Credit Utilization Calculation

[Anonymous]

I do not carry a month-to-month balance, but I use up to 15% of my credit on a monthly basis. Will I improve my FICO score by paying off my credit card right before applying for a mortgage? That is, is credit utilization calculated based on a snapshot of your credit accounts on the date of the credit check or as an average usage over time?

[Booner72]

Snapshot.  Usually the amount listed on the statement is what gets sent to the CRA's.  I bet if you get below 9%, from what I have read, that you will get pointage.  I'm shooting for that myself!  Good Luck.  (Don't report zero though, at least 1 percent).

[haulingthescoreup]

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@Anonymous wrote:

I do not carry a month-to-month balance, but I use up to 15% of my credit on a monthly basis. Will I improve my FICO score by paying off my credit card right before applying for a mortgage? That is, is credit utilization calculated based on a snapshot of your credit accounts on the date of the credit check or as an average usage over time?

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Yes, pay off all but one card before they report (statement date in almost all cases; major exceptions being HSBC/ Orchard bank cards and USBank cards, including store cards.)

Let the one card report twenty bucks or so, and then pay it off before the due date.

This will optimize your reported util.