Reporting CC Balances

[Hevj1119]

Talk to me about how revolving account balances affect score...

Here's my scenario - needed major car repairs to the tune of splitting the cost between two cards, driving one up to 80% util and the other up to 73% three days before the statement closing dates.  Yuck!  These cards usually report a balance of between 6 and 15%.  

We immediately made a small payment bringing one down to 60% and tomorrow will be able to pay one either completely down or both to the less-than-50% range before the statements close.  If absolutely necessary, we can draw the money out of savings and pay them off entirely but we'd rather not do that.  

In order to determine our best choice of action, I'd like to get an idea of how reporting balances / utilization affects score.

Do the reported balance affect your score at the moment or an average over time?  

If you have a card with a $10,000 balance, and 11 months out of the year <1k reported on average and then at Christmas-time you let 5K report, would your score take a dip?  Would it then return to "normal" in January when you resumed a <1k balance average?  What if you let 9K report?  Will the scoring models forever hold it against you that you hit 90% util once?  What if your CLI increases to 20K, are you back in the "never gone over 50% boat" or will your score still be factoring a "maxed out card once"?  

Really would like to get a handle on this..  TIA!

[Gunnar419]

Utilization has no memory. For scoring purposes, all that counts is what your util is when the statement cuts (or any other day that your card might report to the CRs).

Your credit card company might look at long-term trends in your util, but FICO won't.

[Hevj1119]

Thank you for your response!

After the spending the morning reading through posts on this part of the fico forums I realize the algorithm theories make my head spin and I don't have the first clue on how to play the credit game.  LOL.  I will stress less though about this specific hit that my util may take this month since I'm not going to be looking for new lines of credit anytime soon

Thanks!

[vpae]

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@Hevj1119 wrote:

Thank you for your response!

After the spending the morning reading through posts on this part of the fico forums I realize the algorithm theories make my head spin and I don't have the first clue on how to play the credit game.  LOL.  I will stress less though about this specific hit that my util may take this month since I'm not going to be looking for new lines of credit anytime soon

Thanks!

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This! +1

Basically, if you're not planning on applying for anything or pending any approvals, letting our scores dip a bit is not going to be anything major. Once you pay it down, your scores will go back up. As each month goes on, your cards History and AAoA will increase and your scores will benefit from that also.

Sometimes this is what credit cards are for, to help you out of a bind. So it's okay to carry a balance, just don't sit on it for too long and make only the minimum payment because of course, you will start paying interest and your credit card companies won't like that and may eventually take AA.

Sounds like you've got a plan, good luck!