topic Re: Question regarding utilization on new card in Rebuilding Your Credit

Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 02:50:42 GMT

Long sob story here, that I won't torture you all withthe entire thing (just a little of it).

I am now starting my entire life and credit over, at 55 years old after losing my home last month. I am trying to start working on repairing my awful credit immediately, since I am not getting any younger and the foreclosure hit on my credit, combined with the fact that since my husband died, I closed all credit cards, had several charge offs I ignored since I stuck my head in the sand after he died. Now, I have charges offs, a foreclosure, and no open credit lines at 55. Oy. And a possible deficiency judgement of 57,000 which means I may even be filing BK on top of everything else in the very near future.

No ones fault buy my own, but I am putting on my big girl panties and trying to get my act together finally. Its been 4 years, I have pouted enough.

SOOO.......

1st step, I have received a Cap One secured CC with 200.00 limit (don't laugh)

1st Premier with 300.00 limit. (again, I know, but I have to start over somewhere)

I understand that I am to make sure one reports at zero, and one at 9% of CL.

My question is, for example, can I charge 200 on the Cap one, and pay it in full before the statement date? Or should I ONLY be charging 9% tops?

I don't plan to use the cards for much, but then I thought, hey, I have to pay utilities each month anyway, why not use the card to pay them, then pay the card off. Its money I would have to spend anyway, so I don't think (I may be wrong) that I would be using the cards for unnecessary items, just playing with the way I pay my bills going forward. Or at least for the next several years till I crawl out of this hole.

Also, If I used this method, would the payment need to be made before the statement date in order for it to show low utilization, or before the due date, that is something that I am not certain on to make it report in a positive manner on my CR.

Any help would be appreciated...thanks!

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:02:36 GMT

I doubt any of us will be laughing at those TLs here: we've *all* been there! If your CL is $200 then set yourself a safety stop and only use it up to $190 or so - it's up to you! Then pay it down. Yes, a rule of thumb is anywhere from 3% - 9% UTIL seems to be what FICO likes but UTIL is not about how much you've placed on the card during the entire month rather, only what was reported. With that in mind you need to determine your cut-date also known as the "statement date". Take a look at your monthly bill and you should find the "statement date" or similar. CCCs will typically report wthe balance as of that date or very soon thereafter or before.

Find the statement date (phone them up if you need) and make sure to make your payment so that it will post within 3-5 prior. Then set that card to the side and don't touch it (other than additional payments) until *after* you have the new statement. That is the important date. But remember, you will also have a minimum due on a "due date" that you must meet as well otherwise you could end up with a baddie.

Example: My CapOne Secured Card cuts each month on the 15th ... "statement date" as listed on the monthly bill. It gives the balance as of that date which means I always make sure to get the UTIL down by the 10th or 11th at latest. Then I sock-drawer it until the invoice is ready. Then, it gives me a $10 minimum or whathaveyou due by the 10th or so. I make sure to pay that amount by the due date. Make sense? Pay before the statement date down to a good UTIL and always make your minimums on time and you should begin seeing your score grow as the account ages.

I ceratinly hope I made sense ...

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 03:05:36 GMT

Thank you so much. So pay before the statement date, and then pay again before the due date and I should be good is what I take away from that. Makes sense, I appreciate it. Wish me luck! Its gonna be a long slow crawl to the 600's, then maybe before I die, the 700 club.

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:07:14 GMT

Oh ... I meant to add: you could certainly use a card as much as you are comfortable with during a given billng period. Say you have a $200 limit - I've read of people spending $1000 per month on a CL that size - they simply pay the charge off as soon as it posts thereby freeing up the CL. Now I am not recommending this or NOT recommending this - it is up to you. It would be seen as heavy usage by the CCC and from what I hear some of them very much like that after all, they get paid every time you use the card. Again ... imprtant: low UTIL should report ... and always pay on time

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 03:09:29 GMT

Hmmm. So, I could pay my electric bill with it. Pay Cap one. Then pay my gas bill with it, pay cap one, just make sure its at 9% before statement date and stays there until after statement date. I may test it and see how it goes. I look at it this way, I have to pay those bills anyway, might as well use the card and make it work for me. Thanks again!

