topic Re: CREDIT UTILIZATION QUESTION AND HELP? in Credit Cards

CREDIT UTILIZATION QUESTION AND HELP?

bsal — Sun, 15 Jun 2008 19:21:56 GMT

OK GUYS I'M KIND OF CONFUSE AND I NEED A LITTLE HELP WITH THIS I UNDERSTAND CREDIT UTILIZATION IS BALANCE/ CREDIT LIMIT * 100 BUT MY QUESTION IS THIS I'M GOING TO BE RECIVING MY FIRST SECURED CARD OF 1000.00 FROM PENFED NOW IF I SPEND 300.00 ON THE CARD ARE U GUYS SAYING I'M GOING TO HAVE TO PAY 200.00 DOLLARS BEFORE I GET MY ACTUAL BILL IN THE MAIL TO KEEP MY UTILIZATION JUST AT 10%? AND WHEN I GET THE BILL IN THE MAIL JUST PAY IT OFF OR AM I SUPOSE TO JUST LEAVE A BALANCE I'M CONFUSED CAN SOMEBODY HELP ME AND LET ME KNOW IF I'M DOING IT RIGHT?

Re: CREDIT UTILIZATION QUESTION AND HELP?

bsal — Sun, 15 Jun 2008 20:48:02 GMT

ANY ADVISE ON THIS?

Re: CREDIT UTILIZATION QUESTION AND HELP?

Anonymous — Sun, 15 Jun 2008 21:16:25 GMT

bsal wrote:

OK GUYS I'M KIND OF CONFUSE AND I NEED A LITTLE HELP WITH THIS I UNDERSTAND CREDIT UTILIZATION IS BALANCE/ CREDIT LIMIT * 100 BUT MY QUESTION IS THIS I'M GOING TO BE RECIVING MY FIRST SECURED CARD OF 1000.00 FROM PENFED NOW IF I SPEND 300.00 ON THE CARD ARE U GUYS SAYING I'M GOING TO HAVE TO PAY 200.00 DOLLARS BEFORE I GET MY ACTUAL BILL IN THE MAIL TO KEEP MY UTILIZATION JUST AT 10%? AND WHEN I GET THE BILL IN THE MAIL JUST PAY IT OFF OR AM I SUPOSE TO JUST LEAVE A BALANCE I'M CONFUSED CAN SOMEBODY HELP ME AND LET ME KNOW IF I'M DOING IT RIGHT?

Just a friendly reminder that all caps are hard to read, and are considered to be shouting on Internet forums. Please turn your caps lock off in future posts.

Yes, you are correct that if you have a $1000 CL and spend $300, you will have to pay $200 before the statement cuts (not just before you get the bill in the mail, but before the actual statement date) in order to let 10% report.

Once the statement cuts, however, you will still have to pay the minimum monthly payment by the due date to avoid making a late payment.

Hope that helps.

Re: CREDIT UTILIZATION QUESTION AND HELP?

bsal — Sun, 15 Jun 2008 21:45:27 GMT

sorry for the all caps chedder and yes it helped but forgive me for this dumb question but what do u mean before the statement cuts? how will i know when the statement cuts?

Re: CREDIT UTILIZATION QUESTION AND HELP?

Anonymous — Sun, 15 Jun 2008 22:46:01 GMT

U will get a billing statement! or you can call Customer service and ask when is your next statement!

Re: CREDIT UTILIZATION QUESTION AND HELP?

Anonymous — Sun, 15 Jun 2008 23:49:54 GMT

Utilization is not a running total, but rather a "snapshot" of your balances versus your credit limits that is taken right around the time your statement is cut.

This is why simply charging up a high balance at a given moment in time doesn't mean your utilization is necessarily shot, nor does paying your balance down in and of itself immediately reduce utilization. Rather, the balance and CL at the time your statement cuts is what is generally reported.

Next time you get a statement, check the date (usually in the upper right corner).

Re: CREDIT UTILIZATION QUESTION AND HELP?

