topic Re: How do I play the 1-9% Utilization Game. Please Help in General Credit Topics

How do I play the 1-9% Utilization Game. Please Help

JMills — Wed, 25 Sep 2013 18:29:15 GMT

I am posting this because someone ask this question recently and I never really understood it, I know I am suppose to have one CC reporting 1-9% balance and the rest showing $0.00 balance. Here is my question

Ok I have all the due dates for my CCs, I also have the dates it reports to CR, however I notice that on certain months the day it reports to my CR it may vary by one or two days. What I want to know is how do I play this game of making sure it shows zero balance, is it before my due date? or before it report to my Credit Report and how do I know when the statement close? Make sure I pay it to zero balance before it hits my credit report?

Re: How do I play the 1-9% Utilization Game. Please Help

tcbofade — Wed, 25 Sep 2013 18:34:35 GMT

You can find your statement date on your credit card statement and / or website.

If your statement closes on the 20th, you want to be sure to pay it in full BEFORE the 20th, so that when the statement cuts, the balance will be zero.

Even if it takes a few days to update to the CRA's, when it DOES update, it will update with your statement balance.

Remember to pay at least your minimum payment before the due date tho.

Re: How do I play the 1-9% Utilization Game. Please Help

Themanwhocan — Wed, 25 Sep 2013 18:55:58 GMT

First you should realize that there are 2 groups that you are trying to impress, and they are to some extent complete opposites.

You want to impress the credit card companies. You want to show them that you have credit cards, that you are using them, and that you are paying them off regularily (ideally every month). These companies will decide if they want to loan you more of their money, and they are concerned with risk, and return on investments, etc. So usually for these companies you want to have your monthly charges report to the credit bureaus, then pay in full before you are charged any interest. And don't use too much of any one card, ie, don't rack the card up close to 100%, that can be interpreted as you are finding it difficult to meet your expenses, etc. Appearing desperate is never good.

The second group you want to impress is FICO. They generate a credit score. They don't loan you money, they don't care about your credit history. All they care about is the present moment, the current snap-shot of your credit risk. They will sum up your entire credit worthiness in the form of a number. And only a number.

So, when you want to 'play the game', remember that you are not just a number (except to FICO, and they don't give you a loan or a credit card, now do they?).

Most of the time, just use your card a reasonable amount, let it report, and immediately pay in full. Create that rich, robust credit report that the credit companies want to see. Sure they look at that Fico number, but thats not all they look at, so give them what they want.

As to the FICO score, why its always fluxuating a bit, so why not try to optimize it right before you apply for more credit. At that time, and only that time, try to get one credit card to report 1% - 9% and the rest of them report 0%. You have to figure out what date each card reports to the credit bureaus and pay off each cards just before that. For some credit cards that will be approximately the date that the new statements are created. For others it will be a different date (example: US Bank and ELAN cards report your balance near the last day of the month).

Its really as simple as that.

Re: How do I play the 1-9% Utilization Game. Please Help

Anonymous — Wed, 25 Sep 2013 19:07:45 GMT

@Themanwhocan wrote:
First you should realize that there are 2 groups that you are trying to impress, and they are to some extent complete opposites.

You want to impress the credit card companies. You want to show them that you have credit cards, that you are using them, and that you are paying them off regularily (ideally every month). These companies will decide if they want to loan you more of their money, and they are concerned with risk, and return on investments, etc. So usually for these companies you want to have your monthly charges report to the credit bureaus, then pay in full before you are charged any interest. And don't use too much of any one card, ie, don't rack the card up close to 100%, that can be interpreted as you are finding it difficult to meet your expenses, etc. Appearing desperate is never good.

The second group you want to impress is FICO. They generate a credit score. They don't loan you money, they don't care about your credit history. All they care about is the present moment, the current snap-shot of your credit risk. They will sum up your entire credit worthiness in the form of a number. And only a number.

So, when you want to 'play the game', remember that you are not just a number (except to FICO, and they don't give you a loan or a credit card, now do they?).

Most of the time, just use your card a reasonable amount, let it report, and immediately pay in full. Create that rich, robust credit report that the credit companies want to see. Sure they look at that Fico number, but thats not all they look at, so give them what they want.

