Scoring Question

[H20eng]

I started getting my credit cleaned up in late Aug.  I've got from 524 to 675-679 depending on which CRA you look at over the past 2 months.  Wells Fargo has me 701 based on FICO Score 9.  One of the scoring factors Wells Fargo states that my score is being negatively impacted by not carrying a balance on revolving credit.   I've picked up a Discover & a Cap1 card in the past 2 months (only 2 I have for now).  Both are being used quit a bit but being paid off in full each month.  I'm actually making multiple payments a month on Cap1 due to a $500 limit hoping that the usage will help bump my limit increase on the first review.  Anyway, am I better off showing a small balance on one of the cards each month or paying it off in full?  It seems that you see one camp saying don't carry a balance but then I see I'm being negatively impacted for not carrying one.           

[StarkRaven$]

20 minutes ago, H20eng said:

I started getting my credit cleaned up in late Aug.  I've got from 524 to 675-679 depending on which CRA you look at over the past 2 months.  Wells Fargo has me 701 based on FICO Score 9.  One of the scoring factors Wells Fargo states that my score is being negatively impacted by not carrying a balance on revolving credit.   I've picked up a Discover & a Cap1 card in the past 2 months (only 2 I have for now).  Both are being used quit a bit but being paid off in full each month.  I'm actually making multiple payments a month on Cap1 due to a $500 limit hoping that the usage will help bump my limit increase on the first review.  Anyway, am I better off showing a small balance on one of the cards each month or paying it off in full?  It seems that you see one camp saying don't carry a balance but then I see I'm being negatively impacted for not carrying one.           

Opinions on this topic is just that, opinions. I will say based on personal experience that you may increase your Fico's  as much as 20 - 40 points by letting $2.00 report on just one account. I tested this too and and this was my result.when I was rebuilding and my Fico's were in the mid to upper 500's. 

 

I'd be careful and not pay in full multiple times throughout the month. Just pay in full once before or on due date. Too much exposure on paying a credit card charges before due date may appear like you are desperate and living hand to mouth.

Edited November 6, 2021 by StarkRaven$

[H20eng]

I left a $1 balance on the Discover Card last month on purpose to see what would happen.  Discover actually credited the $1 after I made the payment, showed a $0 balance. That shocked me, lol.   Good point on the multiple payments, I'll just do a single payment from now on.      

[StarkRaven$]

1 hour ago, H20eng said:

I left a $1 balance on the Discover Card last month on purpose to see what would happen.  Discover actually credited the $1 after I made the payment, showed a $0 balance. That shocked me, lol.   Good point on the multiple payments, I'll just do a single payment from now on.      

Yeah, I've read about that happening. I have left up to but no more than $5.00 to make it work and there was no % charged. Try $2 to $3 next time. Let us know how it works for you.

[hdporter]

2 hours ago, H20eng said:

I left a $1 balance on the Discover Card last month on purpose to see what would happen.  Discover actually credited the $1 after I made the payment, showed a $0 balance. That shocked me, lol.   Good point on the multiple payments, I'll just do a single payment from now on.      

 

I believe this is exactly why the advice is to have $2 report on one card (because one or more issuers will credit a $1 balance and report $0)!

[H20eng]

I'll leave $3 on the balance this month and see what happens.  The Cap1 card should also hit the reports this month so I'm hoping to see scores over 700 this month.  

Edited November 6, 2021 by H20eng

[cv91915]

First of all, congratulations on your progress so far.   

 

I wanted to clarify one thing from your original post.

 

7 hours ago, H20eng said:

It seems that you see one camp saying don't carry a balance but then I see I'm being negatively impacted for not carrying one.           

 

... and if you already know this, someone else reading this later may not.

 

There is an enormous difference between letting a balance report and carrying a balance.

 

Letting a balance report means that the statement closes with more charges posted than credits/payments, and the balance gets reported to the CRAs.  If you pay the statement balance in full every month (as you should), you pay no interest.

 

The phrase "let a balance report" is kind of odd, because this is how most people (including me) use their cards every month.  You buy stuff, buy more stuff, order stuff, buy other stuff, pay a bill, pay another bill, and then you get a statement.  After that, you just pay the entire statement balance by the due date.  

 

Carrying a balance means you don't pay the statement balance in full, which means that absent some sort of a promotion on the card, you will pay interest. 

 

You absolutely positively do not have to pay interest ("carry a balance") to have a good, great, or even a perfect FICO score.  The scoring algorithm doesn't know if you're paying interest or not.

 

 

[credithoarder]

5 hours ago, H20eng said:

I'll leave $3 on the balance this month and see what happens.  The Cap1 card should also hit the reports this month so I'm hoping to see scores over 700 this month.  

 

From personal experience, I would let the Cap1 card report a $2 balance (current balance).  Meaning, make sure you have PIF by the due date, then make and leave a small charge equivalent to $2 after your due date payment has posted.

 

I would PIF your discover balance. Unlike Cap1, Discover's statement closing date is also the same date the send a balance issuance to the CRAs. Where as Cap1 reports it 2-3 days after the closing statement. That technically buys you time to modify the amount that is reporting in your statement balance before they send out the report. You will not have that flexibility with Discover, and yes, they not report any amount under $2. Whereas, Cap1 definitely will. 

Edited November 7, 2021 by credithoarder
incomplete sentence

[H20eng]

Sounds like I still have more to learn about the credit game, lol.  I paid the Discover off yesterday. My Cap1 bill is due on 11.09 with a min payment of $0.00 due.  I have a balance of $390.  I'll pay $388 today which should leave me still PIF for this month (i.e. no interest) with $2 left on it to report.  FYI, the $0 min payment is due to me making a payment a few weeks ago.  I won't be making multiple payments again after this month but I don't want a $390 balance being reported.  Am I missing anything?  

  

[StarkRaven$]

2 minutes ago, H20eng said:

Sounds like I still have more to learn about the credit game, lol.  I paid the Discover off yesterday. My Cap1 bill is due on 11.09 with a min payment of $0.00 due.  I have a balance of $390.  I'll pay $388 today which should leave me still PIF for this month (i.e. no interest) with $2 left on it to report.  FYI, the $0 min payment is due to me making a payment a few weeks ago.  I won't be making multiple payments again after this month but I don't want a $390 balance being reported.  Am I missing anything?  

  

Just pay all your credit cards by or before the due date and you'll be fine. Allow Cap1 to leave no more than $2.00 unpaid and you'll pay no interest. The other credit cards pay in full by due date.

[credithoarder]

That will do it. You should see a short bump in your credit by the next cycle.