Scared to use my secured Capitol One card

[Anonymous]

Hi, long story short I was approved for an unsecured Capitol One card with a $300 limit and upon activation, the $39 activation fee was immediately taken from the available credit. So to keep my utilization under 10%, after activating, I immediately linked it to my checking account and made a $35 payment, leaving the balance at $4. I check my credit one week later and this TL hasn't showed up on my Transunion or Equifax yet, but on my Experian it's showing a $39 balance. I'm new to how credit works, but I was under the impression that creditors report the balance that's on the billing date to the credit bureau, correct? Or do they report the highest balance that was made that month, meaning if I used $200 of my available $300 limit one day, would $200 be the reported balance to the credit bureau that month, regardless if I paid the balance in full the same day I spent the $200?

[CH-7-Mission-Accomplished]

They normally do report the balance as of the statement date.  The first statement can be the exception.  Sometimes when they report the first time they open the account, add the annual fee, and report.  It should clear out by the second statement if you pay down before the statement cut date.

[Anonymous]

As C7R said, they just did that because they reported the new account. From here on out whatever balance you have on the closing date, will be what is reported. No reason to be scared to use it. The only purpose for keeping utilization under 10% is if you want your score maximized for the next month. Unless you are applying for some type of new credit within the next month, there is zero reason to worry about utilization.

[Anonymous]

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@Anonymous wrote:
As C7R said, they just did that because they reported the new account. From here on out whatever balance you have on the closing date, will be what is reported. No reason to be scared to use it. The only purpose for keeping utilization under 10% is if you want your score maximized for the next month. Unless you are applying for some type of new credit within the next month, there is zero reason to worry about utilization.

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Exactly what Johnny said. Don't sweat the utilization. Until you're ready to apply for CLIs or more credit in 6 months, just make sure you PIF every month and that you don't exceed your limit. 

[takeshi74]

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@Anonymous wrote:

I was under the impression that creditors report the balance that's on the billing date to the credit bureau, correct?

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Many but not all do.  US Bank, for example, reports on the last business day of the month.

As stated above, the balanced reported along with the new account's first report.  No need to fear.

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@Anonymous wrote:

Or do they report the highest balance that was made that month, meaning if I used $200 of my available $300 limit one day, would $200 be the reported balance to the credit bureau that month, regardless if I paid the balance in full the same day I spent the $200?

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They do both but the high balance is not the same thing as the reported balance.  The reported balance is used to determine revolving utilization.  High balance is not.

If you haven't looked at your own reports you should defintiely do so.  You should be reviewing all your reports on a regular basis to ensure accuracy and to prevent fraud.  You can use annualcreditreport.com once a year for each.  If you want to review more often there are CMS's that you can use including free ones such as Credit Karma (only for TU and EQ though).

[Anonymous]

Awesome, thanks for clearing up the confusion guys.