As to the FICO score, why its always fluxuating a bit, so why not try to optimize it right before you apply for more credit. At that time, and only that time, try to get one credit card to report 1% - 9% and the rest of them report 0%. You have to figure out what date each card reports to the credit bureaus and pay off each cards just before that. For some credit cards that will be approximately the date that the new statements are created. For others it will be a different date (example: US Bank and ELAN cards report your balance near the last day of the month).

Its really as simple as that.

In a forum full of great information, this post is amazing. Super clear and concise and really explains a concept that many people could benefit from understanding. +100!

Re: How do I play the 1-9% Utilization Game. Please Help

SuperKirby — Wed, 25 Sep 2013 19:11:20 GMT

@Anonymous wrote:
@Themanwhocan wrote:
First you should realize that there are 2 groups that you are trying to impress, and they are to some extent complete opposites.

You want to impress the credit card companies. You want to show them that you have credit cards, that you are using them, and that you are paying them off regularily (ideally every month). These companies will decide if they want to loan you more of their money, and they are concerned with risk, and return on investments, etc. So usually for these companies you want to have your monthly charges report to the credit bureaus, then pay in full before you are charged any interest. And don't use too much of any one card, ie, don't rack the card up close to 100%, that can be interpreted as you are finding it difficult to meet your expenses, etc. Appearing desperate is never good.

The second group you want to impress is FICO. They generate a credit score. They don't loan you money, they don't care about your credit history. All they care about is the present moment, the current snap-shot of your credit risk. They will sum up your entire credit worthiness in the form of a number. And only a number.

So, when you want to 'play the game', remember that you are not just a number (except to FICO, and they don't give you a loan or a credit card, now do they?).

Most of the time, just use your card a reasonable amount, let it report, and immediately pay in full. Create that rich, robust credit report that the credit companies want to see. Sure they look at that Fico number, but thats not all they look at, so give them what they want.

As to the FICO score, why its always fluxuating a bit, so why not try to optimize it right before you apply for more credit. At that time, and only that time, try to get one credit card to report 1% - 9% and the rest of them report 0%. You have to figure out what date each card reports to the credit bureaus and pay off each cards just before that. For some credit cards that will be approximately the date that the new statements are created. For others it will be a different date (example: US Bank and ELAN cards report your balance near the last day of the month).

Its really as simple as that.

In a forum full of great information, this post is amazing. Super clear and concise and really explains a concept that many people could benefit from understanding. +100!

+101!

Re: How do I play the 1-9% Utilization Game. Please Help

JMills — Wed, 25 Sep 2013 20:06:41 GMT

Wow thank you so much. I understand it, I will see if I can change my due dates to be the same.

Re: How do I play the 1-9% Utilization Game. Please Help

myjourney — Wed, 25 Sep 2013 20:08:37 GMT

@JMills wrote:
Wow thank you so much. I understand it, I will see if I can change my due dates to be the same.

Good call

Re: How do I play the 1-9% Utilization Game. Please Help

masscredit — Thu, 26 Sep 2013 01:11:14 GMT

Very good summery!!!

Re: How do I play the 1-9% Utilization Game. Please Help

Themanwhocan — Fri, 10 Jan 2014 22:27:05 GMT

Bump

Re: How do I play the 1-9% Utilization Game. Please Help

Marcos8 — Sat, 11 Jan 2014 03:41:37 GMT

Since the statement cut date is usually a few days after the due date, why don't we just recommend paying XYZ by the due date? Seems easier...am I missing something?

Re: How do I play the 1-9% Utilization Game. Please Help

indiolatino61 — Sat, 11 Jan 2014 03:53:13 GMT

@Marcos8 wrote:
Since the statement cut date is usually a few days after the due date, why don't we just recommend paying XYZ by the due date? Seems easier...am I missing something?

You mean the due date only after you've paid before the closing date? If you pay before the due date, and a balance has reported, it will not be at 0% utilization even if you pay it in full at that time.

Re: How do I play the 1-9% Utilization Game. Please Help

Simply827 — Sat, 11 Jan 2014 03:53:39 GMT

@Marcos8 wrote:
Since the statement cut date is usually a few days after the due date, why don't we just recommend paying XYZ by the due date? Seems easier...am I missing something?