Zar — Mon, 16 Jun 2008 00:05:50 GMT

I have a question... what about if someone has five cards and very small balances (less than 9%) on three or four of them? Does it hurt the FiCO or how a potential lender sees that person?

Zar

Message Edited by Zar on 06-15-2008 05:05 PM

Re: CREDIT UTILIZATION QUESTION AND HELP?

Anonymous — Mon, 16 Jun 2008 00:06:54 GMT

No Zar, to the contrary, you're helping your FICO by having five positive TLs reporting in good standing.

Now if you want to split hairs, technically, to get the absolute most for your FICO score, you would want less than half those cards to report balances at all. But that's serious, 2 to 3 point nitpicking. You're doing a wonderful job. Pat yourself on the back.

Re: CREDIT UTILIZATION QUESTION AND HELP?

Zar — Mon, 16 Jun 2008 00:22:03 GMT

Thank you very much TheNewWorldMan! I'm learning a lot here!

Zar

Re: CREDIT UTILIZATION QUESTION AND HELP?

bsal — Mon, 16 Jun 2008 00:48:48 GMT

ok you just lost me on everything you just said i'm going to need you to dumb it down for me please i'm new to this

Re: CREDIT UTILIZATION QUESTION AND HELP?

zeek69 — Mon, 16 Jun 2008 01:18:31 GMT

Isn't the important date here not when the statement "cuts" (is issued) but rather when the CC company reports to the CRA's. These dates are not necessarily the same. For instance, your bill may be due on the 15th of the month, but the CC company may not report the current balance until the last business day of the month (this is the case with orchard). In this example if you PIF on the 15th and then maxed out the card before the end of the month, you would be at 100% utilization on your credit report.

I suggest you find out exactly when PENFED reports the card balance to the CRA's, and make sure you are at the appropriate utilization on this date. It goes without saying that you need to pay at least the minimum owed on the due date, but you may also need to make a second payment right before the CC company reports.

Re: CREDIT UTILIZATION QUESTION AND HELP?

Anonymous — Mon, 16 Jun 2008 01:45:36 GMT

zeek69 wrote:
Isn't the important date here not when the statement "cuts" (is issued) but rather when the CC company reports to the CRA's. These dates are not necessarily the same.

You're correct, but 99% of the time, these dates are the same.

The only exceptions of which I am aware are some HSBC cards, which report on the last business day of the month, and some CUs, which report on the first day of the month.

Also, the important variable is not exactly which date the CCC reports to the CRAs, rather it is which date's balance is reported to the CRAs, since that is the date whose balance you need to target for utilization purposes.

For example, Amex reports near the end of the month for me, but they report the statement balance, even though by that time the statement balance is more than three weeks old. If I want to control the balance that Amex reports, it doesn't matter one bit which day they actually report. The only thing I need to know is which date's balance they will eventually report, even if that reporting may not happen for a few more weeks.

HSBC does not report statement balances at all for the cards that report at the end of the month. They report the balance as of the day they report. So, to control reported utilization for those cards, you need to target the balance on the last day of the month, rather than the statement balance.

We give the advice to target the statement balance, however, because it is good advice for the vast majority of CC issuers.

Message Edited by cheddar on 06-15-2008 06:45 PM

Re: CREDIT UTILIZATION QUESTION AND HELP?

bsal — Mon, 16 Jun 2008 19:52:20 GMT

so in my case if i had a 1000.00 and spent 300 i would pay the 200 right away before my statement cuts then when i get the bill in the mail for the remander of the bal, and its due lets say on the 15th of the month i would just pay the minimum bal on the card just to have some type of balace for the cra's? is this right please correct me if i'm wrong

Re: CREDIT UTILIZATION QUESTION AND HELP?

Anonymous — Mon, 16 Jun 2008 20:22:01 GMT

bsal wrote:
so in my case if i had a 1000.00 and spent 300 i would pay the 200 right away before my statement cuts then when i get the bill in the mail for the remander of the bal, and its due lets say on the 15th of the month i would just pay the minimum bal on the card just to have some type of balace for the cra's? is this right please correct me if i'm wrong

Not necessarily. Because the 10%, or $100 balance will have already been reported at the time your statement cuts, you do not need to leave a balance. You can pay your bill in full and still get the maximum FICO benefits.

