Carrying extremely high balances on all revolving accounts can make one look "maxed out" on available credit. It is often considered a high-risk trait by lenders and the FICO score.

The impact on the FICO score depends on how high the current balances are on revolving accounts. If high balances are carried, the impact will probably be minimal. The impact will be more noticeable if the balances are currently low or medium.

Bottom Line: Carrying very high balances on all revolving accounts can have a negative impact on a FICO score.

(Remember that even if credit cards are paid in full each month, the balance shown on a credit report may not be $0. Instead, it will reflect the account balance at the time the lender supplied the update to the credit reporting agency.)
 

3 Comments on High Credit Card Balances and FICO Scores

Great point Dwayne. I have clients come in all the time boggled because they always make their payments on time but have a low score. Then I notice that their cards are maxed out. They act as if they had never heard of the "stay below 30% of your credit card limit rule". From what I have seen, maxed out cards hurts people just as bad as lates. Is that relatively accurate?

03/13/2008 05:53 PM by Jeff Fullmer - Credit/Investment Expert (National Foundation for Credit Excellence)

Jeff... that's the first time I heard the 30% number. I've heard try to get all your accounts first under 75% max, then work them down under 50% and finally 25% is the goal

03/13/2008 07:12 PM by Realty Executives - Erica Ramus - 570 622 6006 - Schuylkill

It seems that 25% and 30% are the two target numbers I keep reading about.

03/13/2008 11:21 PM by Jeff Fullmer - Credit/Investment Expert (National Foundation for Credit Excellence)

Leave a response…

Name:
Notify me of new comments:
Comment:
What does the graphic say?
 
Financial Planner: Dwayne Calk (RMCN Credit Services)
Dwayne Calk
Mc Kinney, TX
More about me…
RMCN Credit Services

Office Phone: (972) 529-0900 Ext.: 345
Cell Phone: (214) 207-1907
Email Me

Links

Tags (Tag Cloud)

Archives

RSS 2.0 Feed for this blog
ATOM 1.0 Feed for this blog

Find TX real estate agents and Mc Kinney real estate here on ActiveRain.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
© 2007 ActiveRain Corp. All Rights Reserved