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Valued Contributor
Duncanrr
Posts: 2,843
Registered: ‎06-08-2012
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Does daily utilization rates matter?

Ok, I know that I need to submit payment to card 3-5 days before my billing date and pay off all or most of it to keep utilization to under 9% The question I have is this, say that I place charges on the card throughout the month and by the time I pay off the balance 3-5 days before the billing date, I'm carrying a 60% utilization.  As long as I'm not making any credit inquiries at the time does this high utilization matter?  Will it matter when CC companies do a soft pull for CLI?

 

Thanks,

 

 

Duncan



Starting Score: EQ 551 TU 548 CK 607on 6/8/12, EX 542(AMEX pull 3/4/12)
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Regular Contributor
sunshine7157
Posts: 137
Registered: ‎11-11-2011
0

Re: Does daily utilization rates matter?


Duncanrr wrote:

Ok, I know that I need to submit payment to card 3-5 days before my billing date and pay off all or most of it to keep utilization to under 9% The question I have is this, say that I place charges on the card throughout the month and by the time I pay off the balance 3-5 days before the billing date, I'm carrying a 60% utilization.  As long as I'm not making any credit inquiries at the time does this high utilization matter?  Will it matter when CC companies do a soft pull for CLI?

 

Thanks,

 

 

Duncan


Usage during the month does not matter, unless.... When cc companies do a SP they see only what was reported to the credit bureaus, so as long as your util was low at the time of reporting you'd be good to go. If however you ask (AMEX for example) for a CLI & you currently have a big balance on any of your AMEX credit cards, they would obviously be able to see that mid-cycle. Alot of cc companies search their own current internal records as well as doing a SP to check out your other accounts.


Starting Score: April 2011- EX FAKO 639, EQ FAKO 645, TU98 FICO 665
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RobertEG
Posts: 17,701
Registered: ‎03-19-2007
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Re: Does daily utilization rates matter?

I would imagine that would only work to your favor.

They love to see consumers use their cards, even if PIF each month, as they also get a cut from the creditor for each usage.

 

Seeing 60% util prior to paying, and then keeping the balance low, thus reducing your future risk, would most likely be a pattern that would make you a more desirable customer, and thus incentive to up your CL so that, if you continue that pattern, your risk stays low and their pockets get fuller.

Moderator
Revelate
Posts: 9,477
Registered: ‎12-30-2011
0

Re: Does daily utilization rates matter?


RobertEG wrote:

I would imagine that would only work to your favor.

They love to see consumers use their cards, even if PIF each month, as they also get a cut from the creditor for each usage.

 

Seeing 60% util prior to paying, and then keeping the balance low, thus reducing your future risk, would most likely be a pattern that would make you a more desirable customer, and thus incentive to up your CL so that, if you continue that pattern, your risk stays low and their pockets get fuller.


This is hugely important for future approvals in terms of looking like a profitable customer, and seems to be missed by a lot of folks.  Much credit to Robert for posting it.

 

The underwriting departments will still see how much you paid during each month, so they can see what your aggregate spend is... and they like customers swiping their cards.  As for SP's and other inquiries, the balances only generally get reported once a month with few exceptions of lenders who will occasionally update more often than that.  As a result, a SP is no different than a HP at that same time when they perform it, they'll see what the balance was when the lender reported last it on the tradeline... and that's what counts for FICO scoring at any rate.  

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Valued Member
waitingfor700plus
Posts: 36
Registered: ‎06-07-2012
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Re: Does daily utilization rates matter?

I have heard from many people that being under 30% each month is just as good as a lower percent?

Regular Contributor
sunshine7157
Posts: 137
Registered: ‎11-11-2011
0

Re: Does daily utilization rates matter?


waitingfor700plus wrote:

I have heard from many people that being under 30% each month is just as good as a lower percent?



Maybe that depends on what scoring bucket you're in? I've played around with my utilization enough now to know that I gain a couple points when my util is at 4% and I lose them when it reports at 6%, all other things being equal. I think there are different rules & micro-variables dependant upon your position within your bucket.


Starting Score: April 2011- EX FAKO 639, EQ FAKO 645, TU98 FICO 665
Current Score: Jan 2013- EQ FICO 746, EX FICO is the best kept secret in the world, I guess, TU FICO ???, Vantage 790
Goal Score: 760 by years' end. I didn't make the 760 club in 2013 but I'm pounding down the door in 2014.


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