started reusing an old account, will this boost my score?

[Tom_Mi]

Thru our CH7, Macy's never closed my wife's store account (was zero balance, never late). So this weekend she tried using the card and bought 400 in clothes for her new job. We have the cash and will pay it all this month.

So, will revitalizing this old stale account give her score a boost? She has a similar (Victorias secret) account that's still alive with zero balance.

Just trying to determine if using the credit helps, or if most of the benefit just comes from having the open line.

[Logan]

I had an American Eagle Outfitters CC and a Dell card survive my BK. I used my AE card once but it ended up getting closed shortly after my discharge. I bought a TV on my Dell card and paid it down over time (0% offer).

I credit this as helping my score early on.

Logan

[backtoschool]

Buying and paying things off in full on a credit card will boost your fico score, but your score might take an initial small hit, as your utilization goes up before your payment is showing up.

So in the long run, showing a history of buying and paying things off will help your score, but in the short run, you might look like you have a little bit of debt, which would lower your score until the payment shows up and clears out the balance.

[whipster1]

What I've been doing is buying small items and paying off before the statement cuts. Macys will give a nice CLI after a few months of usage. I have had Macys since it was Foleys and before that it was something else I can't remember...glad they kept it open as a zero account for me.

Always good to buy a token item every once in a while on old accounts because sometimes they will close them.

[Logan]

What I've been doing is buying small items and paying off before the statement cuts. Macys will give a nice CLI after a few months of usage. I have had Macys since it was Foleys and before that it was something else I can't remember...glad they kept it open as a zero account for me.

Always good to buy a token item every once in a while on old accounts because sometimes they will close them.

I don't think the credit agencies would know you charged and paid off if your balance is 0 every month?

Leave 10 bucks on each statement so it the agencies see you paying it off.

Logan

[backtoschool]

Credit cards will report your highest balance to the credit bureaus. So if you charge a ten dollar item and pay it off if full each month, then your highest balance will show up as $10. But if you buy a plasma tv for $1,500 and pay it off at the end of the month, then your highest balance will show as $1,500. Of course credit wise, it is better to have shown a record of paying off higher balances. The ability to pay off $10 is not really proving you are a credit risk.

[Logan]

Credit cards will report your highest balance to the credit bureaus. So if you charge a ten dollar item and pay it off if full each month, then your highest balance will show up as $10. But if you buy a plasma tv for $1,500 and pay it off at the end of the month, then your highest balance will show as $1,500. Of course credit wise, it is better to have shown a record of paying off higher balances. The ability to pay off $10 is not really proving you are a credit risk.

Are you saying that the credit bureaus know if someone charged something on their credit card and paid it off on full prior to the issuing of the statement?

[Tom_Mi]

Are you saying that the credit bureaus know if someone charged something on their credit card and paid it off on full prior to the issuing of the statement?

Good question, I was about to pay it off now (3 days later). Should I wait?

[backtoschool]

Are you saying that the credit bureaus know if someone charged something on their credit card and paid it off on full prior to the issuing of the statement?

Not necessarily prior to the issuing of the statement. But your credit cards report the highest balance on the card at any time to the credit bureau as part of their monthly reporting. So if you charge a $1,500 item and pay it off, that will show on your credit report, same with a $10 item, if that is the highest item you have charged to that point.

[Logan]

Not necessarily prior to the issuing of the statement. But your credit cards report the highest balance on the card at any time to the credit bureau as part of their monthly reporting. So if you charge a $1,500 item and pay it off, that will show on your credit report, same with a $10 item, if that is the highest item you have charged to that point.

I disagree with the above statement. I had $2500 on my chase card last month and I paid it off prior to the statement because I wanted it at 0. I get all three bureau credit reports every month and all 3 reported my balance at 0 and my credit line at 7K. I cut and pasted it below but it didn't format correctly.


CHASE - Credit Card, Terms REV
REVOLVING REVOLVING REVOLVING
Account Number
Ownership Individual Individual Individual
Date Open 08-2008 08-2008 08-2008
Balance Date 10-2009 10-2009 10-2009
Balance Amount $0 $0 $0
Monthly Payment $34
High/Limit $7000 $7000 $7000
Account Status Pays account as agreed This is an account in good standing Paid or paying as agreed
Prior Delinquency
Past Due Amount $0

[Logan]

It formatted ok but no where does it say I had a balance so as far as the credit agencies are concerned, I never used my account. As you can see the Credit limit in this case was reported (7000), NOT the highest balance charged in the past.

One of the bureaus has a monthly payment at $34 which was my previous statements minimum payment.

This is why I say leaving 10$ on the statement and paying it off will at least show the credit agencies that you are using your card and paying it off--even if it's only $10.

Logan

[backtoschool]

There are different views of credit reports that have different information in them. Your highest balance on each card is available to creditors that are checking your credit. It may not show up on the particular consumer version of the report that you pulled.

Consumer versions of credit reports, especially the ones you can pull for in unlimited quantity for free, often do not contain all the information that creditors are seeing.

[Logan]

There are different views of credit reports that have different information in them. Your highest balance on each card is available to creditors that are checking your credit. It may not show up on the particular consumer version of the report that you pulled.

Consumer versions of credit reports, especially the ones you can pull for in unlimited quantity for free, often do not contain all the information that creditors are seeing.

These were not free credit reports and since I spent 4 years in the mtg business looking at other peoples credit I know a little about this.

Maybe you're correct but not from my experience.

Logan

[Tom_Mi]

Hey one more question...Macy's (zero balance) wasn't in my original list of CH7 creditors, and aren't mentioned on my BK petition.

Can I assume they'll properly send me a statement in the mail? I don't want to pay late!!

Should I call a CSR there and make sure all is well?

[justbroke]

Suffice it to say that there is more data used in credit reporting than most people "see" in a given report. (I did a little work on the "database" side of a major CRA once, and in the payment card industry as well.) Please trust me, they use this information to form models. They actually track spend/pay patterns to determine the best customers (known as the revolvers... of which there are different types).

The worst people, other than those that don't pay.... are the transactors. Those who pay their balance off each month. I remember when CitiGroup took all the transactors on their AA card one year, and reduced the available credit line. Just because they used the bank as a 1-59 day interest free cash advance. Many credit card companies responded with complex formulas using an "average daily balance" in order to combat this practice.