topic Re: Utilization question. in Credit Cards

Utilization question.

Anonymous — Fri, 26 Feb 2016 03:24:17 GMT

Ok..I have a question regarding utilization. With a total combined CL of around 20k, and fairly new AAoA, what would be a good target for utilization to make my garden grow.. Would it be in the 8-12% range? Or, am I better just making smaller purchases on my cards, and PIF when the statement cuts?

Re: Utilization question.

Kevin86475391 — Fri, 26 Feb 2016 03:30:57 GMT

For optimal utilzation let 1 card report a very low balance, about 1-9% and 1% will be better than 9%. Let the others cards report a $0 balance. Coming as close to that as possible is beneficial. Other big utilization benchmarks: stay under 10%, stay under 30%, stay under 80%, stay under 95%. But in general lower is always better, just not quite zero.

Re: Utilization question.

Anonymous — Fri, 26 Feb 2016 03:44:59 GMT

Thanks.. Would I be safe to assume that I do have to use the cards so that a payment history will show?

Re: Utilization question.

Kevin86475391 — Fri, 26 Feb 2016 03:52:48 GMT

Yes, you should use them each at least a little bit and ideally try to rotate which card reports a balance and which ones don't. You'll also want to make sure to use them at least periodically to prevent them from closing due to inactivity. Anyway, good luck

Re: Utilization question.

Anonymous — Fri, 26 Feb 2016 04:00:33 GMT

In my opinion if your gardening and not planning on applying for anything in the near future I wouldn't worry to much about utilization. Just use your cards and PIF before the due date... you will still get the same positive history. Having the cards report a bal and making timely payments will also show creditors you can handle debt. Why stress about it until you need to.

Re: Utilization question.

Kevin86475391 — Fri, 26 Feb 2016 04:16:17 GMT

@Anonymous wrote:
In my opinion if your gardening and not planning on applying for anything in the near future I wouldn't worry to much about utilization. Just use your cards and PIF before the due date... you will still get the same positive history. Having the cards report a bal and making timely payments will also show creditors you can handle debt. Why stress about it until you need to.

Great point, I quite agree. While my previous posts mentioned the theoretical best approach to utilization for scoring purposes as we understand it, I certainly don't bother being so precise either. I just keep my utilization low in general, PIF, and let whatever happens to report report.

Re: Utilization question.

elim — Fri, 26 Feb 2016 04:32:19 GMT

@Anonymous wrote:
In my opinion if your gardening and not planning on applying for anything in the near future I wouldn't worry to much about utilization. Just use your cards and PIF before the due date... you will still get the same positive history. Having the cards report a bal and making timely payments will also show creditors you can handle debt. Why stress about it until you need to.

this ^

what works for me...

use a few cards heavy, let them report, PIF, replace one card with one from the safe, do it again, replace a different card with one from the safe, do it again.

big spend and big payments on less than half your cards every month, in some sort of overlapping rotation, and PIF = nice CLI mode,

just before you exit the garden, report 1-9% on 1 card only(as previous poster mentioned), request any CLI's, and get you next app out of the way.

you can target the cards you are wanting CLI on.by using them the heaviest and/or keeping them in rotation.

Re: Utilization question.

ccpat — Fri, 26 Feb 2016 04:39:00 GMT

Why do some say PIF before due date and others PIF after reporting?

Re: Utilization question.

Anonymous — Fri, 26 Feb 2016 05:18:12 GMT

You want to pay down to 10% that gets reported. pay it off as you see fit. With the accounts that aren't run up high, just pay them by the due date. Certain store and fuel cards skip months if they don't report balances so you don't want that. on account that have a weak limit you want to pay them before they cut so util is not sky high. it is bad for scoring but good for internal relationship so you have to decide what is better.

Re: Utilization question.

Closingracer99 — Fri, 26 Feb 2016 06:34:31 GMT

@ccpat wrote:
Why do some say PIF before due date and others PIF after reporting?

Personally I do it out of habit lol.

Re: Utilization question.

Chris679 — Fri, 26 Feb 2016 09:06:29 GMT

@ccpat wrote:
Why do some say PIF before due date and others PIF after reporting?

PIF before the due date if you want to minimize the balance on your statement. If you don't care, then just PIF after the statement cuts.

Re: Utilization question.

takeshi74 — Fri, 26 Feb 2016 14:17:23 GMT

@Anonymous wrote:
Ok..I have a question regarding utilization. With a total combined CL of around 20k, and fairly new AAoA, what would be a good target for utilization to make my garden grow.. Would it be in the 8-12% range? Or, am I better just making smaller purchases on my cards, and PIF when the statement cuts?

As low as possible. We can't tell you exactly where you'd maxmize point gain for revolving utilization drop and where you would start to see less gain per % drop. You'd have to test and monitor while accounting for other data changes to determine that.

That said, you don't need to constantly keep it that low. Generally keep in under 30%. If apping or requesting a CLI then you want it as low as possible as a report and score will be referenced and the balances and limits on that report will be considered. Preiovusly reported balances and limits won't matter.

@Anonymous wrote:
Would I be safe to assume that I do have to use the cards so that a payment history will show?

Not necessarily. I have several accounts with no usage that show payment history. It really all depends on the specific creditor. You want sufficient usage to avoid account closure due to inactivity but you need to confirm what that policy is with each of your creditors and ensure that you meet at least the minimum requirements.

@ccpat wrote:
Why do some say PIF before due date and others PIF after reporting?

It's all about what balance one wants to report. If you're fine with the balance reporting as is then pay after the report date. If you want to reduce the reported balance then pay the balance down with sufficient time for the payment to clear prior to the report date. Pay any remainder of the statement balance, if applicable, by the due date.

My spend and limits have been falling at about 6% and my FICO 8's are above 800 even with most cards reporting balances so I don't worry about it and just pay by due date. However, one looking to eke out additional points when applying may want to reduce reported balances and number of balances.

@elim wrote:
big spend and big payments on less than half your cards every month, in some sort of overlapping rotation, and PIF = nice CLI mode,

Do not rely solely on the usage meme. It is also not just about the account itself. Any CLI is determined based on what one's entire credit profile and income qualify for. This is only anecdotal but several of my cards have received large CLI's with little or no usage.

Re: Utilization question.

driftless — Fri, 26 Feb 2016 14:36:42 GMT

My approach is based on simplicity. I have two cash back and one travel cards. I use the cash back cards for everything so I record high usage. I PIF on the due date, Capital One likes to see large payments, not sure about Chase yet. If my usage is abnormally high, I will make a payment mid-cycle. I PIF on the due date with my travel card which I use only for travel and restaurants. I have all three cards set to automatically PIF on the due date so I will never miss making that payment. If you are using the card they are going to report it. I find that using the fewest number of cards is easiest, at least for me, and some ccc like to see a lot of usage. YMMV.

Re: Utilization question.

SouthJamaica — Fri, 26 Feb 2016 14:59:16 GMT

@Anonymous wrote:
Ok..I have a question regarding utilization. With a total combined CL of around 20k, and fairly new AAoA, what would be a good target for utilization to make my garden grow.. Would it be in the 8-12% range? Or, am I better just making smaller purchases on my cards, and PIF when the statement cuts?

If you're trying to optimize your score best thing is to keep overall utllization -- based on balances reported on statements -- at 9% or less. Ideal is all but one accounts reporting zero balance, with one account reporting 9% or lower.