Hi Camden! So you want your balances to post as being low (less than 10% of you entire credit available), however you want to pay the balance in full, and make sure your new balance will be follow the same rule as the old balance.
Example for a hypothetical 1000 dollar credit limit card:
- I spend 10 dollars (Closing date is in 5 days).
- My balance posts after the 5 days and I pay the 10 dollars.
- The next day I spend 11 dollars. My closing date is in 25 days.
- After 25 days, my new bill posts, I pay the 11 dollars. and now start creating a new balance to post.
Hope my silly example helps you! Let me know if you have any questions.
@Anonymous wrote:Hey there! First post but long time lurker here. I've tried to search for answers but I feel like it varies from each person. I just recently got my first credit card and I'm just trying to figure out when I need to pay to make sure it reports the low util. My first statement has a date of 12/29/2014 and a due date of 1/25/2015. I noticed when I pulled my credit report that it reported to the agencies on 12/29 for the first time. Basically, as long as I pay my bill on time and keep the balance low untill after the 29th it will report good? Since my due date is on the 25th.
thank you!
Hi Camden88,
Welcome to the forum.. YOu got it almost right. See on the 29th of each month, it looks like that is your statement cut off date. Which means, whatever the balance is on THAT date, that is going to be reported to the Credit reporting agencies. Now, you have until the 25th to pay that off without being late.
To report low utiliziation, you have to ensure that your balance at the statement cut date (In your case the 29th), has a low balance. Whatever you want to report to the credit reporting agencies, you leave as unpaid on the 29th.
Example:
Your credit limit is $1,000.00. During the month you spend $400.00 of the $1000 credit limit. Right now, you are utilizing 40% of the available credit. You DO NOT want that to report to the CRA as 40% utilization. So, on or before the 28th, you pay down the balance down to $90 (so you pay off $310). This now shows your utilization of 9%. On the 29th, your statement will report as $90 or 9%.
Does that make sense?
@IamB2 wrote:
@Anonymous wrote:Hey there! First post but long time lurker here. I've tried to search for answers but I feel like it varies from each person. I just recently got my first credit card and I'm just trying to figure out when I need to pay to make sure it reports the low util. My first statement has a date of 12/29/2014 and a due date of 1/25/2015. I noticed when I pulled my credit report that it reported to the agencies on 12/29 for the first time. Basically, as long as I pay my bill on time and keep the balance low untill after the 29th it will report good? Since my due date is on the 25th.
thank you!
Hi Camden88,
Welcome to the forum.. YOu got it almost right. See on the 29th of each month, it looks like that is your statement cut off date. Which means, whatever the balance is on THAT date, that is going to be reported to the Credit reporting agencies. Now, you have until the 25th to pay that off without being late.
To report low utiliziation, you have to ensure that your balance at the statement cut date (In your case the 29th), has a low balance. Whatever you want to report to the credit reporting agencies, you leave as unpaid on the 29th.
Example:
Your credit limit is $1,000.00. During the month you spend $400.00 of the $1000 credit limit. Right now, you are utilizing 40% of the available credit. You DO NOT want that to report to the CRA as 40% utilization. So, on or before the 28th, you pay down the balance down to $90 (so you pay off $310). This now shows your utilization of 9%. On the 29th, your statement will report as $90 or 9%.
Does that make sense?
This explained it perfectly! Basically since my statement is cut on the 29th I need to pay down my balance to 10% by the 28th and NOT use my card untill its reported. Thanks again! I appreciate it!! 
