POLL: Credit report - help settle an argument

[Vic]

In general, paying it off in full is the right way to go. CC debt is the debbil!

BUT, carrying a balance on your credit card(s) does not affect your credit score negatively until the balance exceeds 50% of the limit.

Here's another thing. If you use the card every month, then the credit bureaus don't know that you pay it off in full every month. All the bureaus will see is the same end-of-the-month balance that is on your billing statement, along with the minimum payment due.

So... pay it off in full for you, because carrying CC debt is a bad financial idea that can cost you a fortune in interest charges and possibly leave you trapped in a lifetime of debt, and never charge more than 50% of your limit for your credit.

 

[Cable God]

Originally posted by: cr4zymofo
Use the card, make payment early every month, and make payments much more than your minimum due (x3).

Nope, not entirely right. If you pay at the least $1 a month over the minimum, you will be labeled as pays more the minimum. It is a GOOD thing to revolve a little debt. It raises your score BETTER and FASTER than paying it in FULL every month. www.creditboards.com has ALL you need to know on this subject.

Edit: Beep your utilization below 10% and this will impact your score better than a $0 balance. Some creditors will NOT report anything for months you don't have a balance, which does NOTHING for your score.

 

[Vic]

Originally posted by: cablegod

Originally posted by: cr4zymofo
Use the card, make payment early every month, and make payments much more than your minimum due (x3).

Nope, not entirely right. If you pay at the least $1 a month over the minimum, you will be labeled as pays more the minimum. It is a GOOD thing to revolve a little debt. It raises your score BETTER and FASTER than paying it in FULL every month. www.creditboards.com has ALL you need to know on this subject.

Edit: Beep your utilization below 10% and this will impact your score better than a $0 balance. Some creditors will NOT report anything for months you don't have a balance, which does NOTHING for your score.

No. I will say it again. The bureaus do not know if you pay more than the minimum -- there is no such label or scoring criteria. The bureaus also do not know if you pay early. It does not help your score to revolve a little debt. What yllus posted earlier is EXACTLY right.

Pay on time. Keep your balance at all times less than 50% of your limit. The posters on creditboards are just as often wrong as posters here are wrong (about a great many things). Find facts here.

 

[Salvador]

I'd tell you, but you probably don't care to hear about it.

Sal

 

[sillymofo]

Originally posted by: Vic

Originally posted by: cablegod

Originally posted by: cr4zymofo Use the card, make payment early every month, and make payments much more than your minimum due (x3).

Nope, not entirely right. If you pay at the least $1 a month over the minimum, you will be labeled as pays more the minimum. It is a GOOD thing to revolve a little debt. It raises your score BETTER and FASTER than paying it in FULL every month. www.creditboards.com has ALL you need to know on this subject. Edit: Beep your utilization below 10% and this will impact your score better than a $0 balance. Some creditors will NOT report anything for months you don't have a balance, which does NOTHING for your score.

No. I will say it again. The bureaus do not know if you pay more than the minimum -- there is no such label or scoring criteria. The bureaus also do not know if you pay early. It does not help your score to revolve a little debt. What yllus posted earlier is EXACTLY right. Pay on time. Keep your balance at all times less than 50% of your limit. The posters on creditboards are just as often wrong as posters here are wrong (about a great many things). Find facts here.

MmmmmK.... google is your friend.

 

[spidey07]

Originally posted by: cr4zymofo

Originally posted by: Vic

Originally posted by: cablegod

Originally posted by: cr4zymofo Use the card, make payment early every month, and make payments much more than your minimum due (x3).

Nope, not entirely right. If you pay at the least $1 a month over the minimum, you will be labeled as pays more the minimum. It is a GOOD thing to revolve a little debt. It raises your score BETTER and FASTER than paying it in FULL every month. www.creditboards.com has ALL you need to know on this subject. Edit: Beep your utilization below 10% and this will impact your score better than a $0 balance. Some creditors will NOT report anything for months you don't have a balance, which does NOTHING for your score.

No. I will say it again. The bureaus do not know if you pay more than the minimum -- there is no such label or scoring criteria. The bureaus also do not know if you pay early. It does not help your score to revolve a little debt. What yllus posted earlier is EXACTLY right. Pay on time. Keep your balance at all times less than 50% of your limit. The posters on creditboards are just as often wrong as posters here are wrong (about a great many things). Find facts here.

