pls help me to understand this utilization thing..

[felice]

In tryng to rebuild credit, if I have a new account say activated on sept 15th with a 300 dollar cl, I should only have a balance of no more than 90.00 at anu given time? Do I need to find out when the cc company reports to the bureaus? Or just to be on the safe side only always carry a low balance? I'm rebuilding after a chapter 7 bk and realized after being on this forum I don't know half of what I thought I did in regards to managing credit. I always thought as long as u didn't exceed ur limit and pd the min you were doing good. I am trying to get a car loan in 6 months and want to try to maximize my score as much as possible. I was thinking if I charge a purchase and then pay half of whatever it is I charge I would be doing good? Or should I only charge what I can pif? Thanks for any help.

[MarineVietVet]

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@felice wrote:
In tryng to rebuild credit, if I have a new account say activated on sept 15th with a 300 dollar cl, I should only have a balance of no more than 90.00 at anu given time? Do I need to find out when the cc company reports to the bureaus? Or just to be on the safe side only always carry a low balance? I'm rebuilding after a chapter 7 bk and realized after being on this forum I don't know half of what I thought I did in regards to managing credit. I always thought as long as u didn't exceed ur limit and pd the min you were doing good. I am trying to get a car loan in 6 months and want to try to maximize my score as much as possible. I was thinking if I charge a purchase and then pay half of whatever it is I charge I would be doing good? Or should I only charge what I can pif? Thanks for any help.

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Hi Felice and welcome to the forums.

One of the important things you need to know is when your monthly statement posts. Once you know that date you can time your payments to get your utilization to the proper amount. You can charge what ever you want during the month (being careful of course not to go overlimit) but try and have your balance down to less than 9% of your credit limit (in your case no more than $27) at least a few days before your statement posts. The reason you do that is because whatever amount is showing on your statement is the amount used to calculate utilization.

You will also have a due date on your statement. Pay your balance in full before that due date to avoid any finance charges. You don't have to use your card every month but try and show some activity every 2-3 months to keep the credit card company happy. You never have to carry a balance forward from month to month. All that does is cost you interest and does nothing to help your score.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[felice]

thanks so much!

i will definitely follow your advice! 

[MarineVietVet]

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@felice wrote:

thanks so much!

i will definitely follow your advice! 

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You may get other opinions about the best way to manage your utilization each month. Try different methods and see what works for you. It's definitely not a one-size-fits-all situation.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[RobertEG]

You will most certainly get a lot of different opinions on how to manage and pay your CCs monthly in order to maximize FICO score.!  All have their merits.

I will just throw my opinion in.

The most important concern is knowing the date of current payment due date, and the min payment due to avoid any derog reporting, month to month.

Beyond that, it is primarily monthly maintenance in minimization of interest, and avoidance of any derog reporting.

Fine-tweaking of when you pay, and thus when it is posted to your CR, and thus relected in your current FICO score, is all important to know.

But until you are actually in the process of applying for new credit, what your % util was one, two, or three months ago becomes meaningless.

Prior % utils have no historical FICO memory, or affect on your credit score in subsequent months.

My advice, for what it is worth, is to first determine the date that you expect to apply for new credit.  Then, at two months prior to that date, begin to become serious about the fine-tweaking differences between 0%, 9%, or 10+ % util. 

Yes, know when the credtior reports, and yes, get balances down as much as possible before the reporting dates.  But dont agonize over the fine tweaking until it becomes relevant tweaking.

[MarineVietVet]

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@RobertEG wrote:

You will most certainly get a lot of different opinions on how to manage and pay your CCs monthly in order to maximize FICO score.!  All have their merits.

I will just throw my opinion in.

The most important concern is knowing the date of current payment due date, and the min payment due to avoid any derog reporting, month to month.

Beyond that, it is primarily monthly maintenance in minimization of interest, and avoidance of any derog reporting.

Fine-tweaking of when you pay, and thus when it is posted to your CR, and thus relected in your current FICO score, is all important to know.

But until you are actually in the process of applying for new credit, what your % util was one, two, or three months ago becomes meaningless.

Prior % utils have no historical FICO memory, or affect on your credit score in subsequent months.

My advice, for what it is worth, is to first determine the date that you expect to apply for new credit.  Then, at two months prior to that date, begin to become serious about the fine-tweaking differences between 0%, 9%, or 10+ % util. 

Yes, know when the credtior reports, and yes, get balances down as much as possible before the reporting dates.  But dont agonize over the fine tweaking until it becomes relevant tweaking.

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I agree. Don't let it become an obsession and don't lose sleep over a few points here and there.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[llecs]

...and if you do fret over it, then know that the nervous twitching and the eye spasms after getting everything to report exactly perfectly only last for the first six months. After that, you become immune to most of it.

[haulingthescoreup]

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@llecs wrote:

...and if you do fret over it, then know that the nervous twitching and the eye spasms after getting everything to report exactly perfectly only last for the first six months. After that, you become immune to most of it.

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Don't forget the dreams!

[BrandonSS]

To add to the original post;  How do you figure out the date that they post to your credit?  Obviously I understand when my due date is, but not sure how to determine the exact date they report to get the payment window time.

Thanks!

EDIT: I think I just pulled a Mr. Obvious and reading comprehension fail.  The statement date is what everyone talks about... right?  So pay it down before the statement date, then PIF before the due date? 

[haulingthescoreup]

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@BrandonSS wrote:

To add to the original post;  How do you figure out the date that they post to your credit?  Obviously I understand when my due date is, but not sure how to determine the exact date they report to get the payment window time.

Thanks!

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If you have a three-in-one monitoring service that genuinely updates every time you pull (many don't; they just regurgitate older reports), that will show you.

From experience, what we have found is that most CCC's update immediately. Then Experian posts within 24 hours, while EQ and TU take anywhere from 3-4 days to 2 weeks to update.

Some CCC's delay updating. HSBC/ Orchard bank cards piddle around a week or two, and they've been known to simply skip an entire month. American Express used to not update until four weeks after the statement date. They seem to be moving to immediate updates, but not for every card, and not for every user. Some of the rebuilders also take their time. But Bofa, Citi, Chase, Discover, USAA, PenFed, etc etc send off the info the day that the statement drops.

Most of your CCC's update on their statement dates. A few (HSBC/ Orchard bank cards, US Bank cards) report the balance as of the last business day of the month, with HSBC/ Orchard delaying the actual reporting as described above, but US Bank updating right away.

Installment loans and mortgages are often a month behind.

Confused yet?

Think of it this way, nearly all CCC's report the balance on your statement, and they send in that info on that day. You just then have to wait for the credit bureaus to actually post it, which generally happens within 10 days.