score dropping while carrying no balances whats up!

[Anonymous]

If one is not in real credit utilization trouble (e.g.., always PIF every CC), why worry about the month-to-month balances being reported to the CRA's, until you anticipate a large transaction?  At that time, you don't need to fool around with report timing.  Just pay all of your CC balances sufficiently below $0 so that the next month's billings couldn't possibly hurt your scores.  CCC's do accept overpayments, you know?

[Anonymous]

Yes I'm with Capital one and have payed more then I owe everymonth but the problem I think is when we pay because although we don't hold a balance for more then 30 days they report on a certain day of the month I herd was the 15th i don't know but you can use your credit card 0n the 10th and pay it on the 20th and the balance will show on your credit, there for bringing it down.

[haulingthescoreup]

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@Anonymous wrote:

Yes I'm with Capital one and have payed more then I owe everymonth but the problem I think is when we pay because although we don't hold a balance for more then 30 days they report on a certain day of the month I herd was the 15th i don't know but you can use your credit card 0n the 10th and pay it on the 20th and the balance will show on your credit, there for bringing it down.

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You need to look at your old statements to see when your account posts.

Almost every CC reports the balance showing on your statement, on that statement date. Get familiar with your financial records, so that you know what is being reported and when.


edited to clarify to which post I was replying.

Message Edited by haulingthescoreup on 10-02-2008 01:55 PM

[Anonymous]

There are two parts to this answer.  First, FICO uses a ratio of what you owe to what you have as a total credit limit.  If the sum of your credit cards is 12,000 and you owe 6,000 then your ratio of debt to limit is 0.5 and that is bad according to FICO.  To get acceptable ratio it has to be under 0.49; therefore, consider getting another couple of cards to increase the totality of the total credit limt.  The second part is that in today's credit market, credit card issuers are dropping or reducing what you can borrow. Therefore you could increase your credit ratio above that magic 0.49 figure by simply having the lenders drop your allowable limit.  For example, suppose you owe 6,000 with a credit limit of 24,000.  That ratio is 0.25.  Suppose they cancel one card and reduce the others so that your new limit is 10,000.  Your ratio just became 0.6 and you are now a "bad" credit risk due to having too much debt.  Remember, FICO is in buisness to sell information about you.   And credit cards are in business to reap as much interest as they can get from you.  It is not about being "fair" but about taking money from your wallets and into their accounts.  I hope this helps.

[Anonymous]

I disagree that the reason why the credit score went down is because of not leaving a small balance. You might have closed out a credit card, the bank might have lowered your credit limit or it could be a combination of those things. I would just keep an eye on the score after 3 months and if your credit habits are roughly the same as from the previous period then I would worry.