topic Re: Not understanding cc utilization trick in Rebuilding Your Credit

Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 10:23:39 GMT

Okay so far for my credit rebuild I started a capital one card with 200 dollars but I recently added another one hundred giving it a 300 dollar balance. I always pay this card to 0 and not 10 percent because I'm not exactly sure how to do it I don't know when my statement date is I just know my due date is the 6th of every month..... I also started a fingerhut account and that will always be paid on time... in 2 weeks I'll be opening an open sky secured credit card for 300 as well. Am I on track for a good turnaround? My collections will not offer a pay for deletion sadly

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 11:12:35 GMT

Yes, you are on track. Good job so far.

Re: Not understanding cc utilization trick

juniornj23 — Thu, 28 May 2015 12:16:52 GMT

My also cut at 6 every moth so here is what I do pay off on the 5 then on the 8 charge 5% of your credit doing this will raise your credit score fast also you can make 3x payment so they see you really need more money and they will increase your credit

Re: Not understanding cc utilization trick

seruby — Thu, 28 May 2015 12:27:42 GMT

@Anonymous wrote:
Okay so far for my credit rebuild I started a capital one card with 200 dollars but I recently added another one hundred giving it a 300 dollar balance. I always pay this card to 0 and not 10 percent because I'm not exactly sure how to do it I don't know when my statement date is I just know my due date is the 6th of every month..... I also started a fingerhut account and that will always be paid on time... in 2 weeks I'll be opening an open sky secured credit card for 300 as well. Am I on track for a good turnaround? My collections will not offer a pay for deletion sadly

Your statement date is typically a few days after your due date. If you look at your statements online, they should all have a statement date. I know with capital one, you don't even have to open the statement. If you log in and go to Accounts->Statements and Documents, it'll say "Monthly Statement" then have the date next to it. It's typically the same date every month (like capital one does - always the 21st for me), but some companies (like Merrick Bank) have it around the same time frame - for me, sometimes it's the 23rd, sometimes it's the 22nd.

If your due date is the 96th, I would guess your statement date would be the 9th or 10th.

Also, once you pay it down to <10%, don't start using it until you login to capital one and you see the "Due Date" has jumped to the next month. That's your assurance that the statement has been cut, even if you cant' see it online yet. Since I know my statement date is the 17th, I log in on the 17th and 18th (and if need be, 19th) to check before I start using the card.

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 12:34:52 GMT

Okay so my due date is the 6th you're telling me to pay it all on the 6th and since my last statement was the 9th my statement date is probably the 9th... just charge 5 percent of my credit limit on the 8th??

Re: Not understanding cc utilization trick

seruby — Thu, 28 May 2015 12:51:06 GMT

@Anonymous wrote:
Okay so my due date is the 6th you're telling me to pay it all on the 6th and since my last statement was the 9th my statement date is probably the 9th... just charge 5 percent of my credit limit on the 8th??

Not quite. If you charge something on the 8th, it may not post to the account by the 9th.

Your due date is the 6th - by this date, pay off the statement balance. This way you don't get charged interest. Any new charges won't have to be paid off until the following month. Before the 9th, pay down the current balance leaving only 5% on it.

Example:

May 27th statement: Balance: $200 Due Date: 6/24

New Purchases after May 27th: $300

Current Balance on 6/22 (assuming no payments made): $500

By June 22(I say the 22rd because you always want to give time for the payment to post), you want to pay off that $200 statement balance, so you don't get charged interest the next month. By June 25th (again, giving time for payment to post), you want to pay off 90-99% of the $300 new purchases you made. Then leave it until you see the Due Date online change to "July 24th."

The due date is just the date to pay your previous balance by to avoid interest. You don't have to pay off your full current balance by the due date, just the previous statement balance.

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 13:25:36 GMT

If you register online with Capital One so you can see your account, the due date and the statement date will be shown right on the account summary page. Register your bank account as well so you can do online payments.

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 13:34:20 GMT

Okay so I'll pay off my full balance on the 6th and then I'll charge 5 percent is this correct? or instead of paying in full know the 6th should I pay until I'm at 5 percent utilization haha sorry speak to me as a credit card beginner

Re: Not understanding cc utilization trick

seruby — Thu, 28 May 2015 13:42:47 GMT

Yea, you can do it one of 2 ways:

1) Pay in full by the 6th, charge 5% on the 7th to get posted on the 9th.

2) Pay all but 5% of current balance by the 8th (as long as your statement balance is fully paid).

