Incredibly dumb question—can you not pay of CCs in full every month & still have a high credit score?

[Anonymous]

My parents told me they (combined) have about $4k in CC debt, and that they only make the minimum payments each month. My mom said they both have 790+ credit scores. How is this possible?

[Anonymous]

If they pay at least the min regularly and have a lot of credit in general (like $50k+) but only 4k of debt. The ratios are still in their favor.
I have 3 credit cards with $30k limit on each. I never spend that much tho.

[Anonymous]

Anonymous wrote:If they pay at least the min regularly and have a lot of credit in general (like $50k+) but only 4k of debt. The ratios are still in their favor.
I have 3 credit cards with $30k limit on each. I never spend that much tho.

This.

They're probably using less than 10% of their available credit.

I carry balances from time to time and my credit score is in the low 800s.
I never utilize more than 5% of my available credit across cards.

[Anonymous]

Anonymous wrote:My parents told me they (combined) have about $4k in CC debt, and that they only make the minimum payments each month. My mom said they both have 790+ credit scores. How is this possible?

As long as you pay at least the minimum on time, you are fine. Keeping a balance doesn't generally affect your score negatively.
It would only have a negative effect on your score if the balance you keep is so high that debt to credit ratio is 30% or above.

Paying your balance in full has no major effect on your score. Not being late and making at least the min. payment contribute more to your score.

Paying your balance in full is more about avoid paying cc interests.

[Anonymous]

Yes, both of us have credit scores over 800 (somewhere between 810 and 840 depending on the given month).

I carry a balance between $0-10K on my primary card each month. I pay the CC from my primary job. The majority of my extra money is in non-liquid sources, not easy to liquidate without penalties. My wife's salary goes into our combined emergency/special projects/vacation funds. Sometimes I don't remember to tell her that I'll need a transfer from her accounts to mine for monthly expenses. And then I'll carry a balance. I'll remember to tell her and she'll transfer the money to me before the following month and then I'll pay it off. Sometimes if we have a major expense, I'll carry the balance for a couple of months. I always pay off a portion, significantly higher than the minimum, so it doesn't affect our credit score. It's just a matter of paying the finance charges for the month.

[Anonymous]

I pay it off every month, no other debt except my mortgage.

My credit score is 800.

I think it's a combination of the age of the credit and how much of the credit you use.

[Anonymous]

My credit is high - consistently 840+ and often sits maxed out at 850. I pay in full every month but on occasion have had a need to carry a balance for a couple-few months. We have about 8 credit cards w/ 20-30k limits but hardly ever go above 10k a month and 3-6k would be more typical.

I also have a mortgage, 50k HELOC and 25k personal loan and have had car loans but not currently.

My credit score has been maxed or near maxed for years.

[Anonymous]

Anonymous wrote:If they pay at least the min regularly and have a lot of credit in general (like $50k+) but only 4k of debt. The ratios are still in their favor.
I have 3 credit cards with $30k limit on each. I never spend that much tho.

The whole system is silly and wrong. The fact someone can NOT pay in full each month and have a better credit score than someone who charges 50% of their limit and pays in full is a bit wrong.

Thankfully I don't need credit (beyond using cards to pay for stuff so I get perks and protections not offered with a debit card). But I often go over the 10-20% range. I have good limits, but some months $40K goes across the cards with plenty of cash on hand to pay it off. If I forget to go pay it immediately and wait for the "end of the month" my credit will take a ding.

But fact I (with 40x+ the amount of my credit limits in cash in accounts) have a lower credit score simply because I do this oh and I don't have any loans on record. No loans because we pay cash for everything in the last 10+ years

[Anonymous]

Anonymous wrote:

Anonymous wrote:If they pay at least the min regularly and have a lot of credit in general (like $50k+) but only 4k of debt. The ratios are still in their favor.
I have 3 credit cards with $30k limit on each. I never spend that much tho.

The whole system is silly and wrong. The fact someone can NOT pay in full each month and have a better credit score than someone who charges 50% of their limit and pays in full is a bit wrong.

