No Recent Bankcard Balances |
By Kenneth Long on August 9, 2010
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Maybe you thought your credit was pretty good. You followed the rules by paying off your balances and even kept those cards open so that they would continue to age. Yet, if you have not used your major credit cards, they tend to provide less of a benefit. This is likely the case if your credit report is flagged with the "no recent bankcard balances" risk code.
If this is the worst aspect of your credit report, then you should consider yourself to be in pretty good shape. It means that you do not rely heavily on revolving credit.
If you do use revolving credit a fair amount, but restrict it to mostly store card accounts, then you could still see this risk factor. Credit bureaus have separate risk reasons for no recent revolving balances and no recent bankcard balances. Therefore, if you aren't using any revolving credit, you could get tagged with both labels.
This just might be one of the easiest risk codes to erase. All you have to do is use your major credit cards periodically to show some use. Contrary to the advice of some loan officers, you do not have to carry a balance to erase this code. You simply have to have used the card at some point within the past 4-6 months.
It does not take a big purchase either. You probably should not buy something just for the benefit of keeping your card active. Instead, use the card for something that you would buy anyways and then promptly pay off the balance.
It can take up to a month for your activity to report to the credit bureaus. For this reason, it is important to make sure that you make the charges and then pay the accounts off at least 2 months prior to planning a major credit purchase. Depending on when your next billing cycle ends, it could delay the reporting of your balance information to the credit bureaus.
Even if the balance is reported, it is possible that your payment may not be reported until the following month. This can occur if your payment is posted after the close of that billing cycle. While this is not a serious problem, you will likely want for your credit report to show that you have paid off the balance prior to qualifying for a major loan or credit account. For minor charges, this is irrelevant. For larger purchases on credit though, it could temporarily raise your credit utilization rate until the balance is repaid.
Join the Discussion at the Credit Forum: Should you close unused credit card accounts?
No recent bank/national revolving balances is credit bureau risk score reason 29 with TransUnion and Experian. This factor is ignored by Equifax. Code G3 is used on NextGen scoring products. For more information on credit scoring, see the complete list of credit score factors.
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