Question about high balance on reports

[Lisa0825]

Does the high balance shown on a credit report indicate the highest the balance was that month or the level it was at when reported? Does this change every month, or can a high balance one month continue to affect you once you have paid it down?

I got my Orchard card in September, and with the $79 fee, and using it to get by during October when I had some difficulties, the balance got up to $259 out of $300. I paid it back down to $100. I plan to get it mostly paid off next month. The high balance just showed up yesterday, and my high score dropped by 30 points.

[breathing_easier]

The 'high balance' is reported as the highest balance ever on the card. Therefore, your $259 will continue to report each month as your high balance unless and until you have an even higher balance in a future month. It is a way for creditors (potential or current) to track your credit habits. There's no way of telling whether or not your highest balance recently having been reported is what caused your FICO score to dip. It could have been that coupled with other factors. Next month (or even tomorrow) you might find that your score goes up inexplicably. However, the most important thing is if you must carry a balance to keep your balance at 30% or lower of your limit. Also keep in mind that in time your credit limit on that card will most likely increase, which will widen the gap between the $259 high balance and your credit limit. Also try not to worry about month-to-month shifts in your FICO score. If you follow sound credit practices over time, your scores will follow.

[Lisa0825]

The 'high balance' is reported as the highest balance ever on the card. Therefore, your $259 will continue to report each month as your high balance unless and until you have an even higher balance in a future month. It is a way for creditors (potential or current) to track your credit habits. There's no way of telling whether or not your highest balance recently having been reported is what caused your FICO score to dip. It could have been that coupled with other factors. Next month (or even tomorrow) you might find that your score goes up inexplicably. However, the most important thing is if you must carry a balance to keep your balance at 30% or lower of your limit. Also keep in mind that in time your credit limit on that card will most likely increase, which will widen the gap between the $259 high balance and your credit limit. Also try not to worry about month-to-month shifts in your FICO score. If you follow sound credit practices over time, your scores will follow.

Thanks for the info!

I know I am in this for the long haul, but I will be looking at refinancing my house within a year, so I am watching the changes closely as I work on it.

I had read before that credit card companies like you better if you carry a balance, because otherwise they don't make much money off you. So I planned to carry a balance, but keep it low once I get it down there.

Thanks again for the reply

[breathing_easier]

While cc companies of course like you to carry a balance so that they can charge interest, that's really not in your best interest (pun intended). What you want to do is figure out when your cc company reports to the CRAs by reviewing your credit reports each day until you see when that cc's TL changes. As long as your payment due date is after the reporting date, which it almost always is, you then let the 30% or less (less than 10% is best) balance report and then pay the balance in full before the due date. Good for your FICO and good for you because you pay no interest.