Understanding the complexities of credit card utilization!™

[Anonymous]

My understanding is Credit utilization and On time payments are two of the highest deciding factors on calculating a FICO score.

[wacdenney]

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@mongstradamus wrote:

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@Closingracer99 wrote:

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@wacdenney wrote:

FICO scores do not have a memory.  It is a snapshot of your situation on that day.  Utilization doesn't matter until you are ready to apply for more credit.  Charge less than your limit and try to pay in full every month and you're fine.  A couple of months before you intend to apply for more credit you need to start worrying about what's reporting how much balance.

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Showing higher then 30% can hurt it though ... I posted 50% and got that dip 

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it should have only gone down that month? once you get your util back to 30ish score should have recovered at least that is what it did for me. I thought my amex te was reporting utilization, but 08 scores don't take into account au accounts. So i got an dip of about 30, when i had bcp reporting next month my score jumped back up to where it is now.

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Yes exactly...  Yes, your score will dip which doesn't matter to a person with a 200 CL that should be gardening anyway.

It's a snapshot of what things look like that day at that moment.  It doesn't matter if it dips up and down for 6 months as long as you maximize right before your next spree.

[mongstradamus]

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@Anonymous wrote:

My understanding is Credit utilization and On time payments are two of the highest deciding factors on calculating a FICO score.

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they are but fico scores don't have history so your utilization technically could be all over the place. I think it just matters when you are ready to apply for something, since it has no real record or history of your utilization. Some people like to always keep it low. I fall in that category, but others only care about having low util for when they will pull score or are looking for an loan or cc. 

[Closingracer99]

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@mongstradamus wrote:

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@Closingracer99 wrote:

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@wacdenney wrote:

FICO scores do not have a memory.  It is a snapshot of your situation on that day.  Utilization doesn't matter until you are ready to apply for more credit.  Charge less than your limit and try to pay in full every month and you're fine.  A couple of months before you intend to apply for more credit you need to start worrying about what's reporting how much balance.

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Showing higher then 30% can hurt it though ... I posted 50% and got that dip 

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it should have only gone down that month? once you get your util back to 30ish score should have recovered at least that is what it did for me. I thought my amex te was reporting utilization, but 08 scores don't take into account au accounts. So i got an dip of about 30, when i had bcp reporting next month my score jumped back up to where it is now.

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My TU went from around 730 before that and Now has gotten back up to 725 

[wacdenney]

I totally understand wanting to keep your score as high as possible all the time and not liking to see those dips, but it is a marathon rather than a race when you are in the OP's position.  IMO he needs to concentrate on running money through the card and PIF for an extended period of time.  He can then report < 10% for a month or two when he's ready to apply for something else down the road.

Just my opinion.  YMMV...

[wacdenney]

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@Closingracer99 wrote:

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@mongstradamus wrote:

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@Closingracer99 wrote:

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@wacdenney wrote:

FICO scores do not have a memory.  It is a snapshot of your situation on that day.  Utilization doesn't matter until you are ready to apply for more credit.  Charge less than your limit and try to pay in full every month and you're fine.  A couple of months before you intend to apply for more credit you need to start worrying about what's reporting how much balance.

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Showing higher then 30% can hurt it though ... I posted 50% and got that dip 

---

it should have only gone down that month? once you get your util back to 30ish score should have recovered at least that is what it did for me. I thought my amex te was reporting utilization, but 08 scores don't take into account au accounts. So i got an dip of about 30, when i had bcp reporting next month my score jumped back up to where it is now.

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My TU went from around 730 before that and Now has gotten back up to 725 

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Right, but before you had less INQs and better AAoA without 5 brand new Chase cards.  Your picture today looks different than it did before.  You should eventually recover and exceed 730 in say 6 months or whatever when you are ready for your next app spree.

[Anonymous]

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@Anonymous wrote:

Waz up everybody,been a lurker for awhile and decided to come out of my shell! I applied for a Capital One secured card with a 200 dollar credit limit. My understanding is that I want to shoot for a 1-9% utilization rate,9% of 200 should be around 18 dollars of spending per month.So if my bill statement is around the 8th of every month,should i spend the $18 early in the monthly cycle and pay it out in full before my statement due date? Is this essential way credit utilization is addressed,any and all positive advice would be highly appreciated,Thanks.

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Glad to have found this post, it is certainly in line with my post: http://ficoforums.myfico.com/t5/Credit-Cards/Utilization-Question/td-p/3319644

After a few replies, I had to reach further outside for a better understanding... With your situation, the answer would be no! You really don't need to limit yourself to a single $18 charge to have a desired util% to report... You're more than welcome to read on from the link provided... Good Luck & Thank You!!! 

[Anonymous]

So if I pay things off lets say in 6 months, my score still wont be punished for carrying balances for a while before that? If so thats good to know.