Can someone explain the optimal credit scoring method I keep reading about? It seems numerous people say to pay in full all credit card accounts, but let one report with a balance below 10%. Then i get confused of the time periods to do this, am i supposed to just pay all my card balances once it gives me a due date, and balance? Some say let it report and then pay it off, I may be incorrect with that statement. And what is the method I hear about statement cutoffs, I am confused. Say my due date is the 6th of each month, and I get a statement the 9th or 10th. Should i pay in full all cards before the due date, and reduce one card balance below 10% paid and let that report? Thanks, I do not mean to confuse anyone by this, as I myself, am quite confused with the method. Or i may just be overthinking it, as i tend to do that alot. Thanks
Current (8/2015): Equifax 688, Transunion 689, Experian 708
Hi!
Well, first, the reporting under 10% utilization "rule" is just something that works for some people. Personally, my scores are highest when I let one card report under 10%, but it may differ for some people. You just have to experiment with it each month.
To answer you question about paying your balances, I'll give you an example:
My discover card statement closes on the April 19th, so to report the util I want, I will pay down my current balance on April 18th to whatever amount will make my balance/credit limit show below 10%. For example, if I currently owe $100 and my limit is $1000, I will pay $50 of my balance on April 18th to make my util show 5% by the time my statement closes on April 19th. Then I'll pay the remaining $50 balance some time after April 19th and before my due date.
If you have multiple cards with balances and different statement dates, it might take a few weeks to see the effects of bringing down your util. To go with my example above, say I have 2 other cards that have statement dates of April 1 and April 7. I would completely pay off those cards to $0 before the statement closes if my goal is to let only ONE card report a balance for the month of April.
I answered this question in the past, here: http://ficoforums.myfico.com/t5/General-Credit-Topics/How-do-I-play-the-1-9-Utilization-Game-Please-...