I personaly prefer option 2, because I'll know the charges have been posted, so it's more likely than not that it'll show 5%. If you go with option 1, you run the risk of a charge not posting in time (i.e. sometimes if you pay gas with a card, it doesn't post until about 4 days later), and having a 0% reporting. But each person is different so you have to go with what you're more comfortable with.

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 13:47:36 GMT

Isn't my statement balance the same as my current balance? ? For option 2 you said pay all but 5 percent of my current balance okay I can do that on the 8th but my bill is due on the 6th won't that charge interest option one seems easier and less risky if I pay in full o the 6th then on the 7th charge five percent I just won't do it with gas I'll go to the grocery store

Re: Not understanding cc utilization trick

seruby — Thu, 28 May 2015 14:01:27 GMT

@Anonymous wrote:
Isn't my statement balance the same as my current balance? ? For option 2 you said pay all but 5 percent of my current balance okay I can do that on the 8th but my bill is due on the 6th won't that charge interest option one seems easier and less risky if I pay in full o the 6th then on the 7th charge five percent I just won't do it with gas I'll go to the grocery store

Not necessarily. It would only be the same if you don't make any new charges or payments. Your statement balance is whatever your balance was on the statement date of the previous month, and your current balance is whatever is owed including all new charges and payments.

So using my example from above, your statement balance would be $200. That's not going to change until the next statement. That's the amount that has to be paid by the due date to avoid interest.

If you charged $300 after your statement posts, your current balance would be $500, but your statement balance would still be $200. If you paid off $400, your current balance would be $100, but your statement balance would still be $200.

It's a bit tricky at first. But think of it like "Statement Balance = The amount I owed on the 27th." This number isn't going to change because the 27th has passed. "Current Balance = The amount I owe now" This number will change with new charges and payments.

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 14:06:05 GMT

You have absolutely confused me now lol okay look my balance due on the 6th is 200 my last statement was 5/9 so I guess my statements are on the 9th of each month can i just pay 200 on the 6th and then charge 5 percent of my total limit on the 7th and be safe??? Or can I just pay the 200 down to 5 percent of my total limit and be safe??? Will both of these do what you guys are telling me to do lol

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 14:18:30 GMT

@Anonymous wrote:
Isn't my statement balance the same as my current balance? ? For option 2 you said pay all but 5 percent of my current balance okay I can do that on the 8th but my bill is due on the 6th won't that charge interest option one seems easier and less risky if I pay in full o the 6th then on the 7th charge five percent I just won't do it with gas I'll go to the grocery store

No. "Statement balance" is the amount of charges you had (minus payments made) on the last statement date (May 9th for your card). "Current balance" is what you have charged *right now*.

Capital One gives you a 27 day "grace period" during which if you make payments totaling the last statement balance, there will be no interest charges. For Example:

Lets say on May 9, your last statement date, your balance was $100. You will have a minmum payment of $25 due by June 6 to avoid a late charge. If thats all you pay, you will be charged interest on the other $75. If you make at least $100 in payments before June 6, you will not be charged interest. Your statement balance of $100 is what will be reported to the bureaus for your UTI, within a few days of May 9.

OK, so lets say you want to avoid interest and optimize your UTI for June. You would want to make a $100 payment any time after May 9th, but prior to June 6th. Then on June 8th, the day before the next statement closes, you would want to pay all but $15 or so, of whatever the current balance is on that day.

As I said earlier, you need to register at the capital one website for online account management to do this.

Re: Not understanding cc utilization trick

Anonymous — Thu, 28 May 2015 14:22:13 GMT

@Anonymous wrote:
You have absolutely confused me now lol okay look my balance due on the 6th is 200 my last statement was 5/9 so I guess my statements are on the 9th of each month can i just pay 200 on the 6th and then charge 5 percent of my total limit on the 7th and be safe??? Or can I just pay the 200 down to 5 percent of my total limit and be safe??? Will both of these do what you guys are telling me to do lol

I must stress here - do NOT rely on your mailed statements for managing UTI. You absolutely MUST register for online account management, and make all payments online. I have not even opened a mailed statement in ages. They just go straight into the trash.

Re: Not understanding cc utilization trick

Anonymous — Fri, 29 May 2015 10:05:44 GMT

@Anonymous wrote:
@Anonymous wrote:
You have absolutely confused me now lol okay look my balance due on the 6th is 200 my last statement was 5/9 so I guess my statements are on the 9th of each month can i just pay 200 on the 6th and then charge 5 percent of my total limit on the 7th and be safe??? Or can I just pay the 200 down to 5 percent of my total limit and be safe??? Will both of these do what you guys are telling me to do lol
I must stress here - do NOT rely on your mailed statements for managing UTI. You absolutely MUST register for online account management, and make all payments online. I have not even opened a mailed statement in ages. They just go straight into the trash.

