Credit Card Utilization -- How??!?!

[CourtneyJ723]

Ok I know this sounds stupid... but if I knew the answer I wouldn't be here, right??? 

SO... I understand that you're supposed to keep your credit cards within 11% utilization. Fine. But apparently I don't know what that means... how exactly does that work?

I ran into credit card trouble a few years ago, cancelled them and never looked back. Now I'm trying to rebuild credit after a foreclosure, job loss, and total credit disaster... and apparently all I can do is get secured cards. Which I've done. We now have 3 between the both of us (my husband and I), and I'm planning to piggy back on each other. 

But can someone please explain to me how utilization works? I don't want to carry a balance... the interest rates are pretty high. If I pay certain bills with the CC, how long do I wait before paying the CC off without getting wacked interest, but getting "credit" for "using the card"???

HELP!!!!!!!!!!!

[gdale6]

The best way to approach it for best FICO results are to pay off all your cards except 1 before the statement cuts. On the 1 that you will let report and then payoff after the statement cut you should let 1-9% of its CL report, you will need to massage the right number between those 2 to find out where the sweet spot is for you. If you are unable to pay off all prior to statement cut you will have approx 23 days after to pay it off without interest just be sure to check your statement for the actual due date.

[titanofold]

DON'T PANIC!

Don't overly stress about utilization just yet. Credit scores have no memory of utilizaiton. You don't have to maintain the optimal utilization at all times. What's really important is that you have a good payment history.

Take a look at the terms and conditions of your cards. They should have a section labelled "How to avoid paying interest". Usually you'll have a 25-day grace period to pay off a transaction before interest is applied.

To optimize your score, you'll want all but 1 card reporting a $0 balance. The remaining card you'll want to have report 1-9% utilization. You'll need to learn when the CCC report to the CRAs. Once you figure that out, you'll pay off all but one card a few business days before the reporting day, and the remain card you pay down to 1% - 9% of the CL. After that card is reported, PIF.

Optimizing your utilization takes diligence and organization.

[baller4life]

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@titanofold wrote:

DON'T PANIC!

Don't overly stress about utilization just yet. Credit scores have no memory of utilizaiton. You don't have to maintain the optimal utilization at all times. What's really important is that you have a good payment history.

Take a look at the terms and conditions of your cards. They should have a section labelled "How to avoid paying interest". Usually you'll have a 25-day grace period to pay off a transaction before interest is applied.

To optimize your score, you'll want all but 1 card reporting a $0 balance. The remaining card you'll want to have report 1-9% utilization. You'll need to learn when the CCC report to the CRAs. Once you figure that out, you'll pay off all but one card a few business days before the reporting day, and the remain card you pay down to 1% - 9% of the CL. After that card is reported, PIF.

Optimizing your utilization takes diligence and organization.

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+1