topic Re: Credit Utilization In following Scenario in Understanding FICO® Scoring

Credit Utilization In following Scenario

Outdoorstech1 — Fri, 27 Jun 2014 12:10:48 GMT

This is my first post on here. I am rebuilding my credit. And awesome info on this site so far, I have learned so much in the last few weeks reading.

Say my limit is $500 and I purchase something for $350 (70% of my limit). However, I pay the $350 within a few days my making a payment BEFORE my monthly statement comes and at the end of the month, my net balance comes out to be $50 (10% of my limit) as a result of making several payments within the month.

In this case, is the Utilization ratio a low 10% or something else?

I have tried to find answer to this strategy of keeping the ratio down, but have not found any valuable ones yet.

Or do I never max out my credit card, and only charge up to 30% of the card, because that will be shown on my credit report as the (High Balance)?

Re: Credit Utilization In following Scenario

Anonymous — Fri, 27 Jun 2014 14:40:22 GMT

Welcome to the forums!

Typically a CC balance is reported once a month to the credit bureaus, and the utilization calculation for scoring purposes is based on that.

A typical scenario is that your balance on the statement date is reported shortly thereafter.

A variation is reporting the current balance at the end of the month.

Re: Credit Utilization In following Scenario

bch238 — Fri, 27 Jun 2014 20:29:57 GMT

OP, If the monthly statement closes out with your hypothetical $50, so that $50 is shown as your balance on your next bill, then more likely than not that will be the amount reported to the credit bureaus.

Re: Credit Utilization In following Scenario

Outdoorstech1 — Tue, 01 Jul 2014 04:38:52 GMT

Cool, thanks.