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Utilization Reports

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Anonymous
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Utilization Reports

Hi. I'm trying to keep my utilization below 30% when reported, but I'm confused on spending above 30% of my limit without it getting reported.

 

Example.

 

Statement is on the 2nd of each month. I spend 30% of my limit on the 1st and my statement due on the 2nd is 30% of my limit. They report to the credit bureaus on the 3rd. I don't spend anything on the credit card until the 10th and max out my credit line that day. I pay it down to below 30% on the 20th. I don't spend anything until my next statement and the next statement shows that I owe below 30% of my credit line.

 

Do the credit bureaus know that I spent up to my credit limit or do they only know that my utilization when reported was below 30%? Does it matter if I max out my credit card and pay it off before the billing cycle? 

Message 1 of 15
14 REPLIES 14
Anonymous
Not applicable

Re: Utilization Reports

Some lenders report to the highest usage field but it isn’t part of fico scoring.

Just let it report less than 28.9% and you’re good to go.
Message 2 of 15
Anonymous
Not applicable

Re: Utilization Reports

That's what I thought, but I wanted to make sure. I've only had credit for a month and a half and definitely want to do everything I can to have it go up as fast as possible while also being able to use my credit limit if I need it.

 

Why below


@Anonymous wrote:
Some lenders report to the highest usage field but it isn’t part of fico scoring.

Just let it report less than 28.9% and you’re good to go.


28.9%?

Message 3 of 15
Anonymous
Not applicable

Re: Utilization Reports

Breakpoints are never at x0% but at x9% but fico rounds up.

So aim for 28.9% instead of 30%.

Also see my 11 rules link in signature!
Message 4 of 15
HeavenOhio
Senior Contributor

Re: Utilization Reports

"Below 30%" means 29% or below. And 29.0000001% rounds up to 30%. That makes 28.9% or below a "safe" number.

 

While 28.9% is a scoring threshold and considered responsible borrowing, 8.9% optimizes one's score. You don't have to go for 8.9% all the time, but it's something to do if you have an application for important credit coming up and you want to eek out some extra points.

Message 5 of 15
Anonymous
Not applicable

Re: Utilization Reports

Recent small data point for me was going from 12% to 0% lost me around 12 points and going to 8% brought back almost 26! Pretty serious difference on my profile from 12% to 8% and surprised me.
Message 6 of 15
jc2
Regular Contributor

Re: Utilization Reports

Something else to remember is that only the 'settled' spend amount will report on the statment date. i.e...often, if you spend on the card a day or two prior, and charges are still pending at of close ofstatment, they will not be reflected on the balance that is reported. This also works on payments made to the account and each bank can (and often does) reflect payments in the balance on different time frames/delays. For example, (in my case) Cap One alsways reflects my payments as a deduction the the balance owed the next day after I make the payment. Some of my other cards can take 2-5 days. This is just something to keep in mind if you are planning to manage your reporting balances.

All the Best Smiley Happy

Message 7 of 15
Anonymous
Not applicable

Re: Utilization Reports


@Anonymous wrote:
Breakpoints are never at x0% but at x9% but fico rounds up.

So aim for 28.9% instead of 30%.

Also see my 11 rules link in signature!

I see, so it doesn't round up to 30%. It's also nice to see that I made the right decision, at least according to you, with how I started out with my credit cards. I have Discover IT Secured, C1 Platinum, and a Khols store card. In six months I should have a good credit card upgrade path on both of the non-store cards.

Message 8 of 15
Anonymous
Not applicable

Re: Utilization Reports


@HeavenOhio wrote:

"Below 30%" means 29% or below. And 29.0000001% rounds up to 30%. That makes 28.9% or below a "safe" number.

 

While 28.9% is a scoring threshold and considered responsible borrowing, 8.9% optimizes one's score. You don't have to go for 8.9% all the time, but it's something to do if you have an application for important credit coming up and you want to eek out some extra points.


So effective 9% utilization is better than 0% or anything higher up to 29%? If so I'll definitely aim for 8-8.9% utilization on at least one of my cards. 

Message 9 of 15
Anonymous
Not applicable

Re: Utilization Reports

The rules on utilization follow two paths: aggregate utilization (meaning total of all balances divided by total of all credit limits) and individual utilization per card.

If you have an aggregate under 8.9% but above 0% you get the most FICO points for aggregate utilization.

For individual utilization, under 8.9% is better than high amounts. Also the third villain here is how many cards carry a balance of any kind. Maximum FICO points are granted for 1 card (not 0) carrying a small balance but multiple cards carrying a balance of even $5 each can ding you (each bureau dings at a different percentage of cards with a balance).

So your maximum FICO for utilization is one card with a balance of $3 up to 8.9% of your limit and the others reporting $0.

If you do carry a balance, keep that card under 38.9% and aggregate across all cards under 8.9% which helps but not as much as the AZEO Method does.
Message 10 of 15
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