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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?
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%?
"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.
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
@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.
@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.