Exactly how much of your available credit is optimal to be used? Say I have 6 credit card totally 18000 in credit. Is it best to have them all paid off? or to keep a balance? I am currently trying to pay off my credit cards and I was wondering if it would hurt me to carry no balance? In addition, husband is rebuilding his credit. We have transferred his high interest credit onto one of my 0% apr cards. Should he keep a balance on his credit card as well?
I agree with keepmine. If you don't have to pay them interest, don't. They already get enough money from us in merchant fees (and some) annual fees. Then you have balance transfer fees, overlimit fees, late fees, should I continue? Dani
I think I read somewhere that if you must keep a balance (or balances), that creditors don't like to see more than 35% of your available credit used. Can anyone verify this?
There'a a theory that the score needs input so you want to use the card. but there certainly is NO requirement to keep large balances. If you have to keep balanced, under 24-29 percent is best. but if you have no debt keep it that way. Use every card once a month for 6 months but keep the balances at under 20 each. use the grace periods, pay them in full every month. that will load the formula with good data but no real balances. when you want to apply for something leave little or no 20 balances you'll get score maximization also, call 8885optout and opt out of the promo offers if you really want score max (the promo inquiries hurt your score). my scores are now 693 and 738 and I have a 3 year bk. this is what I do...
What does bk mean? If I opt out does that mean those credit card offers will stop coming to my house?? please say yes!
sweetchild, Also, if you don't want to carry a balance but you *do* want to have the credit card issuer report a balancee to the credit reporting agency, you can: 1. find out what date the credit card company updates to the reporting agency (usually this is on the date the account cycles). 2. charge a credit card a week or so before the account cycles and then pay it off in full before the account cycles again. That way, you can trick the reporting agencies into thinking that you carry a balance when you really don't. This only works for cards that have a grace period for purchases. Not all do, so check your cardmember agreements to find out whether your cards do.
sweetchild Doesn't that hurt your score too? If you don't use your credit at all? my educated guess....yes and no it all depends where you fit on the food chain. I would say if you have a long and excellent credit record-it will not hurt you at all. my case all of my credit is 3years old or less I just paid 2 cards off to a zero balance...what did I get 40 pts! so it is all who you are and what your are...creditcally speaking.....LOL my 2-fiddy
THE OPTIMAL BALANCE TO LIMIT RATIO IS $1 if the balance is 0 a "lack of recent revolving balance information" may be generated." In my experiment, a balance of $130 on a 20k card still deducted points. $1 is optimal. Also, you should have a balance on about 1 out of 4 cards. There a no codes for "too much available credit" on the standard fico scoring model. although, Capital One has their own model and they don't like large amounts of available credit but they are the ony ones that I know of.
Good points, Big Beacon, but on the NextGen model, didn't FICO introduce an adverse reason code for "too much available credit"? I know that a lot of lenders aren't using NextGen yet, though...
I got that FAKE reason code..."TOO MUCH AVAILABLE CREDIT" I have seen some new reason codes..."not enough NEW credit"... ...balances too low... ...too many accounts with NO balance... NOT ENOUGH INQUIRES WILL BE A GOOD ONE!!! YOU WILL LOVE THIS ONE..."INCOME TOO HIGH"!!!!!!!!!!!!! FULL OF JOKES!!!
