Do lenders look at the whole picture?

[Anonymous]

My discover will be up for consideration in 2 months for a unsecured card. I've been perfect payments and under 5% utilization since the start. My CLI is 1400. Now unfortunately next month I will have to rent a SUV for 3 weeks which will bring my usage to about 60% . Unavoidable. Now I will pay it in full before statement time. Question is. Are they going to hold the big usage against me? Or understand sometimes these things happen?

[Anonymous]

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@Anonymous wrote:
My discover will be up for consideration in 2 months for a unsecured card. I've been perfect payments and under 5% utilization since the start. My CLI is 1400. Now unfortunately next month I will have to rent a SUV for 3 weeks which will bring my usage to about 60% . Unavoidable. Now I will pay it in full before statement time. Question is. Are they going to hold the big usage against me? Or understand sometimes these things happen?

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No problem.  If anything it will look good that you used your card for a big purchase and yet kept the card reporting (i.e. before statement cut) a small balance. 

[SouthJamaica]

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@Anonymous wrote:
My discover will be up for consideration in 2 months for a unsecured card. I've been perfect payments and under 5% utilization since the start. My CLI is 1400. Now unfortunately next month I will have to rent a SUV for 3 weeks which will bring my usage to about 60% . Unavoidable. Now I will pay it in full before statement time. Question is. Are they going to hold the big usage against me? Or understand sometimes these things happen?

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It's an algorithm.

It doesn't understand that sometimes these things happen.

[Anonymous]

You call them algorithms . I call them Terminator. They can't be reasoned with they can't be bargained with. They don't feel stress or emotion and they won't stop till they rip your scores out of your heart. Lol. Back to what I trying to ask is. Are reps. Terminators or when it's time for my graduation to unsecured card. They won't hold it against me because I needed a rental car for 3 weeks. Or will the rep say aha ha we got him now. No unsecured carfd for you ???

[HeavenOhio]

I think you'll be fine. You're making a large charge, but it's not anywhere approaching your limit. And you're paying it off so your statement balance will be at an appropriate level.

It's convenient that this could happen mid-cycle. I'd be more concerned if the charge ended up having to be reported.

[Anonymous]

Great thank you

[Revelate]

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@SouthJamaica wrote:

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@Anonymous wrote:
My discover will be up for consideration in 2 months for a unsecured card. I've been perfect payments and under 5% utilization since the start. My CLI is 1400. Now unfortunately next month I will have to rent a SUV for 3 weeks which will bring my usage to about 60% . Unavoidable. Now I will pay it in full before statement time. Question is. Are they going to hold the big usage against me? Or understand sometimes these things happen?

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It's an algorithm.

It doesn't understand that sometimes these things happen.

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On the flipside the algorithm might see it as a good thing.

In general I think we worry about utilization from a lenders perspective too much: credit cards as an entire product class were designed for short term float; when I use them in that fashion I really don't worry about what my balances are day to day or even what's reported.

Much more concerning from a lenders perspective is seeing the balance run up but not being paid back, or the balance not being able to be paid out of income or assets, that's bad mojo, but what you're doing Camelot is simply a tasty mojito for them.

My thoughts anyway.

[Anonymous]

Lol thank you

[Anonymous]

I agree with what Rev is saying above.  Making strong use of a CL followed by a PIF is just about the best thing one can do for their card if they're looking to grow it.  One of the most common denial reasons we hear is "not enough use of current credit limit."  If you're using a large portion of your limit and paying it off, you're giving the creditor a fantastic reason to auto-CLI you, as it may give you greater incentive to spend even more in the future which of course makes them more money. 

[HeavenOhio]

I think you have a lot of leeway as long as your statement balances are paid in full and your statement balances are usually at 28.9% of the limit or lower. An occasional statement balance that's higher than 28.9% is likely to be OK too as long as it's paid off promptly.

My gut said that having higher utilization now and then on a low-limit card is to be expected. The total dollar amount isn't a huge risk for a company. It's the payment patterns that matter.