- Centurion Member
- Posts: 3962
- Joined: Thu May 08, 2014 7:42 pm
- Location: United States
It is true that you will have lower FICOs if you have no card reporting any balance at all. But I think you're confusing carrying a balance with letting a balance report. For example:
Say you have a statement that opens Dec. 1 and closes Dec. 31. The payment is due Jan 20th. You don't actually buy anything after Dec. 29, to keep things simple here.
If you pay off all your purchases on Dec. 30th, then your reported utilization is 0%. This will hurt your FICOs little, but you don't pay any interest. This is sometimes simplest, and often desirable when you have many cards you use every month.
If you pay off most of the purchases on Dec. 30th, and the rest on Jan. 10, you let a small balance report and you don't pay interest. This is letting a balance report. This is the best of both worlds. You're paying within the grace period - which all cards but some really crummy subprime cards have. You also show you're using the credit.
But say you don't pay the card off in full by Jan. 20th. You have the same FICO boost as you do from letting a balance report, but you're paying interest. This is a bad idea. This is carrying a balance. Prospective future lenders may be uneasy about the fact that you're not paying in full, since it makes you look like you're at risk of default.
You only need to have one card report a small balance to optimize your FICOs. I have 6 cards. If 5 of them report a balance, my FICOs are lower than if just one reports.
Keeping indefinitely: IHG, SchwabPlat, CSP, Discover, Freedom, ED, BCE, Hyatt
May close or PC: Prestige, Arrival, BrooksBros
AA Platinum converting into Costco
Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech
Letting new accounts cool off since May