topic Re: Confused about Reporting Balance to CR... Shed some light? in Credit Cards

Confused about Reporting Balance to CR... Shed some light?

Anonymous — Sun, 18 May 2014 16:52:20 GMT

Hi All,

Im a bit confused about the reporting balance. Lets Say I have a $5000 CL. Statement closing date is the 17th of every month and the Due Date is the 14th of the following month. What gets reported to the CRA's? I'd like to show my records that i used my monthly limits but pay in full or at least only leaving 10% or less balance to it.

So through out the month we charged anywhere from $2k one week pay it off few days later, $500 the next week pay it off again, $3k the ff and pay it off again all before the statement closing date. What is the best strategy to show high credit usage but $0 to very little balance and have it reporting to the CRA's? I wanna max my fico scoring..

Any tips would be appreciated...

Re: Confused about Reporting Balance to CR... Shed some light?

Anonymous — Sun, 18 May 2014 17:18:00 GMT

To max out your score, you need to have a low utilization % by the 17th of each month. Use your card as much as you want (as long as the CC provider doesn't care about multiple payments) but make sure that by, say, the 13th of each month you only have a total outstanding balance of around 450 dollars. The amount that matters is the amount reporting on the statement date. Make sure that is low and you'll be good.

Don't worry about the due date as much because you'll basically be paying everything a month in advance. Do make sure to pay the minimum (at least) on months you might not be using the card as much. Also, to avoid interest, pay the card in full after the due date and put a new (small) charge on there... even if it's only for 5 dollars. Try not to ever let a maxed card report as it will drop your score significantly.

On a side note, I'm a newbie but this has added over 100 points to my scores. Hope it helps.

Re: Confused about Reporting Balance to CR... Shed some light?

parakleet — Sun, 18 May 2014 17:20:54 GMT

The statement balance is what is typically reported to the CR. If you're wanting to play the utilization game for maximum scoring, it is generally thought best to pay down your balance to anywhere from 1-9% before your statement closing date.

Edit to add: Need to also mention that utilization has no memory, meaning that you only need to play the utilization game if you're planning to apply for credit for maximum scoring. No need to do this every month if you're not planning applying for any credit.

Re: Confused about Reporting Balance to CR... Shed some light?

Bman70 — Sun, 18 May 2014 17:58:47 GMT

So think of the 17th as the day a "photo" gets snapped of your credit card and sent to the CRAs. Whatever the balance looks like when that snapshot is taken gets reported. It also will be the total due by 14 next month. Anything you charge or pay from the 18th on won't show up (as far as the CRAs are concerned) until the next snapshot

Re: Confused about Reporting Balance to CR... Shed some light?

mongstradamus — Sun, 18 May 2014 17:57:51 GMT

@Bman70 wrote:
So think of the 17th as the day a "photo" gets snapped of your credit card and sent to the CRAs. Whatever the balance looks like when that snapshot is taken gets reported. It also will be the total due by 14 next month. Anything you charge from the 18th on won't show up until the next snapshot

Only thing i would add is make sure you pay statement balance of previous month every time or you will be charged interest.

Re: Confused about Reporting Balance to CR... Shed some light?

Bman70 — Sun, 18 May 2014 18:04:59 GMT

@mongstradamus wrote:
@Bman70 wrote:
So think of the 17th as the day a "photo" gets snapped of your credit card and sent to the CRAs. Whatever the balance looks like when that snapshot is taken gets reported. It also will be the total due by 14 next month. Anything you charge from the 18th on won't show up until the next snapshot
Only thing i would add is make sure you pay statement balance of previous month every time or you will be charged interest.

Yep, as mongstradamus said, the snapshot is also your New Total Balance due by the 14th. If you pay that amount (or more) by each 14th, you pay no interest. I often pay more and earlier, in multiple lumps.

Re: Confused about Reporting Balance to CR... Shed some light?

mongstradamus — Sun, 18 May 2014 18:10:45 GMT

@Bman70 wrote:
@mongstradamus wrote:
@Bman70 wrote:
So think of the 17th as the day a "photo" gets snapped of your credit card and sent to the CRAs. Whatever the balance looks like when that snapshot is taken gets reported. It also will be the total due by 14 next month. Anything you charge from the 18th on won't show up until the next snapshot
Only thing i would add is make sure you pay statement balance of previous month every time or you will be charged interest.
Yep, as mongstradamus said, the snapshot is also your New Total Balance due by the 14th. If you pay that amount (or more) by each 14th, you pay no interest. I often pay more and earlier, in multiple lumps.

For safety and you are able to do it , i would pay statement balance as soon as your statement posts, and then use your credit card as you regularly would. This would there is no chance that you would ever pay interest.

