Well, that wasn’t what the OP was talking about, and that is also wrong. ETA, what I mean by wrong is that it won’t cause your score to be lower to not carry balances.
If you pay them all off in a shorter period of time, the reason your score is going to be lower is because you’ve made less payments overall.
Lets say you borrow 1,000 dollars and pay 10 dollars a month.
In total, you’ll pay for 10 years, That’s 120 on time payments.
If you pay for two months and then pay it off, that’s 2 on time payments.
There’s a difference between what your credit score shows (on time payments, not keeping a balance near your limit) and what a CC company wants from the ideal customer (keeping a balance and paying scads of interest). FICO is not supposed to show an ideal profit-making customer for a CC company, just one that will actually pay up.
Believe it or not, I’ve been on both sides of the desk (not at the same time!). I know what is important, how to evade the creditors and what to do to avoid their scrutiny; how to fool them and how not to fool them; what they look for and what they overlook; what scares creditors into avoidance and what scares deadbeats into submission.
It’s been a full life, y’bet.
It would have to be a very, very tiny desk!
Yes, but if every month for 10 years you charge $100 and pay off $100, (thus never carrying a balance) you also have 120 “on time” payments. There is no need to carry a CC balance to improve your FICO score.
Unsecured Loans (Revolving Credit that isn’t attached to a solid piece of property) do not effect your credit score in the same way that Secured Loans (Car Loans, Home Loans, Revolving Credit with collateral).
Yesbut that has nothing to do with carrying a balance on a CC. Sure, it’s good to show you can pay off a Mortgage or a Car Loan, but there is no reason at all to carry a CC balance (for FICO purposes).
I knw you aren’t claiming that but others are, so I wanted to clarify.
Okay, sorry, I got quite confused.
My bank nearly ruined mine.
Because I was getting lax about remembering to pay my bills (the money was there, the remembering wasn’t) I put all my creditors on auto-bill-pay, and thought that would be one less thing to have to remember.
I gave them ALL the info they needed: account numbers, addresses, amount to send and when.
Unfortunately it was at a time when my previous bank was being bought out and things were still in “transition” to the new bank, so none of my payments got sent out on time, and guess what?
Lowered credit limits, higher interest and poor credit rating.
These were people who until my diagnosis had always been paid on time.
Did I raise hell?
Yes, I did and I am **STILL **trying to patch things up.
Quasi
No, this is not true. While the credit card company itself may have an internal rating for you that indicates you are a less profitable customer (e.g. less forgiveness of late fees upon request), paying off your balance each month or paying over time does not affect your credit score.
I’m not all that worried about what the credit card compnay thinks about me.
I’m more concerned about what’s going to happen in the spring when I go to buy a new motorcycle.
Normally, with my excellent credit, I wouldn’t be sweating one late payment. But with the current economic situation, who knows what lame excuse they might use to deny a loan.
If the payment was less than 30 days late, it will have no effect on your credit.
The “lame excuse” is with the current economic situation, they believe that even people with excellent credit might default. Part of why Detroit is foundering is that the masses of people who buy cars on credit are no longer able to.
This might be too late to revive this, but I have had credit card companies give me the benefit of the doubt at least a half a dozen times and rescind the late payment charge. The last time was just last month. It doesn’t hurt to call them and tell them your story. They don’t have to do it but if you are a good customer they do.
And speaking of the devil. I just got a call from the bank saying that my latest phone payment wasn’t cleared (no way that could have happened) and threatening to bury me under late charges and ruin my credit.
After some aggressive questioning on my part, it turns out that THEY copied the wrong account number and the bank rejected it, of course. I still have to go in person and pay in cash for their error. No late fees, of course.
The lesson being, always fight a late charge.