Re: CREDIT UTILIZATION QUESTION AND HELP?

bsal — Mon, 16 Jun 2008 21:22:38 GMT

so when i get the bill that says its do on the 15th the 10% its already reported to the credit report angeis? so i should just pay the bill off entirdey?

Re: CREDIT UTILIZATION QUESTION AND HELP?

MichiganMommy — Mon, 16 Jun 2008 21:42:11 GMT

Okay now I am confused. Do you have to pay down to 10% utilization before the statement cuts OR before it is reported to the CRA?

Re: CREDIT UTILIZATION QUESTION AND HELP?

haulingthescoreup — Mon, 16 Jun 2008 22:43:59 GMT

It's your choice as to whether you want to have that particular card report to the CRA's that month.

Probably the best that you can do in the util area is to have every card but one report $0, and that one card report under (not at) 10% of is CL. Under (not at) 5% might be even better. Under 10% = 9% or less. Under 5% = 4% or less. Obviously, anyone who now has significant balances are going to have to work toward this goal a month at a time.

So on any card that you want to report under 10%, pay it down online about 5 days before you think the statement is due again. Keep checking to make sure that nothing sneaks in. On the day that you think the statement will post, go online to your account and click the "view statements" button. If one shows up for the current month, then you should be OK. Once it does show up, then make sure to then either pay the minimum due or pay it off (it's easy to forget this.)

If you want your card to report $0, just do the same thing, except that you'll PIF.

There might be some delay in reporting the balance, but almost always, the balance that is reported is that which shows on your statement. HSBC bank cards are the exception. They seem to report on the last business day of the month, and they report the balance that you have that day. Except that they often seem to skip a month in reporting. And finally, American Express reports the previous month's balance. Mine just updated on the 14th with last month's balance, and my next statement will post on the 18th. But it won't be reported until July 14. (This just happens to be my billing cycle, BTW.)

Re: CREDIT UTILIZATION QUESTION AND HELP?

bsal — Wed, 03 Dec 2008 13:30:20 GMT

this might be old news but here is my situation i'm in the progress of building credit, right now my scores are as follows TU= 660 EQ=717 EX=700 i have one installment school loan that should be reporting at a balance of 1,554.00 paid on time never late, i just opened a Macy's Store department card they only gave me a 100.00 balance since as you know i'm trying to rebuild my credit, i have no baddies no collections i do however prob have a few inquires cause i have been applying latelty just to get something, but uppon gettin approved for my macy's card I used 60.00 out of a balace of 100.00, I did however that same day after i used my new card i paid 50 dollars so i can get that 10% Utilizaion when statement cuts, I also called macy's and they told me they report to he credit people on the 1st week of every month, so my question is since i paid the bulk of my store department card should i pay in full the 10.00 dollars or just pay the minumn so i can leave a balance?

Re: CREDIT UTILIZATION QUESTION AND HELP?

haulingthescoreup — Wed, 03 Dec 2008 19:41:15 GMT

bsal wrote:

...I also called macy's and they told me they report to he credit people on the 1st week of every month, so my question is since i paid the bulk of my store department card should i pay in full the 10.00 dollars or just pay the minumn so i can leave a balance?

Bless their hearts, I've had WFNNB tell me that they update every Friday, and yet it's all that I can do to get them to update every three months.

It's more likely that Macy's updates on your statement date, which is different for everyone. Now maybe they send a batch of updates every Monday or something, but you'll probably need to wait until your statement drops to expect an update to the CRA's.

HSBC/Orchard bank cards do (supposedly) update on the last business day of the month, regardless of when statements post, but they're the only ones I've heard of that do this. But I'm happy to say that I could be completely wrong on this.

Any Macy's people here --do your reports generally update at statement time, or some unrelated time? usually EX is the quickest to update, often on the day of the statement or the following day.