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Keeping UTI Below 9% ??

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Keeping UTI Below 9% ??

I am wondering how this works.

If you have a \$1000 credit line would the following scenario(s) be correct in explaining how it takes place?

Scenario 1: Closing date the 1st. It is currently the 25th. Balance is \$600.00. The 30th rolls around and you pay \$510. You now owe \$90. Your UTI is now around 9% when the statement closes in the next few days and a \$90 balance is reported to the credit agencies.

Scenario 2: Throughout the month you ONLY rack up \$90. So your UTI is never above 9% throughout the month. You then pay your statement to \$0 by the 1st or keep a minimal balance by the time your staement closes.

Scenario 2 makes little sense to me because if this is the case (for me) I would want around a 10k limit so I could charge \$900 or so throughout the month. Most people do not have this sort of limit...

So what I am thinking is if you have a \$1000 limit you can put whatever amount EVEN \$1000 on it; however you want to have your balance below 9% by the time your statement closes.

Please explain if I am wrong. I want to make sure I go about doing this the right way.

THX!!!

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Re: Keeping UTI Below 9% ??

saggy1 wrote:

I am wondering how this works.

If you have a \$1000 credit line would the following scenario(s) be correct in explaining how it takes place?

Scenario 1: Closing date the 1st. It is currently the 25th. Balance is \$600.00. The 30th rolls around and you pay \$510. You now owe \$90. Your UTI is now around 9% when the statement closes in the next few days and a \$90 balance is reported to the credit agencies.

Scenario 2: Throughout the month you ONLY rack up \$90. So your UTI is never above 9% throughout the month. You then pay your statement to \$0 by the 1st or keep a minimal balance by the time your staement closes.

Scenario 2 makes little sense to me because if this is the case (for me) I would want around a 10k limit so I could charge \$900 or so throughout the month. Most people do not have this sort of limit...

So what I am thinking is if you have a \$1000 limit you can put whatever amount EVEN \$1000 on it; however you want to have your balance below 9% by the time your statement closes.

Please explain if I am wrong. I want to make sure I go about doing this the right way.

THX!!!

Scenario 1 is correct.   It does not matter what the daily balance is, only the balance at closing.

Note, a few banks don't report at closing, so there are exceptions.

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