topic Re: 0% utilization reported in Credit Cards

0% utilization reported

Anonymous — Sat, 18 Aug 2012 19:40:39 GMT

Hi everyone, before my recent app spree, my util was always in the 7-11% range. After getting some cards and some new limits, my util went down fast. i currently have 35k CL and my util is fluctuating between 4-6% after a nice purchase.

Now, yesterday's payment was extra for many people and in my case that money is enough to pay off my balances to 0.
I don't like debt whatsoever and i have the biggest temptation to click that button and live debt free.

To keep myself with 1% util, i must have a $350 balance.

How would my score be affected by the 0% util hitting my reports?

And

Can i avoid interests even when carrying a balance?

Re: 0% utilization reported

Jlu — Sat, 18 Aug 2012 19:44:38 GMT

Yes you can avoid interest since your statement cut date and your due date are two different things and happen on different days. If you can ensure you balance is $0 on the due date and $350 on the statement cut date then you will achieve 1% utilization. You only need to do this if you are seeking more credit for that particular month though. No need to worry about utilization unless you are seeking credit or it is a problem where you are over 80% utility (not your case).

Re: 0% utilization reported

jamesdwi — Sat, 18 Aug 2012 20:31:47 GMT

the rule is 1-9% on a single card with the rest of the cards reporting 0 for best score. And it doesn't matter which card has the balance showing you can have it show on a $500 CL card so the maximum be less than $50 for 9% or $5 for 1% showing.

Re: 0% utilization reported

Jlu — Sun, 19 Aug 2012 16:46:35 GMT

^This is incorrect information. FICO scoring takes overall utilization into account. When we say 1-9% to maximize scoring we are talking about the overall utilization so on 100k in credit you would need 1k-9k balance on 1 card.

Re: 0% utilization reported

LS2982 — Sun, 19 Aug 2012 20:12:55 GMT

Either way is correct, as long as 1 card out of all cards is carrying the balance and it equates to 1-9% of overall utilization.

Re: 0% utilization reported

Jlu — Sun, 19 Aug 2012 20:15:35 GMT

No, he was implying that 1-9% on a single card limit would generate the same scoring effect as 1-9% overall utilization.

Re: 0% utilization reported

Anonymous — Sun, 19 Aug 2012 20:44:38 GMT

FICO seems to be okay as long as there is at least some balance reporting. Score-wise, its never mattered if I let $1 or $5000 report.

Re: 0% utilization reported

Jlu — Sun, 19 Aug 2012 20:48:02 GMT

Yes it seems as long as you are demonstrating some usage they are happy. It's when there is $0 balances across the board they get nervous.

Re: 0% utilization reported

lg8302ch — Wed, 16 Jan 2013 06:58:32 GMT

..should have red this post first. In the past two months I started testing how the reaction woud be reporting 7% or 0% on my cards. Now I know that 0 balance reporting on all cards gets punished and it is better to report 1-9% on 1 card at least. Just lost 7 points for reporting 0 balance on all my accounts

Re: 0% utilization reported

Anonymous — Wed, 16 Jan 2013 20:37:38 GMT

@Jlu wrote:
Yes you can avoid interest since your statement cut date and your due date are two different things and happen on different days. If you can ensure you balance is $0 on the due date and $350 on the statement cut date then you will achieve 1% utilization. You only need to do this if you are seeking more credit for that particular month though. No need to worry about utilization unless you are seeking credit or it is a problem where you are over 80% utility (not your case).

Not quite true.

You only need to pay the statement balance by the due date to avoid interest and leave the current months charges unpaid so they can report. .

Re: 0% utilization reported

Anonymous — Wed, 16 Jan 2013 20:55:55 GMT

@Anonymous wrote:
@Jlu wrote:
Yes you can avoid interest since your statement cut date and your due date are two different things and happen on different days. If you can ensure you balance is $0 on the due date and $350 on the statement cut date then you will achieve 1% utilization. You only need to do this if you are seeking more credit for that particular month though. No need to worry about utilization unless you are seeking credit or it is a problem where you are over 80% utility (not your case).
Not quite true.

You only need to pay the statement balance by the due date to avoid interest and leave the current months charges unpaid so they can report. .

This is what I thought as well. If your statement balance hits on January 1 and is due on February 1, you just have to pay your statement balance by Feb 1 to avoid paying interest. If your card reports on the 15th, you could show 5% util on January 15, and still pay the bill on January 31 and avoid interest AND have your util report as you would like.