Sure, you can do that. But you also need to make sure you don't make any new charges that might post between the due date and the statement date.

Re: How do I play the 1-9% Utilization Game. Please Help

Marcos8 — Sat, 11 Jan 2014 03:57:35 GMT

@Simply827 wrote:
@Marcos8 wrote:
Since the statement cut date is usually a few days after the due date, why don't we just recommend paying XYZ by the due date? Seems easier...am I missing something?
Sure, you can do that. But you also need to make sure you don't make any new charges that might post between the due date and the statement date.

This is exactly what I do...pay whatever by the due date and then lay low for a few days until the next statement is generated.

Re: How do I play the 1-9% Utilization Game. Please Help

noobody — Sat, 11 Jan 2014 04:18:50 GMT

deleted

Re: How do I play the 1-9% Utilization Game. Please Help

noobody — Sat, 11 Jan 2014 04:17:26 GMT

Just want to confirm that 1-9% is against that particular credit card's credit line not the total available credit.

also does $1 reporting on 100K card still count as 1% because of the round UP?

and if you have US Bank's credit card, their reporting date is last day of the month, regardless the statement date or due date, so i just call them and move my statement date as close to end of month as possible for easier management.

Re: How do I play the 1-9% Utilization Game. Please Help

indiolatino61 — Sat, 11 Jan 2014 10:51:36 GMT

@noobody wrote:
Just want to confirm that 1-9% is against that particular credit card's credit line not the total available credit.

also does $1 reporting on 100K card still count as 1% because of the round UP?

and if you have US Bank's credit card, their reporting date is last day of the month, regardless the statement date or due date, so i just call them and move my statement date as close to end of month as possible for easier management.

Yes, it is 1-9% on that one card and the rounding up makes any balance equal 1% regardless of CL.

Re: How do I play the 1-9% Utilization Game. Please Help

Anonymous — Sat, 11 Jan 2014 13:37:24 GMT

@noobody wrote:
Just want to confirm that 1-9% is against that particular credit card's credit line not the total available credit.

also does $1 reporting on 100K card still count as 1% because of the round UP?

and if you have US Bank's credit card, their reporting date is last day of the month, regardless the statement date or due date, so i just call them and move my statement date as close to end of month as possible for easier management.

$1 would only be 0.001% utilization on a card with a limt of $100K 1% would be $1,000.

Re: How do I play the 1-9% Utilization Game. Please Help

noobody — Sat, 11 Jan 2014 17:29:18 GMT

@Anonymous wrote:
@noobody wrote:
Just want to confirm that 1-9% is against that particular credit card's credit line not the total available credit.

also does $1 reporting on 100K card still count as 1% because of the round UP?

and if you have US Bank's credit card, their reporting date is last day of the month, regardless the statement date or due date, so i just call them and move my statement date as close to end of month as possible for easier management.

$1 would only be 0.001% utilization on a card with a limt of $100K 1% would be $1,000.

well, that is my point:

There is math and there is FICO math,

Re: How do I play the 1-9% Utilization Game. Please Help

masscredit — Sun, 12 Jan 2014 00:10:42 GMT

@noobody wrote:
Just want to confirm that 1-9% is against that particular credit card's credit line not the total available credit.

also does $1 reporting on 100K card still count as 1% because of the round UP?

and if you have US Bank's credit card, their reporting date is last day of the month, regardless the statement date or due date, so i just call them and move my statement date as close to end of month as possible for easier management.

The 1-9% is against your total available credit.

Has anyone played with this number to see what works best for them? 2% might not generate the best scores. I'm wondering if some have found that their scores jumped up a few points with 7-8% reporting and went down with less than 5. Of course this could be a YMMV thing.

I've recently got into the mindset that I need to just have one card reporting, pay everything off before the due dates and have the lowest % reporting. As my limits have been increasing, my % has been going lower and lower. Now I have to make a conscious attempt to not pay as much on that one card but make sure I pay it off before the statement that it reports on closes so I can avoid paying interest unless it has a 0% financing offer.

Re: How do I play the 1-9% Utilization Game. Please Help

Themanwhocan — Sun, 30 Mar 2014 13:33:13 GMT

You want 1% - 9% usage on one card, of that one cards limit. The rest of the cards should report 0%.