Credit gurus....payment question

[slow99]

Enjoy your debt lifestyle, plastic slave!

[Roscoe]

Enjoy your debt lifestyle, plastic slave!

[Chili]

Pay it off. The more available credit you have, the better your score will be.

Too much available revolving credit can actually take away from your score.. Like if you have 100k available on credit cards.

[momo]

technically if you are chasing max score, typically having between a 1%-10% credit card utilization is better than 0%.

[zachary]

Too much available revolving credit can actually take away from your score.. Like if you have 100k available on credit cards.

Exactly, we have always made payments on time for the last 11 years, never one late and always paid more than minimum. We get loans from banks once a year or so to pay for something and we buy something with a different card once a month to put something on it and pay it off. IE a tank of gas or groceries, then pay in full before that billing cycle is over. Her score hoovers around 8-815(obviously depending on which of the three you look at), mine is not that high of range. Last bump when made that 5k payment was from 740 and jumped to 761. So now do i pay 10k in one payment and get another 20-30 point bump or divide into two and see what happens...?

Maybe this could be an educational tool for all of us and I will post how it increases in a month!

[Chili]

technically if you are chasing max score, typically having between a 1%-10% credit card utilization is better than 0%.

Yeah, and the negative / positive impacts occur at thresholds.

To Danny's point, this really should be something taught to HS students. One challenge is that the credit agencies very closely guard their models and don't want people to know all of the ins and outs in great detail, so that hey don't manipulate them.

[zachary]

Yeah, and the negative / positive impacts occur at thresholds.

To Danny's point, this really should be something taught to HS students. One challenge is that the credit agencies very closely guard their models and don't want people to know all of the ins and outs in great detail, so that hey don't manipulate them.

Exactly hell when i was 18 and got a best buy credit card i was like whaaa this is amazing! Then got married and my wife straightened me out and it has been EXTREMELY beneficial. Not having to worry about loans etc, getting lowest rates possible on things, it really can have a positive impact on your life...i however do HATE that this is how the world works

[CWO]

Too much available revolving credit can actually take away from your score.. Like if you have 100k available on credit cards.

It's all relative. DTI and stuff.

[CWO]

technically if you are chasing max score, typically having between a 1%-10% credit card utilization is better than 0%.

This is true as well. It makes no sense to me, but having a small balance vs 0 balance is better for your score. Go figure.

[momo]

This is true as well. It makes no sense to me, but having a small balance vs 0 balance is better for your score. Go figure.

i think it makes you more attractive to lenders since you actually use credit thus potentially pay interest. otherwise they make nothing off you (aside from potential annual fees) while you get points/miles.

[Big A]

This is true as well. It makes no sense to me, but having a small balance vs 0 balance is better for your score. Go figure.

Not using credit at all gives them no measure of one's worthiness to pay money back in a timely and consistent manner, which is what your credit score is. In that same vein, when you pay cash for everything your credit score will suffer, regardless of how much you make.

[Roscoe]

[CWO]

Not using credit at all gives them no measure of one's worthiness to pay money back in a timely and consistent manner, which is what your credit score is. In that same vein, when you pay cash for everything your credit score will suffer, regardless of how much you make.

Well that makes complete sense if you open a credit line and never use it. I imagine that's not the case for most people. I'd say most people open a credit line, pay on it for x amount of months/years and eventually pay it off. It's silly to me that they consider it "better" to carry a $150 balance on a credit card with a $2000 limit than to pay it off completely. Being that the card issuer doesn't make money at all unless you carry a balance, it may be in their best interest, but it makes more sense to me that your credit score would be better by basically saying, "I borrowed $2000 and now it's completely 100% paid off, can I have more now?"


I guess I just need to look at it as if the credit card company is offering you a better score if you continue to use their card, no matter the balance as long as it's paid on time.

[Roscoe]

Being that the card issuer doesn't make money at all unless you carry a balance, it may be in their best interest, but it makes more sense to me that your credit score would be better by basically saying, "I borrowed $2000 and now it's completely 100% paid off, can I have more now?"

Depends - did you buy one large item and are spending the next xx months paying it off? Yeah, they'll make money off of you.

Do you pay it off at the end of every month and use it frequently? They are making their money off of the merchants in transaction fees.

[slow99]

Boost up your "I LOVE DEBT SCORES" debtors!

The rich rules over the poor, And the borrower becomes the lender's slave.

http://bible.knowing-jesus.com/topics/Debtors#sthash.0LBBvbsI.dpuf