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:09:40 GMT

@missionpossible wrote:
Thank you so much. So pay before the statement date, and then pay again before the due date and I should be good is what I take away from that. Makes sense, I appreciate it. Wish me luck! Its gonna be a long slow crawl to the 600's, then maybe before I die, the 700 club.

You'll be just fine! I started far below you and I know my score had reached even lower than when I started say ... the upper 400's. Now, I pushing 650 in under a year! You'll get there! And if you need a little nudge along the way I've found these guys here in the FICO forest are awesome at keeping your spirits up

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:12:24 GMT

@missionpossible wrote:
Hmmm. So, I could pay my electric bill with it. Pay Cap one. Then pay my gas bill with it, pay cap one, just make sure its at 9% before statement date and stays there until after statement date. I may test it and see how it goes. I look at it this way, I have to pay those bills anyway, might as well use the card and make it work for me. Thanks again!

That's how I use my Amex Oasis ... pay my regular monthly items, wait for it to post, make an online payment for the amount, continue. I created a Google Calendar with the pertinent dates to remind myself so that I'll not miss anything. Between that and Quicken I have beeps coming at me every few days to keep me on my toes. But that's just my own way to shuffle on through this madness.

Re: Question regarding utilization on new card

kroberts67 — Thu, 21 Mar 2013 03:13:20 GMT

This part confuses me but I think I've been doing it right. I pay by the due date and then don't use it again until after statement cuts, which is a few days after the due date. The way people talk about the statement cut date is confusing to me so I kind of look at it as one & the same as long as I don't use the card until after the statement cut date (a few days after the due date). In this case, if it's paid by the due date I'm safe?

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 03:13:30 GMT

Aw, thanks. Problem is, that fico is from 3/13/2013. I'm not sure that all the horrid reporting has actually hit the reports yet. Foreclosure shows, but as of Jan. Have to see what happens in the next few months, and like I said, I may even be filing BK in the next month, so between the foreclosure and BK, I may end up much lower, or, maybe not. I have no idea really where I stand right now. That is why I am trying to bounce back as quick as possible. Now to work on my C/O's, hoping that will help a little. Don't really owe much, that is what is sad. Its time for me to get to work on getting all the baddies fixed that I can!

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 03:17:03 GMT

That sounds like a plan I will try.

Amex. Now that would be something, I would know that I did it right if I ever had an Amex. Dreaming, I think.

@Anonymous wrote:
@missionpossible wrote:
Hmmm. So, I could pay my electric bill with it. Pay Cap one. Then pay my gas bill with it, pay cap one, just make sure its at 9% before statement date and stays there until after statement date. I may test it and see how it goes. I look at it this way, I have to pay those bills anyway, might as well use the card and make it work for me. Thanks again!
That's how I use my Amex Oasis ... pay my regular monthly items, wait for it to post, make an online payment for the amount, continue. I created a Google Calendar with the pertinent dates to remind myself so that I'll not miss anything. Between that and Quicken I have beeps coming at me every few days to keep me on my toes. But that's just my own way to shuffle on through this madness.

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:25:15 GMT

@kroberts67 wrote:
This part confuses me but I think I've been doing it right. I pay by the due date and then don't use it again until after statement cuts, which is a few days after the due date. The way people talk about the statement cut date is confusing to me so I kind of look at it as one & the same as long as I don't use the card until after the statement cut date (a few days after the due date). In this case, if it's paid by the due date I'm safe?

No. Look at this way: on what date do they print your statement? That would be (or shortly thereafter) your "statement cut date". Cut Date and Print Date are typically one and the same or at the most a few days off. Look on your online account for your last statement/invoice. Find the date on that invoice. *That* will usually be the date that you need to beat by 3-5 days or so with the UTIL ... Example:

March 1 - CCC reports your current balance to the CRs

March 1 or 2 - CCC prints your new statement/invoice and mails it, emails it, etc to you

--- The statement/invoice says "Minimum balance due by March 25"

March 25 - Due date

In this example you want your UTIL to be below that 10% mark by April 31 (day before). Spend as you need during the entire billing cycle but make sure those two dates are foremost in your mind. I believe with the last credit card act the due date will always be the same every month - a mod or more experienced could verify - and if so, that should make it easy to mark on the calendar. Also, ring up the CCC and ask what the statement date is each month. They'll be happy to tell you.

