Make us your home page
Instagram

Another reason not to carry a credit card balance

As if you really need it, here's another reason not to carry a balance on your credit card.

Credit bureaus have started using "time series payment data" — basically a record of your payments in the past several years — that potentially could raise a red flag with lenders.

"Traditionally, credit card accounts on credit reports have contained balance information only as recent as your prior month's statement," said John Ulzheimer, a credit expert.

"The addition of time series payment data to credit reports now allows for the reporting of your balances, the amount due on your credit card accounts and, most important, the amount you actually paid," he said.

That means that if you can't pay your full monthly balance, you should pay as much over the minimum payment as you can. Paying just the minimum makes you look riskier from a lender's perspective.

So how much over the minimum payment should you pay?

"There's no tipping point," said Ezra Becker, vice president of research and consulting for TransUnion's Financial Services Business Unit. "For every multiple you pay over the minimum due, the less risky you are, up to the point where you are the least risky and you're paying in full every month."

Expect time series payment data to be increasingly influential.

"This information is so relatively new that credit scores have not yet been built to incorporate that information," Becker said. "We are now just coming out with credit scores that do incorporate the information, and we find that they have massive predictive power improvements over traditional credit scores."

Bottom line for consumers?

The assumption that "as long as I make my payments on time, I have good credit" is no longer accurate, Ulzheimer said.

Another reason not to carry a credit card balance 05/17/14 [Last modified: Sunday, May 18, 2014 7:20pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Higher Social Security payouts help Florida post a big jump in personal income

    Personal Finance

    Personal income grew 1.3 percent in Florida in the first quarter of this year, a four-way tie among all states for second-fastest growth behind Idaho.

  2. U.S. Rep. Charlie Crist and estranged wife Carole put Beach Drive condo on the market

    Real Estate

    ST. PETERSBURG — U.S. Rep. Charlie Crist and his estranged wife, Carole, have put their Beach Drive condo on the market for $1.5 million.

    U.S. Rep. Charlie Crist and his estranged wife, Carole, have put their Beach Drive condo in Parkshore Plaza on the market for $1.5 million. {Courtesy of Amy Lamb/Native House Photography]
  3. Trigaux: Task now is for Water Street Tampa to build an identity

    Business

    Adios, VinikVille! Hello Water Street Tampa.

    An aerial rendering of the $3 billion redevelopment project that Jeff Vinik and Strategic Property Partners plan on 50-plus acres around Amalie Arena.
[Rendering courtesy of Strategic Property Partners]
  4. Unlicensed contractor accused of faking death triggers policy change at Pinellas licensing board

    Local Government

    The unlicensed contractor accused of faking his death to avoid angry homeowners has triggered an immediate change in policy at the Pinellas County Construction Licensing Board.

    Last year Glenn and Judith Holland said they paid a contractor thousands of dollars to renovate their future retirement home in Seminole. But when they tried to move in on Dec. 14, they said the home was in shambles and uninhabitable. They sent a text message to contractor Marc Anthony Perez at 12:36 p.m. looking for answers. Fourteen minutes later, they got back this text: "This is Marc's daughter, dad passed away on the 7th of December in a car accident. Sorry." Turns out Perez was still alive. Now the Hollands are suing him in Pinellas-Pasco circuit court. [LARA CERRI   |   Times]
  5. SeaWorld shares drop Monday to 2017 low after disclosure of federal subpoena

    Tourism

    The Orlando parent company of SeaWorld and Busch Gardens theme parks saw its stock drop 3.5 percent Monday to $15.10, its lowest price of this year.

    Killer whales perform at Shamu Stadium at SeaWorld in Orlando in 2011, before public pressure was placed on the theme park company to curtail its orca shows.SeaWorld has since announced an end to the traditional killer whale entertainment  at its theme parks. [AP Photo/Phelan M. Ebenhack]