topic Re: Maximizing credit card utilization to increase FICO...still unclear in Credit Cards

Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 16:38:30 GMT

My situation is like this. I have 2 chase credit cards which I just finished paying and now both have a zero balance.

Both have the same:

Payment due date = 18th of the month
Statement Closing date = 24th of the month (So from 25th (opening) to the 24th (close))

Chase 1 total credit line is $7000.
Chase 2 total credit line is $14,600

Moving forward if I want to increase my FICO (725), how many transactions should I have on each card each month, by what time during the month should I make the payment to each, and what percent of the transactions total usage should I pay monthly to each card (should I PIF both or leave $5, and at what time during the month should the payment be made)?

Re: Maximizing credit card utilization to increase FICO...still unclear

SpecFile — Mon, 03 Sep 2007 16:48:19 GMT

I'll keep it short and sweet. To obtain the best scores with revolving credit keep your util at 1-9% of total CL. Your two cards have a total CL of $21,600 so just keep your util reporting at 1-9%.

As far as when to pay and statement dates go, I will let someone else dig that deep.

Message Edited by SpecFile on 09-03-2007 11:48 AM

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 17:36:29 GMT

SpecFile wrote:
I'll keep it short and sweet. To obtain the best scores with revolving credit keep your util at 1-9% of total CL. Your two cards have a total CL of $21,600 so just keep your util reporting at 1-9%.

As far as when to pay and statement dates go, I will let someone else dig that deep.

Message Edited by SpecFile on 09-03-2007 11:48 AM

If you pay too soon, the creditor will not be able to report anything but a zero balance which will make it appear as though you are not utilizing the available credit. Wait until the statement is cut and allow them to report (usually within a few days) and then PIF. This way you will be showing responsible credit management. Just make sure you keep utils low, as SpecFile said.

Re: Maximizing credit card utilization to increase FICO...still unclear

SpecFile — Mon, 03 Sep 2007 18:23:26 GMT

When you say "cut the statement" does that mean when it arrives in the mail?

Message Edited by SpecFile on 09-03-2007 01:23 PM

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 18:27:13 GMT

SpecFile wrote:
When you say "cut the statement" does that mean when it arrives in the mail?

Message Edited by SpecFile on 09-03-2007 01:23 PM

Sorry, that is an accounting term that means when they create the statement. Most of my creditors have already reported before I get the statement in the mail. They seem to be on an automatic system so that when the statement is created, it reports automatically. At least that has been my experience. What I wish they would do is report my payment as fast as they report my charges. LOL

Re: Maximizing credit card utilization to increase FICO...still unclear

SpecFile — Mon, 03 Sep 2007 18:33:52 GMT

Ahhh, so if they cut the statement with a balance of $100, then report the $100 balance a few days later, then I pay the statement balance to $0??? Why is this confusing me?

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 20:56:08 GMT

I understand the part of 1-9% utilization but I am still not sure when in my case I should make the payments.

Re: Maximizing credit card utilization to increase FICO...still unclear

MidnightVoice — Mon, 03 Sep 2007 21:13:16 GMT

thomasil74 wrote:
I understand the part of 1-9% utilization but I am still not sure when in my case I should make the payments.

What I do is monitor the cards on line, and I know the date the statement will be posted on line. I pay (on line) most of the money I will owe so that it is recorded BEFORE the statement date. That leaves a few bucks owing when the statement comes out, and this is reported to the CRA so it sees I used the card, and I pay that in full so there are no finance charges.

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 22:10:17 GMT

Your strategy makes sense. My only question is when do you PIF to not be penalized with finance charges.

To maximize FICO score and pay the least amount of fees. If my statement comes out on the 24th of the month. I want to know from when to when I should make transactions on the card.

When to pay most of the balance except $5. When to pay it in full?

Message Edited by thomasil74 on 09-03-2007 03:10 PM

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 22:33:04 GMT

MidnightVoice wrote:

thomasil74 wrote:
I understand the part of 1-9% utilization but I am still not sure when in my case I should make the payments.

