five points on EQ FICO when I reported a small balance rather than 0.  So they liked 0 better for me at that point.

I also had 1 open installment reporting at the time.

I didn't pay much attention to TU because they're rarely pulled for me.

[buggle]

Thanks for your help, Marinevietvet!

[buggle]

Thanks for you help, beamMEup.

[MarineVietVet]

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@Anonymous wrote:

I'm not sure on this, but I think EQ and TU respond differently to 0 balances.

For me, when I only had one card, I would lose five points on EQ FICO when I reported a small balance rather than 0.  So they liked 0 better for me at that point.

I also had 1 open installment reporting at the time.

I didn't pay much attention to TU because they're rarely pulled for me.

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You might be right about EQ and TU looking at zero balances differently. I've never tried to tweak my scores with that kind of detail so I may have spoken out of turn.

From a BK years ago to:

9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Credit Problems Which Is Worse?
Whats In Your FICO Score

[Anonymous]

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@MarineVietVet wrote:

You might be right about EQ and TU looking at zero balances differently.

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Hopefully someone else will chime in more definitively than I can - Hauling!  Where are you????

[Anonymous]

I have never kept a balance, PIF'd every month since 2004.  Went from 620 to 809.   FICO doesn't keep track of long-term balances or personal payment strategies; they only care that the ccc posts a balance every month (even a zero balance from time to time is OK, and shows them that you are paying off the card).  They also care that there's no late payments, and that the Utilization stays low.

However, one major caveat;  if you pay off your balance in increments ($200 here, $300 there) it is a red flag, particularly with Chase.   From what I've seen, paying in increments is a sign that you are low on cash and cannot PIF.   A few months ago my checking account was low and I didn't want to risk a late fee, so I only paid above the minimum payment (a week later I paid the rest off after I transferred funds from a separate account).  Within two weeks, Chase sent me a notice saying my card had been downgraded from a cash rewards to a points card.  Needless to say, I was livid.

Paying the minimum payment every month will avoid a late penalty (bigtime bad on FICO) and make the ccc's lots of money if you have a high APR, but keeping a balance is not required for credit improvement. 

edited for poor wording.

[Jazzzy]

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@Anonymous wrote:

I have never kept a balance, PIF'd every month since 2004.  Went from 620 to 809.   FICO doesn't keep track of long-term balances or personal payment strategies; they only care that the ccc posts a balance every month (even a zero balance from time to time is OK, and shows them that you are paying off the card).  They also care that there's no late payments, and that the Utilization stays low.

However, one major caveat;  if you pay off your balance in increments ($200 here, $300 there) it is a red flag, particularly with Chase.   From what I've seen, paying in increments is a sign that you are low on cash and cannot PIF.   A few months ago my checking account was low and I didn't want to risk a late fee, so I only paid above the minimum payment (a week later I paid the rest off after I transferred funds from a separate account).  Within two weeks, Chase sent me a notice saying my card had been downgraded from a cash rewards to a points card.  Needless to say, I was livid.

Paying the minimum payment every month will avoid a late penalty (bigtime bad on FICO) and make the ccc's lots of money if you have a high APR, but keeping a balance is not required for credit improvement. 

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I guess I can't agree that FICO wants you to post a balance every month on all your cards and that a zero once in awhile is OK. In fact, my husband and I lose points if we let 3 cards out of 7 show a tiny balance versus 2 cards of 7 showing balances.

Also, we often pay cards twice a month (before the statements cut)...and it's not because we are low on cash and can't PIF. We use the cards for the rewards. We have never had negative action from any of the cc companies. I'm wondering if you weren't just caught up in Chase's actions over this past year. They closed a lot of accounts, and they lowered many credit limits. If you were product changed, that isn't as bad as some had it. I don't blame you for being upset, but I don't think it's because you paid twice. It may be because you paid barely over the minimum. That can make them nervous.

[Anonymous]

Thankfully I've never been a victim of Chase's antics via the cc (fees on Chase savings/checking accounts, yes...$12 in fees within 90 days, but I digress...lesson learned for straying from my FCU). 

In September (after I obtained a Discover card and it posted to the reports) Chase automatically increased the CL by 40%.  It was the first CLI I ever received from Chase in over 2 1/2 years of being a customer.  This is when I started thinking that they must be monitoring their customer's actions very closely.

I suppose it could be a coincidence that they converted my account from cash to points right after my "multiple payment month".  They keep posting ads for 5% cash back on their website, in near-identical categories as Discover.  They've even said I can get 5% "cash back" but in the same breath they're converting my card to points???  I do not trust Chase to honor those ads, and will probably just stick with Discover for credit purchases, or get a Fidelity AmEx or a different Visa card.  I already have a points card; having two of them just isn't in the cards.