Credit Card Usage = Lower FICO score?

[Anonymous]

Hello, 

I have had a score watch account for 2 years now and I am still confused. My score was increasing, and all was well. I got a CC from Cap One and pay it off each month. My primary spending is through my check card and this Cap One CC.  But I just got a score watch saying that my I have had an increase in spending on my account which looks like I am a risk to my lenders? It went from 0$ when it was last reported to ~400$ (which has already been paid off in full). But that dropped my score down by 30 points. So am I never suppose to use my card? I am not sure why just using my card gives me a negative score. I have never been late and pay off the entire balance in full every month. It also reported this as 2 accounts even though it is just one.

Please Help.

Ivan

[john398]

It will go up again when it reports a lower amount, yes utilization is a big part of your fico score, the key is to have it reporting the lowest amt possible every month but there is no history on util

[Anonymous]

does it pull on a certain date?

[mauve]

Reported balance is updated about once a month, usually a little after the statement cuts.  When it reports is dependent on the individual card's reporting policy - HSBC, for instance, apparently reports at the end of the month regardless of when the statement cuts.  Don't forget to reset your target score to the current one so you see the next fluctuation.  I think my Capital One card reports a few days after the new statement.

[john398]

Yes I belive when the statement cuts is when they update the cra and takes a couple of days to show up for Capital One

[Anonymous]

I am sorry, I am still trying to figure this all out. Credit scores seem like a scam to me... I mean I understand why they are used I just think the idea of living life in debt is not the way to financial security. 

How do I reset my target score to the current one? As well am I not suppose to have a balance on my CC accounts? I would like a 700 score and I was at 690 until today now I am back to 650's. It seems I work so hard to get my score up then when I use my card as the lender intends I get penalized? 

I am just trying to understand how to play this game? Is there some tutorial for all of this? I seem to be doing things right but I am still behind the game. I went to school, borrowed a ton of money, graduated paid 75% of the loans off on my first payment. Got a good job, make a decent amount of money, pay my bills on time and my CC in full each month. Yet my score goes down? I feel like I missed the class on "how to play the credit game" and/or "You are going to need to borrow money to buy a house, but since you have never used a credit card before you might be a risk despite never having a negative standing" and/or "give the bank all of your money who then buy/sell bad loans lose all of your money then repay them through taxes to make sure they can take your money later"

Sorry for the vent. This just seems like a game that is setup for us to lose and 'them' to profit. 

[GregB]

Virtually ALL credit cards report the statement balance. They update to the Credit Reporting Agencies, some almost instantly. Chase seems to be taking a day recently but used to be quick. Capital One reports a day or so later. Amex can take a couple of days to a couple of weeks, sometimes skipping that month completely. The CRAs take different amounts of time to update. EX updates almost instantly, EQ and TU take a few days to a week.

I can schedule an online payment for BofA on the statement date. The next morning EX is already reporting the new statement balance. EQ and TU follow a few days later but show that the amount was updated the same date they received the data.

I have heard of a few companies like HSBC that report on a weird date like the end of the month but have never seen that with the 7-8 different companies whose cards I use.

[Anonymous]

Is it better to pay off the card in full or to keep a small balance?

[GregB]

If you have one CC and going from a $0 balance to ~$400 made your score drop, you only need to have it report $0 balance on your next statement to get the score back. If/when your credit limit is increase, the drop for a reported $400 balance will be less.

It seems it is best to have all cards report $0 but have one report a balance under 10% of the credit limit. If you have just one card, then I don't know. I'm guessing that $0 and less than 10% of the limit would be very similar scores.

[Anonymous]

Let small balance report  5-7% if remember right.  I let 1% or less report, but pay off before due date.

It's the same for me for not using my Credit Cards. I've reached  the 800's and if let 1 to 5% report score stays the same, but let them report zero and I lose 10 -20 points. My EQ was 803 or 806 last month messed up payed off early score this month is 794.