What I do is monitor the cards on line, and I know the date the statement will be posted on line. I pay (on line) most of the money I will owe so that it is recorded BEFORE the statement date. That leaves a few bucks owing when the statement comes out, and this is reported to the CRA so it sees I used the card, and I pay that in full so there are no finance charges.

I agree with Midnight that this is a good system. The only time this will not work is when you have a card like one of mine that has no grace period. In that case, it doesn't make any difference when you pay, you will still owe interest. Thankfully, I am now able to close that one out since I just got approved for a replacement card with double the CL.

Re: Maximizing credit card utilization to increase FICO...still unclear

SpecFile — Mon, 03 Sep 2007 23:27:04 GMT

Just go approved huh? When Sleigh?

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Mon, 03 Sep 2007 23:48:30 GMT

SpecFile wrote:
Just go approved huh? When Sleigh?

I was actually referring to the Walmart Discover with 2500 CL that I got approved for yesterday. I will be cutting up an Applied Bank Visa with $1200 credit line, $10.95 mo. fee, and no grace period on 23.99%APR. Isn't it terrible what we settle for when we first start out on the road to recovery?

BTW, I have almost chewed my fingers to the first joint (fingernails gone long time ago) today trying to hold on and not apply for another card. LOL

Re: Maximizing credit card utilization to increase FICO...still unclear

SpecFile — Mon, 03 Sep 2007 23:50:45 GMT

I know what you mean. I have settled for some of the worst out there. I'm past that now but remember it like it was yesterday.

Re: Maximizing credit card utilization to increase FICO...still unclear

George2037 — Tue, 04 Sep 2007 12:08:07 GMT

haha, I had a Credit One CC that as soon as I got it I maxed it to 80% UTL just to show I used it and paid just enough to carry the balance for about 18 months.....it ended up costing me $23 in fee's and intrest a month. As soon as I got my first unsecured card I paid the Credit One off and cancled it. I wasted so much money, but it was well worth it... My scores went from the 480 range to 620 just from that card and a car loan.

Re: Maximizing credit card utilization to increase FICO...still unclear

Anonymous — Tue, 04 Sep 2007 13:20:12 GMT

George2037 wrote:
haha, I had a Credit One CC that as soon as I got it I maxed it to 80% UTL just to show I used it and paid just enough to carry the balance for about 18 months.....it ended up costing me $23 in fee's and intrest a month. As soon as I got my first unsecured card I paid the Credit One off and cancled it. I wasted so much money, but it was well worth it... My scores went from the 480 range to 620 just from that card and a car loan.

I still have a Credit One card with $250 CL. Costs me $5.75 each month to have it, plus interest. It is the next to go after the Applied Card. These cards served their purpose and I am grateful I could get them, but they have outlived their usefulness for me. BTW, my scores started out around 485 and now are at 635. I was at 650, but too many inqs and new accounts have cost me some points. I hope to reach the 700 club by May 2008 when my last old CA falls off.

Re: Maximizing credit card utilization to increase FICO...still unclear

George2037 — Tue, 04 Sep 2007 14:41:35 GMT

George2037 wrote:
haha, I had a Credit One CC that as soon as I got it I maxed it to 80% UTL just to show I used it and paid just enough to carry the balance for about 18 months.....it ended up costing me $23 in fee's and intrest a month. As soon as I got my first unsecured card I paid the Credit One off and cancled it. I wasted so much money, but it was well worth it... My scores went from the 480 range to 620 just from that card and a car loan.

My EQ and TU have been flirting with 660-690, EX was near 620, but I took advantage of the high scores and aquired several CC and Revolving Credit just to knock down my UT% and try to show a mix of accounts. I definatly agree these cards served their purpose. I had been so apreciative I tried to find a Credit One Card without annual fees but they didn't offer it. Guess there in the "Risky Business" If anyone is in the position I was I would most definatly send them their way, even if all the PFD, DV's, GW letters don't work nothing beats an account in good standing. If you have to pay a little or a lot in intrest, fees, and what not.....it's most definatly worth it!