I check my credit report regularly. All my accounts receive "okays" every month as I pay at least the minimum by the due date. Some cards have gone over the limit due to interest. My report lists the month as "okay", the best grade possible. I am asking if the fact the account went over the limit at all negatively effects my credit score in any way?
The good news:
You're "paying as agreed," so nothing's being recorded as late. Late payments (of 30 days or more) stay on your report for seven years.
The bad news:
Your score is being hit (probably being hit hard) due to your high utilization. Using 90% of a card's limit is considered "maxed out," and it sends up fireworks. As you decrease your utilization, your score will improve.
But more than your score, I'd worry about lenders getting worried and doing things like decreasing your credit limits. You're avoiding the worst of it by not being late. But you should still be paying down your balances as fast as possible.
No, it will not hurt your credit score directly.
Indirectly, however, it could. Here's how. As the previously reply stated, a creditor can take adverse action (AA) if you have a maxed out account, especially if it's maxed out for several months or longer. If they do this, they could either slash your credit limit or even worse close your account. When this happens, the amount that your credit limit was reduced by OR the total credit limit in the event the account is closed down will reduce your aggregate (overall) credit limit, thus raising your aggregate utilization percentage which in turn could lower your credit score.
For example, you have three credit cards and these are their balances and limits:
#1: $500 balance on a $2000 limit
#2: $1000 balance on a $3500 limit
#3: $2000 balance on a $2000 limit
In this example, your total balances equal $3500 on $7500 in total limits, or 47% aggregate utilization. Naturally, card #3 is maxed out and is at 100% utilization. Let's say the creditor takes AA against you and lowers that limit to $500. Your total balances still equal $3500, but now your total credit limits are $6000 for an aggregate utilization of 58%. It's believed that 49% is a threshold point, so crossing from 47% aggregate utilization to 58% would have an adverse impact on your credit score.