@gh17 wrote:
I have always understood that it's best to leave some of your balance on the credit card until the statement comes out, but to leave this under 10%. I usually pay my credit cards off via online transfers a few times per month but leave some on until the statement comes before I pay that off.
Until very recently, my main credit card only had $1000 limit, and I would always keep somewhere from $20 to $90 to pay after the statement came. On Credit Karma, I had an A grade in the credit card utilization category.
Recently I was approved for another credit card, and this one has a $4000 limit. I am a student with only a part time job for income, so I can't afford to go anywhere near that limit. I typically charge only $150 to $400 a month, but occasionally (like last month) my balance was only around $30. Now when I updated Credit Karma, it has given me a C in credit card utilization, saying it's 0%. It's not that everything has a zero balance but rather that I guess it was rounding to 0% since I didn't spend much. My question is, in a real credit score, would my score be somewhat negatively affected by having less than 1% (but greater than 0) credit card utilization?
It's not really a big deal, but I'm just curious for future reference.
@kjm79 wrote:
Ignore the Credit Karma score and grade.
Most members of the board here will tell you to leave anywhere from 1%-9% on ONLY ONE card and any others to zero. And then play within the 1%-9% to find what % gives you the best score. How much you charge on the card, or your spending habits don't effect your score, only what's actually reported to the CRA's. . People have posted having 0% UTIL does bring their score down. Reason being you're not actively using credit.
Hi gh17,
Welcome - glad you're posting here!
First, I just wanna comment on credit karma's scores and grades.
I have a BK on my report, and credit karma gave me a B on my credit history because 71% of their users have more than one derogatory. I laughed out loud on that one - and on several other of their report card grades.
I also had utilization above 0% but under 1% and it also gave me a C. Totally off and in no way correlates with FICO scoring.
Ignore the FAKO scores and the FAKO advice on credit karma. And ignore the pretty charts with the useless and inaccurate information.
When you can, pull a FICO score from this site so you know your real FICO score (the one lenders use). The report also tells you what is helping your FICO score, what is hurting your FICO score, and what your best steps going forward are.
FICO rounds utilization up (credit karma doesn't, obviously, just one of about twenty bazillion differences).
So in the real FICO world, anything over 0% and under 1% would be rounded up to 1%. That's a good place to be. And remember FICO cares about how many accounts are carrying a balance, so most folks do best with only one revolving account reporting a balance. YMMV, and you can experiment, but it's good to start with one account and see where you can go from there.