Okay I am now registered online current balance is 223, I lost my debit card so i had to pay a couple things on credit... Minimum payment says 0 dollars due june 6th, available is like $76, last statement balance is 0 dollars as of may 9th since i paid in full.

So after taking a closer look every statement is on the 9th 3/9, 4/9 and 5/9 and my due date is june 6th it says minimum payment is $0 Idk why...So now that we have the actual numbers and dates... How do I go about this credit utilization trick? I was thinking paying in full the 223 On june 6th and then charging 15 dollars on the 7th so on the 9th for my statement it will show 15 dollars instead of 0 is this what I should do??? Or should I pay the 223 down to 15 dollars on the 6th?? Enlighten me thanks (Reminder I am a credit beginner lol this is all very new to me) Sorry for asking a billion questions you guys and girls are very helpful though

Re: Not understanding cc utilization trick

Anonymous — Fri, 29 May 2015 10:08:23 GMT

Also not sure if this matters but when i open up my 5/9 statement to look at it it shows this

Previous balance: 0 - Payments and credits: 196 + Fees and interest: 0 + Transactions 196 = New balance of 0

Re: Not understanding cc utilization trick

seruby — Fri, 29 May 2015 11:56:53 GMT

@Anonymous wrote:
ay I am now registered online current balance is 223, I lost my debit card so i had to pay a couple things on credit... Minimum payment says 0 dollars due june 6th, available is like $76, last statement balance is 0 dollars as of may 9th since i paid in full.
So after taking a closer look every statement is on the 9th 3/9, 4/9 and 5/9 and my due date is june 6th it says minimum payment is $0 Idk why...So now that we have the actual numbers and dates... How do I go about this credit utilization trick? I was thinking paying in full the 223 On june 6th and then charging 15 dollars on the 7th so on the 9th for my statement it will show 15 dollars instead of 0 is this what I should do??? Or should I pay the 223 down to 15 dollars on the 6th?? Enlighten me thanks (Reminder I am a credit beginner lol this is all very new to me) Sorry for asking a billion questions you guys and girls are very helpful though

You've got a grasp on it.

Last statement balance of 0 is indeed because you owed nothing on 5/9. Since your statement balance is $0, you don't have to worry about being charged interest. I would personally pay down the $223 to $15. As I said before, I prefer this method because I don't have to worry about something not posting on time. Since you have no minimum payment on your previous balance ($0), you don't have to pay it down by the 6th: You just have to make sure it's paid by the 9th. However, you can definitely pay it by the 6th and not use the card until the 10th if that makes you feel more comfortable.

Re: Not understanding cc utilization trick

Anonymous — Fri, 29 May 2015 12:01:47 GMT

Okay great so I'll pay that down to 15 on the 6th! So my utilization will only be 5 percent on my statement and I will do this every month from now on with this card. This will benefit me more then paying it to zero right

Re: Not understanding cc utilization trick

seruby — Fri, 29 May 2015 12:17:02 GMT

Correct! See, you've got it. So what you'll do on your next statement, since you're statement balance will be $15, is pay that $15 immediately (like the 11th or 12th - basically once you see it the due date change online) so it's out of the way and you won't have to worry about interest or being late. Again, this is just something I do to be safe, but not really required. Then on July 6th, pay your current balance down to $15 just like you're going to do on June 6th.

And remember, you don't have to stay at 5%. Just keep it under 10%. Having a steady number is good though since it helps with budgeting.

Re: Not understanding cc utilization trick

Anonymous — Fri, 29 May 2015 14:40:33 GMT

@Anonymous wrote:
So after taking a closer look every statement is on the 9th 3/9, 4/9 and 5/9 and my due date is june 6th it says minimum payment is $0 Idk why...So now that we have the actual numbers and dates... How do I go about this credit utilization trick? I was thinking paying in full the 223 On june 6th and then charging 15 dollars on the 7th so on the 9th for my statement it will show 15 dollars instead of 0 is this what I should do??? Or should I pay the 223 down to 15 dollars on the 6th?? Enlighten me thanks (Reminder I am a credit beginner lol this is all very new to me) Sorry for asking a billion questions you guys and girls are very helpful though

Yes, with Cap One your statement date will always be the same day of the month.

Either of those methods will work just fine for you. As long as your account shows that small balance on the 9th, any method that achieves that is good.