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Credit Card utilization

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Anonymous
Not applicable

Credit Card utilization

I recently acquired a cap 1 platinum mc with a $300sl. I have charged $29.98 to it. It shows online that my minimum payment due will be calculated after 5/9 with a due date of 6/6. Is it recommended to pay the full balance before 5/9, or wait until right after? Is it recommended to leave a small balance each month or pif?

I'm looking to get the best scoring potential for the utilization category. 2 of the 3 cbs show I have $1000 cl (au) and 1 shows $0 cl. This account im an au on carries a zero balance ever month (unused). The cap1 has not appeared on my file yet.

Thanks!
Message 1 of 7
6 REPLIES 6
gdale6
Moderator Emeritus

Re: Credit Card utilization


@Anonymous wrote:
I recently acquired a cap 1 platinum mc with a $300sl. I have charged $29.98 to it. It shows online that my minimum payment due will be calculated after 5/9 with a due date of 6/6. Is it recommended to pay the full balance before 5/9, or wait until right after? Is it recommended to leave a small balance each month or pif?

I'm looking to get the best scoring potential for the utilization category. 2 of the 3 cbs show I have $1000 cl (au) and 1 shows $0 cl. This account im an au on carries a zero balance ever month (unused). The cap1 has not appeared on my file yet.

Thanks!

You want 1 card reporting no more than 10% of its CL to the CRA for max Fico, you will need to play with the actual percentage to find the sweet spot for you and it does change over time.

Message 2 of 7
Thomas_Thumb
Senior Contributor

Re: Credit Card utilization


@Anonymous wrote:
I recently acquired a cap 1 platinum mc with a $300sl. I have charged $29.98 to it. It shows online that my minimum payment due will be calculated after 5/9 with a due date of 6/6. Is it recommended to pay the full balance before 5/9, or wait until right after? Is it recommended to leave a small balance each month or pif?

I'm looking to get the best scoring potential for the utilization category. 2 of the 3 cbs show I have $1000 cl (au) and 1 shows $0 cl. This account im an au on carries a zero balance ever month (unused). The cap1 has not appeared on my file yet.

Thanks!

If this is your only card, you want it to report a small balance when the statement cuts. For optimum results the reported balance should be under 9% (or $27 in your case). Having it report a 0 balance could cost you 20 to 30 points relative to a small balance under $27. If you want some flexibility in payments, you could allow the card to report a higher balance up to 29% utilization of the CL ($87), without impacting score more than 10 points.

 

Key point: Utilization impact on score is only point in time. This means each time your credit report is pulled to generate a score, whatever your card(s) utilization(s) is/are at that instant in time is what matters. So, no need to optimize utilization in a given month unless you plan to apply for new credit. [note - as a general rule is aggregate revolving utilization under 30% is considered responsible use of credit by lenders]

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 3 of 7
Anonymous
Not applicable

Re: Credit Card utilization

Thanks for the information! It is my only card, but as i mentioned, i have an au credit card reporting at 2 of 3 cras. Those two show $1k available cl while the other shows $0.

If I understood correctly, i could pay it down to $25 before 5/9, then $25 reports, then pay it down to $0 before 6/6 to avoid any interest and to get the max score. Is that the right approach?
Message 4 of 7
Anonymous
Not applicable

Re: Credit Card utilization


@Anonymous wrote:
Thanks for the information! It is my only card, but as i mentioned, i have an au credit card reporting at 2 of 3 cras. Those two show $1k available cl while the other shows $0.

If I understood correctly, i could pay it down to $25 before 5/9, then $25 reports, then pay it down to $0 before 6/6 to avoid any interest and to get the max score. Is that the right approach?

Yes.  Totally right approach.  (Can you ask the card owner on which you are an AU to pay his card down to $0 and keep it reporting that way for a while?)

 

Bear in mind that the card you are having show a positive balance doesn't have to be just under $27.  It could report $5 and that would be fine too.  Some CC issuers don't credit your paydown immediately -- they might wait until the funds have arrived from your bank.  If your issuer is like that you might need to pay the card to the low amount 3-4 business days before the statement prints.

Message 5 of 7
Thomas_Thumb
Senior Contributor

Re: Credit Card utilization

Yes, you can do that.

 

Make an initial payment prior to the statement cut date to bring balance down so it reports under $27 and then pay in full (PIF) whatever reports by the due date to avoid interest charges.

 

 

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 6 of 7
Anonymous
Not applicable

Re: Credit Card utilization


@gdale6 wrote:



You want 1 card reporting no more than 10% of its CL to the CRA for max Fico, you will need to play with the actual percentage to find the sweet spot for you and it does change over time.


9%-10% would put the OP across the best threshold into the second best which would not maximize his FICO scores.  He wants to be at 8.99% or less.  I know it's only a small difference, but certainly worth noting here.

Message 7 of 7
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