This is the Blog of a guy who retired from a major financial institution in technology.
I chose the title "Cold Fusion Guy" because I love programming in Cold Fusion
4.03.2010
FICO score on "not using credit"
What happens when you have zero CC debt .... FICO score goes down. Makes no sense to me!
Jim, you would know. I have heard, and this sounds like it, that if you don't have a balance on your CC bill, it is as if you aren't using it. Is that true?
What about this. I use citi, and every bill I have has a balance, but they don't charge interest on it, till sometime after the bill. I usually pay it off within a week or so after the bill. Is that still considered carrying a balance?
I think that's what happening to me. We watch the CC very closely (every day). We know when the month closing date is. So lets say I spend $ 1000 per month on the CC. I always pay it off before the statement closing date. Then went I get the statement it might have a balance of minus 50 to plus 50. So it looks like I am not using it when I am actually using it a lot
So then for me, I am actually carrying CC debt, as far as FICO is concerned, because my statements actually have a balance. Citi must calculate interest differently because I am never hit for interest.
Jim; well said. Just keep in mind that your FICO score is not about how credit-worthy you are. It tells lenders how likely you are to pay interest, and hence it's kinda like a volume discount at a bar.
Jim, you would know. I have heard, and this sounds like it, that if you don't have a balance on your CC bill, it is as if you aren't using it. Is that true?
ReplyDeleteWhat about this. I use citi, and every bill I have has a balance, but they don't charge interest on it, till sometime after the bill. I usually pay it off within a week or so after the bill. Is that still considered carrying a balance?
I think that's what happening to me. We watch the CC very closely (every day). We know when the month closing date is. So lets say I spend $ 1000 per month on the CC. I always pay it off before the statement closing date. Then went I get the statement it might have a balance of minus 50 to plus 50. So it looks like I am not using it when I am actually using it a lot
ReplyDeleteSo then for me, I am actually carrying CC debt, as far as FICO is concerned, because my statements actually have a balance. Citi must calculate interest differently because I am never hit for interest.
ReplyDeleteJim; well said. Just keep in mind that your FICO score is not about how credit-worthy you are. It tells lenders how likely you are to pay interest, and hence it's kinda like a volume discount at a bar.
ReplyDelete