HELP CC's GURU

[Anonymous]

I just got my answer for a recent post I made, but raised more questions. So I'm posting this to hopefully have peace of mind. 

I have 4 cc's, two of them are student cards with a limit of $500. One of them I don't use at all, I haven't closed them cause they are my oldest cc lines. The other two, I recently opened them with a limit of $11,00 and $13,000. Since the latter are new lines, they are not reporting like 2 months after opening, and this screw my credit score (786 to 730, and still waiting the other hit). Thus, this month I paid the balance of the student card and all cc's reported a 0% utilization, which caused the huge drop. My question is, is there a rule of how many cards I can have reporting 0 balance and how many I need to report a balance? For example, out of 4 cards, 2 reporting a 0 balance should not impact your credit score or make sure that only one reports a 0 balance, etc.

My other question is kinda of confusing at least for me. I've read many articles saying that paying in full the card is the best way to go, but what about the utilization ratio, that means is at zero, this will cause a score drop. So, I'm confused on paying in full vs having a small balance (<10%), what is best? 

[jamie123]

Now, there is some wiggle room to this depending on your exact report details, but this is what you need to do to get your scores as high as they can get:

One CC reports a balance of less than 10% of its CL and all other CCs report $0. To be able to do this you might have to pay your reporting card twice a month. Make a payment 2 or 3 days before the due date to get the reporting balance to where you want it, let it report, then PIF after the due date.

You only need to do this if you want to find out how high you can get your scores or if you plan on applying for new credit in the next month.

You can and should use all your credit cards at least every couple of months to keep them active. Lenders will close accounts if they are not used enough.

If you don't need to keep your scores high, just use all your cards every month and pay them in full after the due date. This will build a strong relationship with your lenders and help to get CLIs.

[Anonymous]

I posted this on the wrong thread so I'm copying it here...

"I've been doing a little searching to understand the whole reporting balance to the CB. So far this is what I understand (correct me if I'm wrong). 

Best approach to boost CS is to:

1. Pay all cards in full except one

2. Play with 1-10% balance on that one card with balance (see what % gives a better boost)

3. Pay 2 times a month. One, before billing cycle ends so a low utilization ratio is reported (1-10%) and again before due date to avoid paying interest.

For example, in my case, my open date is the 8/24/15 and close date is 9/15/15 so if I'm using 45% of line credit, but I don't want my credit score getting hit by using more than 30% of my CL I should pay $X.XX BEFORE (3-5 days?) the CLOSING DATE and drop the utilization rate to <10%. This will result in a <10% utilization rate being reported to the CB instead of 45%. Then I should pay the remaining balance in full so I don't have to pay any interest. Repeat strategy. 

Is this correct? I need to recover from this drop. Any other recommendations?"

Replying to your comment: Now, I'm confused... pay after due date? that's a late payment

[Anonymous]

does it matter which one i leave with a balance? let's say old CL vs new CL?

[jamie123]

I think you are misunderstanding me...

The way to pay the REPORTING card is like this:

1. At least 3 days BEFORE the due date, make a payment to get the reporting balance where you want it at less than 10%.

2. Let the card report the small balance.

3. Pay the card in full AFTER the due date and take it to $0.

You want to pay all the other cards to $0 at least 2 to 3 days BEFORE the due date so they report a balance of $0.

[jamie123]

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@Anonymous wrote:

does it matter which one i leave with a balance? let's say old CL vs new CL?

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It really doesn't matter, but if you are doing this for the long term, it would be better to rotate which card is the reporting card every few months.

[Anonymous]

ok.... you are assuming that the balance of the CC is reported at the due date. I read it was at the end of the billing cycle (close date).

[Anonymous]

I'm confused with the cut date.... I've been reading and I'm getting different answers, some say the cut of date is a few days (2-3) after the due date and others say its at the end of the billing cycle (close date). So, can someone clarify this to me....Just in case it helps the accounts I have are with Chase

[jamie123]

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@Anonymous wrote:

I'm confused with the cut date.... I've been reading and I'm getting different answers, some say the cut of date is a few days (2-3) after the due date and others say its at the end of the billing cycle (close date). So, can someone clarify this to me....Just in case it helps the accounts I have are with Chase

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Okay, listen up...

You really don't want your Chase cards to be your reporting cards. If you pay your Chase accounts to $0 at any time during the month, they will report that $0 balance to the CRAs. Whenever the balance reaches $0, Chase will report it as $0. It has its good and bads. If you want to use it as your reporting card, you can't take the balance to $0.

I hate when everybody uses these slang terms for dates. It's also confusing to me.

The cut date refers to the date a new statement is generated. The cut date is usually 2 to 5 days after the due date. The balance on the account on the cut date is the balance that MIGHT be reported to the CRAs. So if you use your credit card after the due date but before the cut date (And the charge clears during that time.) the actual account balance on that date MAY be reported to the CRAs. It could mess up the balance that you thought would be the reporting balance on that card.

The most important thing that you need to do is set up auto payments for the minimum monthly payment. This way if you forget to make a payment at least the minimum payment will be made and you won't have to deal with repercussions.

[Anonymous]

Why is not a good idea to let the Chase card be the reporting card?