Utilization and Paying Statement Early

[Anonymous]

Hi All,

From what I've read in some articles, it is my understanding that If I use my credit card, and pay off some of the balance before my statement generates, that only the remaining balance is what is reported to the 3 bureaus. I'm going to buy plane and sports tickets, but combined with my regular monthly spending, it will take me over 30% of my utilization. I have a rewards card, so I want the points, but I don't want my utilization to spike. 

If I pay the two ticket charges off before the statement generates, will the reported balance be the remaining monthly expenditures? I am spending about $1000 on the tickets, and I typically total about $1000 per month on credit cards. My utilization will go from about 15% to 30% if everything reports to TU, EQ, and EX. Otherwise I will use my debit card.

Thanks in advance.

MG

[StartingOver10]

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@Anonymous wrote:

Hi All,

From what I've read in some articles, it is my understanding that If I use my credit card, and pay off some of the balance before my statement generates, that only the remaining balance is what is reported to the 3 bureaus. I'm going to buy plane and sports tickets, but combined with my regular monthly spending, it will take me over 30% of my utilization. I have a rewards card, so I want the points, but I don't want my utilization to spike. 

If I pay the two ticket charges off before the statement generates, will the reported balance be the remaining monthly expenditures? I am spending about $1000 on the tickets, and I typically total about $1000 per month on credit cards. My utilization will go from about 15% to 30% if everything reports to TU, EQ, and EX. Otherwise I will use my debit card.

Thanks in advance.

MG

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Yes, the amount that is reported is the remaining balance  that you did not pay early.  So you get all of your points and your utilization won't spike. 

The only residual that you will see is the "high credit" notation of whatever your highest usage was....eg last month my venture card reported $27 because I had paid off every amount by the due date but the $27. My high credit now reports $6800 (and change) because that is what I spent and paid within the month before the card was due. 

Internally you look better to your creditor (swipe fees and transactional borrower), but the only sign you see is in the high balance column. There is no evidence the high balance column is used at all in calculating your score as far as I am aware.

Only the actual reported balances are used to generate the utilization portion of your score. 

[Anonymous]

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@StartingOver10 wrote:

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@Anonymous wrote:

Hi All,

From what I've read in some articles, it is my understanding that If I use my credit card, and pay off some of the balance before my statement generates, that only the remaining balance is what is reported to the 3 bureaus. I'm going to buy plane and sports tickets, but combined with my regular monthly spending, it will take me over 30% of my utilization. I have a rewards card, so I want the points, but I don't want my utilization to spike. 

If I pay the two ticket charges off before the statement generates, will the reported balance be the remaining monthly expenditures? I am spending about $1000 on the tickets, and I typically total about $1000 per month on credit cards. My utilization will go from about 15% to 30% if everything reports to TU, EQ, and EX. Otherwise I will use my debit card.

Thanks in advance.

MG

---

Yes, the amount that is reported is the remaining balance  that you did not pay early.  So you get all of your points and your utilization won't spike. 

The only residual that you will see is the "high credit" notation of whatever your highest usage was....eg last month my venture card reported $27 because I had paid off every amount by the due date but the $27. My high credit now reports $6800 (and change) because that is what I spent and paid within the month before the card was due. 

Internally you look better to your creditor (swipe fees and transactional borrower), but the only sign you see is in the high balance column. There is no evidence the high balance column is used at all in calculating your score as far as I am aware.

Only the actual reported balances are used to generate the utilization portion of your score. 

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I did an experiment this month and paid my Credit Cards early resulting in a small negative balance. My score went from 839 down to 832. Since cash flow is never an issue, I pay in full every month. It looks like that hiding my usual monthly spend generally between $10-20K hurt my score. No changes anywhere else.

FICO algorithms are not perfect.

[Thomas_Thumb]

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@Anonymous wrote:

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I did an experiment this month and paid my Credit Cards early resulting in a small negative balance. My score went from 839 down to 832. Since cash flow is never an issue, I pay in full every month. It looks like that hiding my usual monthly spend generally between $10-20K hurt my score. No changes anywhere else.

FICO algorithms are not perfect.

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Taxman1 - Like you, I let my usual monthly spend report on cards and then PIF. As long as the usual monthly spend relative to your aggregate CL keeps you in the "optimal" range, pre-pay may not gain you anything.

The Fico models want to see some reported credit use every month. Thus, if you pre-pay all cards and show a zero or negative balance score will drop. This score drop has been reported many times on the forum. Always allow some positive balance to report.

Given your situation, a good follow-up test would be to let a typical balance report on one card only - while prepaying all other cards. The number of open accounts reporting a balance can influence score. The amount of influence, if any, is profile dependent. Give it a try, perhaps it will boost your score into the 840s.

[Anonymous]

Yep - definitely want something small to report - I goofed and paid off all my cards because I wanted to switch which one reports (one with a higher CL) - anyway - this week it looks like I had NO Util - took a 23 pt hit.   Hoping it goes back up next week when my other card hits and shows about 9% reporting.  

[Anonymous]

I get a monthly EX FICO from my AMEX card. I thought that It may have been because the score only updates once per month and it was during the period between when my Wells Fargo posted a $0 (even though there was usage) and my AMEX posted about $1000. Its unfortunate that my insurance bill is charged before my due date, but after my statement posts. I only use the Wells Fargo card for car insurance and any place that doesnt take my Amex.