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High Balances?


Gandolf
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Do these affect yoru credit score? I know that your CURRENT balance as a fraction of the available credit is a big factor but if you run your card up to it's max and then pay it off in full will the fact that it was once maxed out or close bring your score down? If so about how much? Any info would be great, thanks!

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It will only affect your score if it REPORTS as being maxed out. If you pay in full before the account reports, FICO will never even know it was maxed out. All that counts is what is reported by the OC.

So say your Ripoff National Bank card reports on the 10th of the month. You run up the card after that and max it out on the 27th. As long as you pay it off before it reports again on the 10th of the next month, maxing it out won't affect your score in the slightest.

You should always familiarize yourself with when each card reports. Some report when the statement closes. Some report at the end of the month, regardless of the statement date. Some report on the day the payment is due (like Target). Some, like Capital One, now report with every payment as well as when the statement closes. They're all different, so learn your reporting dates before you go maxing out.

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High utilization in the past would have lowered your score at the time. But like they always tell us, your credit score is a "snapshot" of your credit picture at the moment you purchase it. It's not really a cumulative thing.

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High utilization in the past would have lowered your score at the time. But like they always tell us, your credit score is a "snapshot" of your credit picture at the moment you purchase it. It's not really a cumulative thing.

So carrying a balance from month to month hurts you while you do it, but when it is paid off the damage fully goes away? Did I understand this correctly? I wonder then why do they even list your highest balance on credit reports.

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They don't always list your highest balance. But although that might interest someone doing a manual review, it doesn't impact your score EXCEPT where cards like Capital One are concerned, as high balance is used as a proxy for the credit limit (BAD NEWS).

And yes, your score can literally leap when your utilization sharply decreases.

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