topic Re: What utilization % should I aim for on my secured card ? in Rebuilding Your Credit

What utilization % should I aim for on my secured card ?

BM1990 — Wed, 16 Jun 2021 23:07:34 GMT

What's an optimal utilization percentage for a secured card ? I'm trying to maximize this cards potential for the highest score increases possible !

Re: What utilization % should I aim for on my secured card ?

Red1Blue — Wed, 16 Jun 2021 23:27:03 GMT

Secured or unsecured same method is used for the scoring. I think it is better to keep it under 20-30%. Others might chime in.

Re: What utilization % should I aim for on my secured card ?

Creditguymke — Thu, 17 Jun 2021 04:20:06 GMT

To maximize your data points pay the card before the report date making sure it's under 10% . Under 30% is cool but if you want to maximize your points I say stay below 10 if you can

Re: What utilization % should I aim for on my secured card ?

Anonymous — Thu, 17 Jun 2021 08:22:53 GMT

Hi last year i started Building/Reparing my credit as i had no credit history and 3 collections on my report. I started with the Capital One Secured Card with a $401 limit i kept my utilization between 1 - 3% ive honestly seen the biggest gains keeping it super low. I know it may be difficult to not spend more than that when you dont have the cash on hand but it will benefit you in the long run once you are able to get Unsecured Cards with higher limits. It was my first credit card August 2020 my scores where between 524 - 560 after paying of one collection for removal and adding self installmen loan while staying at 1 - 3% utilization i was able to get my Fico scores up into the 650's in less than 6 months. Im in the low 700's now with 2 Navy Federal CC's one at $20k and $13.1k and i keep my utilization now under 5%.

Re: What utilization % should I aim for on my secured card ?

OmarGB9 — Thu, 17 Jun 2021 18:17:10 GMT

You can use it and take it up to as high of a utilization as you want (without going over the limit, of course). What matters is what is reported to the bureaus at statement cut. So to control that, you need to know when your billing cycle ends and be sure to pay down your card to under 30% (but ideally under 10%, if you can) of the card's limit prior to that cycle end date. This, along with keeping all of your other credit cards at zero will allow you to implement AZEO, which is used to maximize scores, but can be tedious to maintain every month.

Re: What utilization % should I aim for on my secured card ?

Horseshoez — Thu, 17 Jun 2021 18:27:21 GMT

@BM1990 wrote:
What's an optimal utilization percentage for a secured card ? I'm trying to maximize this cards potential for the highest score increases possible !

As @OmarGB9 stated, you can go all of the way to 100% utilization, you can even max the card several times per statement cycle; what is important is how much utilization is current on your card when the statement is cut and/or when your credit card issuer reports. Last year I opened up a secured TDCash card with a $5,000 limit; for the six months that card was secured I charged between $2,500 and $4,500 per month, and paid in full immediately before the due date, and then let a few charges trickle in between my payment and the statement cut date; using my card in this manner allowed my scores to rise to the point were I was able to land two new unsecured cards with a total additional credit limit of $9,000.

Re: What utilization % should I aim for on my secured card ?

MichWolverines1983 — Thu, 17 Jun 2021 20:22:21 GMT

I have had the Capital One Secured Card ($200 credit limit)now for four months. I only have one collection (medical bill that is about to be paid) and started with a Vantage Score of 524. I am now at 599. I kept my utilization ratio at 10% the first three months and now am at 5%. I literally only use the card once a month now for only $10 at the gas station. Still waiting for my FICO score. I should have one in two months.

Re: What utilization % should I aim for on my secured card ?

Nikita2008 — Sat, 19 Jun 2021 00:42:24 GMT

2-7%

Re: What utilization % should I aim for on my secured card ?

Nikita2008 — Sat, 19 Jun 2021 00:44:35 GMT

I sometimes have maxed low limit cards more than once in a cycle. The key is in knowing your due dates and cyle dates which are not always the same, and only letting low balances report.

Re: What utilization % should I aim for on my secured card ?

Anonymous — Sun, 20 Jun 2021 12:27:12 GMT

Good morning, crew!

This is a really good question. And, I believe that the answer is the same for either secured or "normal" credit cards. Aka, revolver. I do not believe that there is any distinction from the perspective of the Credit Reporting Agencies (among others, Transunion, Experian, and Equifax).

Credit Utilization is a HUGE part of the FICO scoring model. It accounts for 30% of the score (with Payment History at 35% these two 'categories' make up essentially 2/3 of your FICO score).

The standard answer is to keep things under 30% - in general.

But how does one keep the utilization under 30% (or, any % for that matter). In other words, how is the "utilization" determined?

Please understand that I am not assuming that you - or anyone else - does not know this but I believe that we sometimes overlook the obvious (and I am indeed the real 'Captain Obvious') so I will - as best I can - explain how this "30%" is determined.

Going to restrict this to Credit Cards. Auto Loans and Home Loans (aka, Installment Loans) do not apply here.

So, if you have a credit card with Company XYZ there are several important dates assoicated with that credit card:

1. Date opened

2. Payment Due Date

3. Billing Cycle Close Date (has potentially several other names....Statement Summary Period is another one).

It is the balance on your credit card on the "Billing Cycle Close Date" that is reported to each of the three CRAs (Credit Reporting Agencies, aka, Transunion, Experian, Equifax).

So, if you have a Credit Card with a $1,000 available credit limit and your Billing Cycle Close Date is June 25th, 2021 (read: the 25th of each month) then whatever the balance on said card is on the 25th is what is reported. THAT balance is what determines your Credit Utilization for that Credit Card for that month (please note that there are a few other 'situations/events' that will result in a CRA reporting your balance but for general conversation, it is the Billing Cycle Close Date that drives this).

Please note that Billing Cycle Close Date *IS NOT* the same thing as the "Payment Due Date". These are two very different things.

Whether said Credit Card is secured or not is of no consequence (in this point).

Typically, for an even better credit score I have read/seen that below 10% is best. And - this is where my inexperience shines brightly - by "below 10%" I want to say actually under 9.3%. Unless I am totally off-base with this, there is a 'rounding' consideration involved (but I have no details on that....sorry).

I hope that this helps.

Re: What utilization % should I aim for on my secured card ?

FireMedic1 — Sun, 20 Jun 2021 12:59:16 GMT

@BM1990 wrote:
What's an optimal utilization percentage for a secured card ? I'm trying to maximize this cards potential for the highest score increases possible !

I'll go a different route. Use of the card increases scores if you have at least 3 revolvers and only one of them report a balance of <8.99% monthly. As we say here AZEO. All Zero Except One. You can use all 3 cards or one card all you want. Come before statement cut date. Pay the one or one out of however many cards you have down below 8.99%. Wait for the statement. Pay it off and start the cycle over again. Some companies like to see usage for when it comes to CLI's. So using them has no percentage calculation nor as you posted potential for the highest score. Its whats reported on a monthly basis. And of course no lates. Time is what increases scores coming out of the rebuilders stage and how you use the cards.