Re: Confused about Reporting Balance to CR... Shed some light?

bk510 — Sun, 18 May 2014 23:31:55 GMT

@mongstradamus wrote:
@Bman70 wrote:
So think of the 17th as the day a "photo" gets snapped of your credit card and sent to the CRAs. Whatever the balance looks like when that snapshot is taken gets reported. It also will be the total due by 14 next month. Anything you charge from the 18th on won't show up until the next snapshot
Only thing i would add is make sure you pay statement balance of previous month every time or you will be charged interest.

And also this will allow you to have a " grace period ".....u get my drift?

Re: Confused about Reporting Balance to CR... Shed some light?

Anonymous — Mon, 19 May 2014 04:11:16 GMT

Wow.. thanks all for the wealth of information!

This helps me a ton... i made a little mistake on letting a balance report that shows almost 50% utilization on that specific card.. its a new card so i didnt know exactly when the cutoff date was until the first statement hit a few days ago.. statement cutoff on the 16th and had 2300ish out of a $5k CL. We made a payment on it today for $1500 so still showing a balance of $800ish which I intend to pay before the actual due date to avoid paying interest on it..

so essentially as I understand per my initial example the 17th is the "snapshot" that gets reported to the CRA and I then have a grace period of x days between the statement date and due date. PIF by or before due date to avoid any interests.. to play the utilization game to max fico scores make sure to have less than 9% balance on any card before the Statement Closing date.

Will it hurt my fico scores much with the 2300ish reporting? Im assuming it will hit me a few points though I have about 81k in New TL's in the last month (Went crazy in the app spree to include another $13k CL Platinum rewards Visa from a local CU here in SoCal last Friday and it already started to report today just 2 days later!).. half of which are already reporting and i assume the other will start to report soon as well..

Re: Confused about Reporting Balance to CR... Shed some light?

14Fiesta — Mon, 19 May 2014 04:40:45 GMT

@parakleet wrote:
The statement balance is what is typically reported to the CR. If you're wanting to play the utilization game for maximum scoring, it is generally thought best to pay down your balance to anywhere from 1-9% before your statement closing date.

Edit to add: Need to also mention that utilization has no memory, meaning that you only need to play the utilization game if you're planning to apply for credit for maximum scoring. No need to do this every month if you're not planning applying for any credit.

I have a question on this. True, that for FICO scoring, utilization has no memory, but your utilization from past months is recorded down hard on your actual CR. I'm fairly new to everything, so I just checked my EX report for the first time last week from the 1 free report a year site from the govt. Inside it listed all the previous balances from the statement cutting since I got my IT card. So while technically while your FICO score has no memory, when applying for credit, won't potential lenders see that you had high balances the last couple of months? Even if you paid it down, they might see your application as an attempt to gain more credit to run up the balances again (possible reason for denial?). Maybe I am over thinking this, but that's why I have made sure I do not let a balance higher than $10 report for my card EVER. I don't want to look like I was desperate for the credit. Anyone's thoughts on this would be greatly appreciated.

Re: Confused about Reporting Balance to CR... Shed some light?

myjourney — Mon, 19 May 2014 04:47:19 GMT

@14Fiesta wrote:
@parakleet wrote:
The statement balance is what is typically reported to the CR. If you're wanting to play the utilization game for maximum scoring, it is generally thought best to pay down your balance to anywhere from 1-9% before your statement closing date.

Edit to add: Need to also mention that utilization has no memory, meaning that you only need to play the utilization game if you're planning to apply for credit for maximum scoring. No need to do this every month if you're not planning applying for any credit.
I have a question on this. True, that for FICO scoring, utilization has no memory, but your utilization from past months is recorded down hard on your actual CR. I'm fairly new to everything, so I just checked my EX report for the first time last week from the 1 free report a year site from the govt. Inside it listed all the previous balances from the statement cutting since I got my IT card. So while technically while your FICO score has no memory, when applying for credit, won't potential lenders see that you had high balances the last couple of months? Even if you paid it down, they might see your application as an attempt to gain more credit to run up the balances again (possible reason for denial?). Maybe I am over thinking this, but that's why I have made sure I do not let a balance higher than $10 report for my card EVER. I don't want to look like I was desperate for the credit. Anyone's thoughts on this would be greatly appreciated.

Yes it's recorded on CR's as far as balances

However Fico has no memory when it comes to UTL

So this month is not affected by last month

Next month is not affected by this month

The only way a potential lender would know your monthly balances would be on manual review not on a instant approval tho

Re: Confused about Reporting Balance to CR... Shed some light?

14Fiesta — Mon, 19 May 2014 05:12:34 GMT

@myjourney wrote:
@14Fiesta wrote:
@parakleet wrote:
The statement balance is what is typically reported to the CR. If you're wanting to play the utilization game for maximum scoring, it is generally thought best to pay down your balance to anywhere from 1-9% before your statement closing date.

