Credit Utilization Question

[Anonymous]

I'm working on credit utilizatoon. I have two secured ccs and I bust a gut to get the payments in before they report. That results in me gping online every time I use them and sending an immediate payment.

I'm stressing about constantly. I'm wondering why bother. If it reports every month then I'm thinking I should only worry about it the month I am wanting my credit score to gain those points. Is that correct? Or is there a cumulative effect of maintaining low utilization?

[Anonymous]

Assuming your credit limit is 500... and your due date is on the 6th of each month. with in your 500 limit it doesnt matter how much you use, it only matter how much you left in the balance before the statement cut off. say you charge and your balance is 300. I would paid 290 on the due date or leave 9% or less. your statment cut off would be around the 9th or 10th. and it will take abbout a week for lender to report to the CR.

[tomfromrictmame]

The only time utilization is relevant is when your TL reports.  You can use your card right up to the limit every month, and as long as you pay it to $0 before it posts, your utilization would be 0%

Also your CR doesn't have memory.  If you maintain 0% utilization for 6 months and on the 7th month the utilization jumps to 80%, you don't receive any "credit" for the 6 months at 0% utilization.

[Anonymous]

Aah! Thank you for that info. So conversely, if my credit utilization is at 80% for 6 months and it drops to 0% on the 7 month I get the full benefit with no accumulated damage from the prior 6 months. That's exactly what I was wondering.

Makes sense on large balances but with my two secured CCs with limits of $200 each I'm up and down with utilization %. Still going to maintain them as low as possible because it's nice to have the points on my score but now I know it really isn't that important until I've rebuilt my credit I can stop stressing out so much. Thanks!

[Anonymous]

I think you take a ding if you use more than a certain percentage of the individual credit card limit too, so becareful and might take a couple months to get the most out of the points possible from low utilization.

[Anonymous]

Thanks. So you're saying there IS a cumulative effect? Now I'm confused.

[0REDSOX7]

There is no cumulated effect.

What the other person was saying is utilization is calculated two ways. One at an individual card level and one calculating it with all available credit.

It's good advice to stop stressing over monthly trade line utilization until you know you want to apply for credit.

[Anonymous]

Ok. Thanks for clearing that up.

I'm being careful. Not charging more than I can pay off each month. Just stressing too much about billing cycles.

All this credit clean up takes a couple of hours out of each day at least. Even if it's just reading up on it. I want to prioritize what I worry about :-)