Thankfully I don't need credit (beyond using cards to pay for stuff so I get perks and protections not offered with a debit card). But I often go over the 10-20% range. I have good limits, but some months $40K goes across the cards with plenty of cash on hand to pay it off. If I forget to go pay it immediately and wait for the "end of the month" my credit will take a ding.

But fact I (with 40x+ the amount of my credit limits in cash in accounts) have a lower credit score simply because I do this oh and I don't have any loans on record. No loans because we pay cash for everything in the last 10+ years

Credit Score isn't a measure of personal character. It's a measure of lending profitability.

Someone who overspends *but pays*, carries debt and pays absurdly 20%/yr interest is a much better (more profitable) lending target than someone who takes 0% loans every month.

[Anonymous]

Anonymous wrote:My parents told me they (combined) have about $4k in CC debt, and that they only make the minimum payments each month. My mom said they both have 790+ credit scores. How is this possible?

I think the credit score model is favoring people with debt. After I paid off my mortgage, my credit score dropped 20 points. Not that I care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If they pay at least the min regularly and have a lot of credit in general (like $50k+) but only 4k of debt. The ratios are still in their favor.
I have 3 credit cards with $30k limit on each. I never spend that much tho.

The whole system is silly and wrong. The fact someone can NOT pay in full each month and have a better credit score than someone who charges 50% of their limit and pays in full is a bit wrong.

Thankfully I don't need credit (beyond using cards to pay for stuff so I get perks and protections not offered with a debit card). But I often go over the 10-20% range. I have good limits, but some months $40K goes across the cards with plenty of cash on hand to pay it off. If I forget to go pay it immediately and wait for the "end of the month" my credit will take a ding.

But fact I (with 40x+ the amount of my credit limits in cash in accounts) have a lower credit score simply because I do this oh and I don't have any loans on record. No loans because we pay cash for everything in the last 10+ years

Credit Score isn't a measure of personal character. It's a measure of lending profitability.

Someone who overspends *but pays*, carries debt and pays absurdly 20%/yr interest is a much better (more profitable) lending target than someone who takes 0% loans every month.

This is the correct take on credit score. It is exploitative.

[Anonymous]

Read how credit scores are calculated. Nowhere does it say anything about paying minimum would keep it down somehow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If they pay at least the min regularly and have a lot of credit in general (like $50k+) but only 4k of debt. The ratios are still in their favor.
I have 3 credit cards with $30k limit on each. I never spend that much tho.

The whole system is silly and wrong. The fact someone can NOT pay in full each month and have a better credit score than someone who charges 50% of their limit and pays in full is a bit wrong.

Thankfully I don't need credit (beyond using cards to pay for stuff so I get perks and protections not offered with a debit card). But I often go over the 10-20% range. I have good limits, but some months $40K goes across the cards with plenty of cash on hand to pay it off. If I forget to go pay it immediately and wait for the "end of the month" my credit will take a ding.

But fact I (with 40x+ the amount of my credit limits in cash in accounts) have a lower credit score simply because I do this oh and I don't have any loans on record. No loans because we pay cash for everything in the last 10+ years

Credit Score isn't a measure of personal character. It's a measure of lending profitability.

Someone who overspends *but pays*, carries debt and pays absurdly 20%/yr interest is a much better (more profitable) lending target than someone who takes 0% loans every month.

Bingo. I’m floating $80k-$150k at any given time. But I always make the payments. Credit score is above 800.

The banks want borrowers like me. Not you squares who refuse to pay finance charges.

[Anonymous]

My neighbor I am friendly with is like that. I don’t understand why she carries debt. She is 67, has a job and she also took out her SS.
She has money in her bank account and she sends money to another country where her kids live. Yet she has about 6k in CC debt. She took out a consolidation loan, paid SOME of the debt and put the rest of it into her account. Why she is behaving this way is beyond me, but she has a great credit score.
Maybe she wants to die owing money since her heirs are out of the country anyway?