<a class=ftalternatingbarlinklarge href="http://headlines.agapepress.org/archive/1/212004g.asp" target=blank>MmmmmK.... google is your friend.</A>

yep, sure is and backs up Vic.

 

[dullard]

Originally posted by: Vic
Find facts here.

Vic, I want to know your opinion on this quote from your link: "Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower score."

We've had this discussion before and you disagreed with that quote. I just find it interesting that now you post a link using that quote.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Find facts here.

Vic, I want to know your opinion on this quote from your link: "Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower score."

We've had this discussion before and you disagreed with that quote. I just find it interesting that now you post a link using that quote.

I don't recall ever disagreeing with that statement. Perhaps this was in a different context?
The reason why you shouldn't open a lot of new accounts you don't need is because "Length of Credit History" is 15% of your score, and is calculated as an average of all your accounts. For example, if you have 2 accounts on your credit, and 1 is 10 years old, and the other is 2 years old, your average length credit history is 6 years. If you suddenly open 3 new accounts, that number just dropped to less than 3 years, and that can lower your score up to 15%. Your score would not be reduced because of your total number of accounts, but because of the age of the new accounts. Given time, your credit would re-establish.

I think what I may have said in the past is that, as long as you're responsible in your borrowing habits, you should never hesitate to have the credit limits on your existing accounts raised. That could actually improve your score (balance to limit ratio). IIRC, that discussion was over some fiction about how people shouldn't raise their existing limits because lenders are concerned about "potential debt" (they're not).
Btw, having your existing limits raised is something you should do when you don't need the money. The only time banks don't want to lend you money is when you actually need it.

MyFico.com is owned by Fair Isaac, the company that invented the credit score. If anyone has questions about how credit scores work, they should start there.

 

[CraigRT]

if i have more debt than I can afford to pay off in one chunk (which i usually do) i usually pay $3-400 at one time (set payments) which is WAY higher than the minimum payments...

that's the way I do it.. minimum is too little... pay the max you can afford (or at least more than the min.) is all it boils down to IMO!

 

[dullard]

Originally posted by: Vic

Originally posted by: dullard

Originally posted by: Vic
Find facts here.

Vic, I want to know your opinion on this quote from your link: "Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower score."

We've had this discussion before and you disagreed with that quote. I just find it interesting that now you post a link using that quote.

I don't recall ever disagreeing with that statement. Perhaps this was in a different context?

You could argue that it was in a slightly different context. It was in another discussion about obtaining a good credit score and how many CCs (or similar accounts) should a person have. I said a person should have 2-3 credit cards, a couple of store cards, a couple of bank accounts (car loans, mortgage, etc) - and try to stick to just those. That should put you above the 4 account minimum for good credit and should be all that a person needs. After obtaining those, I then recommended that people DON'T open a bunch of extra accounts as it could harm your credit score and since they really don't need them. Of course if you find an account that would be really useful, go ahead and get it, but don't go and apply to everything under the sun. You responded saying that my advice was outdated, and how you work in the bank business so you know things don't work that way any more. That is why I asked here what your opinion is now.

 

[Vic]

Originally posted by: dullard

You could argue that it was in a slightly different context. It was in another discussion about obtaining a good credit score and how many CCs (or similar accounts) should a person have. I said a person should have 2-3 credit cards, a couple of store cards, a couple of bank accounts (car loans, mortgage, etc) - and try to stick to just those. That should put you above the 4 account minimum for good credit and should be all that a person needs. After obtaining those, I then recommended that people DON'T open a bunch of extra accounts as it could harm your credit score and since they really don't need them. Of course if you find an account that would be really useful, go ahead and get it, but don't go and apply to everything under the sun. You responded saying that my advice was outdated, and how you work in the bank business so you know things don't work that way any more. That is why I asked here what your opinion is now.

Different scenarios.
How many accounts a person has doesn't matter, although in my experience people with wisely managed credit tend to have a minimum of accounts.
The precaution from that link was not to open a number of new accounts. It's the new-ness of the accounts, and the opening of a lot of credit at once that will hurt your score in that scenario. Better to have the limits of your existing accounts raised or, better yet, not borrow more than you need to.

 

[DorkBoy]

Originally posted by: Mill

Originally posted by: cr4zymofo
Use the card, make payment early every month, and make payments much more than your minimum due (x3).

Paying early doesn't effect your score.

No, but being late will