Edit to add: Need to also mention that utilization has no memory, meaning that you only need to play the utilization game if you're planning to apply for credit for maximum scoring. No need to do this every month if you're not planning applying for any credit.
I have a question on this. True, that for FICO scoring, utilization has no memory, but your utilization from past months is recorded down hard on your actual CR. I'm fairly new to everything, so I just checked my EX report for the first time last week from the 1 free report a year site from the govt. Inside it listed all the previous balances from the statement cutting since I got my IT card. So while technically while your FICO score has no memory, when applying for credit, won't potential lenders see that you had high balances the last couple of months? Even if you paid it down, they might see your application as an attempt to gain more credit to run up the balances again (possible reason for denial?). Maybe I am over thinking this, but that's why I have made sure I do not let a balance higher than $10 report for my card EVER. I don't want to look like I was desperate for the credit. Anyone's thoughts on this would be greatly appreciated.
Yes it's recorded on CR's as far as balances
However Fico has no memory when it comes to UTL
So this month is not affected by last month
Next month is not affected by this month

The only way a potential lender would know your monthly balances would be on manual review not on a instant approval tho

Okay, so you're saying the computer that gives instant approvals online for people only looks at the FICO snapshot for this month, and doesn't actually consider the previous months util %?

Re: Confused about Reporting Balance to CR... Shed some light?

myjourney — Mon, 19 May 2014 05:27:14 GMT

@14Fiesta wrote:
@myjourney wrote:
@14Fiesta wrote:
@parakleet wrote:
The statement balance is what is typically reported to the CR. If you're wanting to play the utilization game for maximum scoring, it is generally thought best to pay down your balance to anywhere from 1-9% before your statement closing date.

Edit to add: Need to also mention that utilization has no memory, meaning that you only need to play the utilization game if you're planning to apply for credit for maximum scoring. No need to do this every month if you're not planning applying for any credit.
I have a question on this. True, that for FICO scoring, utilization has no memory, but your utilization from past months is recorded down hard on your actual CR. I'm fairly new to everything, so I just checked my EX report for the first time last week from the 1 free report a year site from the govt. Inside it listed all the previous balances from the statement cutting since I got my IT card. So while technically while your FICO score has no memory, when applying for credit, won't potential lenders see that you had high balances the last couple of months? Even if you paid it down, they might see your application as an attempt to gain more credit to run up the balances again (possible reason for denial?). Maybe I am over thinking this, but that's why I have made sure I do not let a balance higher than $10 report for my card EVER. I don't want to look like I was desperate for the credit. Anyone's thoughts on this would be greatly appreciated.
Yes it's recorded on CR's as far as balances
However Fico has no memory when it comes to UTL
So this month is not affected by last month
Next month is not affected by this month

The only way a potential lender would know your monthly balances would be on manual review not on a instant approval tho
Okay, so you're saying the computer that gives instant approvals online for people only looks at the FICO snapshot for this month, and doesn't actually consider the previous months util %?

Correct

Re: Confused about Reporting Balance to CR... Shed some light?

takeshi74 — Mon, 19 May 2014 13:16:32 GMT

@Anonymous wrote:
Will it hurt my fico scores much with the 2300ish reporting?

It's very difficult for us to tell you. Look at it in terms of utilization instead of balance. As indicated above, even if you do lose points for letting that balance report you can rebound next time around.

@parakleet wrote:
Edit to add: Need to also mention that utilization has no memory, meaning that you only need to play the utilization game if you're planning to apply for credit for maximum scoring. No need to do this every month if you're not planning applying for any credit.

I'd still suggest sticking to the 30% max recommendation even if not apping. One can certainly go above that short term with no long term adverse effects but prolonged high utilization can lead to AA.

@14Fiesta wrote:
So while technically while your FICO score has no memory, when applying for credit, won't potential lenders see that you had high balances the last couple of months?

Creditors can always have varying underwriting critieria and manual reviews that look into such detail. However, I have yet to see posts that indicate that prior utilization was a reason for denial.

This is just one anecdotal data point but I have cards that were maxed out in the past (one was balance chased) and have received many approvals since then. Not all received the best terms available but most of them did. You can certainly do all the work to ensure that only $10 reports but it's really not necessry.

Re: Confused about Reporting Balance to CR... Shed some light?

Anonymous — Mon, 19 May 2014 17:21:48 GMT

And just one caveat: the statement date is the important one for most but not all banks. A notable exception is US Bank, which will report your balance at the end of the month, regardess of your statement date. So be aware of that.

Also, just in case this wasn't clear:

I'd like to show my records that i used my monthly limits but pay in full or at least only leaving 10% or less balance to it.

The point of the reporting is to other issuers, your own issuer knows exactly what you spend throughout the month, and doesn't rely on the statement balance for that.