@Chelsea12 wrote:
Hello everyone,
I wanted to know if someone could explain how the utilization is calculated on my credit card. I am trying to get a mortgage soon and my scores per the lender are:
EQ 598 7/10
TU 602 7/10
EX 600 7/10
my scores have gone up about 30 points since original pull in April 2010. Broker suggested to pay CC balance to $10.00 limit only $450 and keep it there at under the 9% to get max results. I paid CC off to $10.00 and I know that CC updates around the 20th of each month, how long does it take for the update of the new low balance to be calculated into my scores to see how many points I gained? I have the FICO score monitoring and no action yet.
The next question is if you go over the 9% utilities throughout the month but make frequent payments maybe 3 to keep balance low and if I make sure the balance is under the 9% prior to the bill cutting and the CRA monthly update how is the utilization calculated? Is it an average of the 25-30 day period if so wouldn't making multiple payments a month keep the averages lower? Or as long as I have the balance under the 9% prior to the bill cutting and the CRA updates will this keep my score higher?
Thank you in advance!
Utilization is calculated when the FICO score is generated. It is based on the last reported balance and credit limit for that account. There is no history or averaging, it is simply a snapshot.
An easy way is to pay the card down to the desired amount several days before the reporting each month until you get your mortgage. That is tricky since most do statement balance when they report. Some do balance at end of the calendar month. It may take a week or 2 to show up on your report as well.
Of course, if you never let balance get above 9% till you get the mortgage, you are guaranteed good utilization on your report..