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:31:23 GMT

@missionpossible wrote:
Aw, thanks. Problem is, that fico is from 3/13/2013. I'm not sure that all the horrid reporting has actually hit the reports yet. Foreclosure shows, but as of Jan. Have to see what happens in the next few months, and like I said, I may even be filing BK in the next month, so between the foreclosure and BK, I may end up much lower, or, maybe not. I have no idea really where I stand right now. That is why I am trying to bounce back as quick as possible. Now to work on my C/O's, hoping that will help a little. Don't really owe much, that is what is sad. Its time for me to get to work on getting all the baddies fixed that I can!

Ah yes. Well this will certainly be a personal challenge that I am sure you'll overcome in time. I knoiw it's been rough - I do understand. As far as questions regarding BK theres another board on here devoted to that. I suggest hopping over there to see if they could offer advice on that topic. As for the COs, etc ... PFDs (Pay For Delete) and GWs (GoodWill letters) will be your friend. Take a look at this item for details on those: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/What-Steps-Do-I-Take-Do-I-DV-PFD/td-p/337142 - it certainly helped me out quite a bit in undersatanding all this. It can be very confusing at first but it will soon begin to simply *click*. Again, check out the BK forum for details too: http://ficoforums.myfico.com/t5/Bankruptcy/bd-p/bankruptcy They may be able to offer a great more of advice for your specific situation.

Meanwhile, welcome to the gang and do definitely keep us posted on how things are going!

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 03:38:40 GMT

@Anonymous wrote:
@missionpossible wrote:
Aw, thanks. Problem is, that fico is from 3/13/2013. I'm not sure that all the horrid reporting has actually hit the reports yet. Foreclosure shows, but as of Jan. Have to see what happens in the next few months, and like I said, I may even be filing BK in the next month, so between the foreclosure and BK, I may end up much lower, or, maybe not. I have no idea really where I stand right now. That is why I am trying to bounce back as quick as possible. Now to work on my C/O's, hoping that will help a little. Don't really owe much, that is what is sad. Its time for me to get to work on getting all the baddies fixed that I can!
Ah yes. Well this will certainly be a personal challenge that I am sure you'll overcome in time. I knoiw it's been rough - I do understand. As far as questions regarding BK theres another board on here devoted to that. I suggest hopping over there to see if they could offer advice on that topic. As for the COs, etc ... PFDs (Pay For Delete) and GWs (GoodWill letters) will be your friend. Take a look at this item for details on those: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/What-Steps-Do-I-Take-Do-I-DV-PFD/td-p/337142 - it certainly helped me out quite a bit in undersatanding all this. It can be very confusing at first but it will soon begin to simply *click*. Again, check out the BK forum for details too: http://ficoforums.myfico.com/t5/Bankruptcy/bd-p/bankruptcy They may be able to offer a great more of advice for your specific situation.

Meanwhile, welcome to the gang and do definitely keep us posted on how things are going!

Thanks so much, you have been very helpful

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:43:13 GMT

That's what we're here for - to help one another!

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 03:44:27 GMT

@Anonymous wrote:
That's what we're here for!

There is only one bad thing about this forum. It is far more addicting than Facebook was. I am addicted to it. Although the time I spend here is actually quality time, whereas FB, not so much

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:45:37 GMT

I was *just* telling someone that today! Too Funny!!! Glad I'm not the only one

Re: Question regarding utilization on new card

Anonymous — Thu, 21 Mar 2013 03:58:12 GMT

No rules is 3-9% util. 1-9% util to help you max your scores plus responsible to another lender when they pull your credit. You can pay 100 times.Don't let it report too high util on your CR because it will drop your scores down.

Re: Question regarding utilization on new card

DaBears — Thu, 21 Mar 2013 04:09:54 GMT

^5, here you learn something everyday!!! Welcome to the forums!!!

Re: Question regarding utilization on new card

DaBears — Thu, 21 Mar 2013 04:12:41 GMT

There is no rule. 1-9% util is the avrg. each person needs to change it per month to see where there sweet spot is at.

Re: Question regarding utilization on new card

missionpossible — Thu, 21 Mar 2013 04:13:46 GMT

@DaBears wrote:
^5, here you learn something everyday!!! Welcome to the forums!!!

Thanks! I am assuming since your name is DaBears, you are in Chicago or Burbs. Me too. Go Bears! I love this forum, wish I would have found it 4 years ago!