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mendo101
Posts: 5
Registered: ‎03-22-2007

balance to limit ratio- a question

so should i use my card to 30% (or 10% as some have suggested) then pay off each month (what i am currently doing)- i end each month with a zero balance. should i wait to pay so the CC company reports that i am using this ratio, or should i keep paying as i am. i usually pay a few days before the due date, in full, online. will waiting til the report goes out bump my credit up? it has been at 690 forever, despite CC company raising my limits (750 to 5500!) and getting a substantial car loan. please advise, thanks, e
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Your overall utilization should never exceed 30% or 10 as...

Your overall utilization should never exceed 30% or 10 as some say.  Having balances on too many of your cards can also effect your score negatively.  I have been using this stategy and it has worked for me.  I have one card with a high utlization (52%) due to a large purchase.  I pay this one off at 300.00/mo.  I have a cash back card that I use for day to day purchases and PIF every month.  The rest of my cards, until they make me a better offer are used for occassional purchases every few months just to make sure they are actively reporting.  I rotate which one to use.  Awesome since I can now buy gas at Sam's Club using my Walmart card.  I drive a small card so it keeps that occasional purchase to under 20.00.
 
Even though you may PIF every month it doesn't mean that's the balance being reported to the bureau.  Some cards report balances as of EOM.  For example, yur payment is due on the 7th onf the month, you pay it off.  Between the 7th and the 30th you use 50% of your limit. If you have a card that reports EOM, it will report the 50% utilization as opposed to your sterling PIF history.   I generally know which cards report when so I make a min payment on the statement date and then pay the rest off right before the reporting date.  If I goof, at least I got the min in but so far its been working

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