Originally Posted by
MDtR-Chicago
This makes common sense but I've never seen a definitive reference that shows how much impact this really has on a FICO score. It would be great if you could share something to read up more on this particular issue.
"High Balance" has no effect on FICO score. A while ago forum user
RewardTraveler posted an official source that list factors. Previously discussed in this
post
High balance to credit limit ratio
may matter during manual reviews as they can catch it if it happened within the last 2 years. Getting a CLI can offset that one bad spot in the credit report even though it doesn't have any effect on FICO score.
Ye another example
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April 2012, You had CL = $5000 on a card. Say High Balance was $4000 by this time. Risky behavior since it shows you used 80% utilization at some point in the past.
May, June July you have been paying off diligently before statement cuts so that balance reported has been $0 for the last 3 months. But remember High Balance field is still $4000, so your max utilization on this card historically still = 80%
August you got a Credit Limit increase on this to $10,000. You still pay off balances before statement cuts but now it looks like historical max utilization = 40%. (4000/10000)