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Utilization Question

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Re: Utilization Question


@AvadaKedavra wrote:

@LVKalani wrote:

@LVKalani wrote:

@AvadaKedavra wrote:

@LVKalani wrote:

@LVKalani wrote:

Hello Everyone!!! I have a question about utilization... Is utilization based on the balance after a statement has been cut or is it considered the activity before a statement is cut? I have been 4 months into all this and suddenly now doubting myself on what I've been thinking all this time Smiley Surprised - sorry if this sounds dumb...!?! Smiley Embarassed LOL!!! Thank You in advance with your replies!!! Smiley Happy


Okay, so I had to open up my resources a bit more, research further, and find opportunities for an educated answer... Didn't expect to experience a sense of impatience (completely surprised), so here goes to hopefully help all the others out there that may be seeking the same advice!!! YES, credit utilization (lenders combined) is based on what each lender reports to the CB(s)... What is reported by a lender to the CB(s) will be the most current statement balance (only) at the time it is indeed reported... If a payment has been made by the cc user after the their statement has been cut and before that lender reports to a CB, it will not be reflected!!! Also, once a statement has been cut and there is additional activity (charges) thereafter, it will not be reflected as well to what is reported to the CB(s) - of course, making payments prior to a statement cut will always determine what actual balance will be reported, etc... This information definitely helps whether you decide to and/or or need to leave a balance on a particular CC on abiding what the lenders preferences are for future app approvals, PC's, and/or CLI's with a particular lender!!! Thank You for your time & patience!!! Smiley Wink


Thanks for posting what you've learned....so let me ask based off what I'm hoping I'm understanding this as...

 

So for example, my Chase freedom statement cut on 8/4. The statement balance was $42.08. Throughout the time I got my card up until the statement cut I spent ~$500 but kept making payments every couple of days. Does this mean that Chase will report $42.08?


If I may, I'm going reiterate... Your balance was $42.08 as of your "last" statement, correct? Then you charged up to $500 since then but you have NOT receieved another statement from them as of today, correct? If Chase has not reported to the CB(s) yet but reports to them before the next statement, it will ONLY be $42.08 - AS FAR AS I UNDERSTAND IT... However, once the next statement cuts & it includes the $500.00 - it will then be reported to the CB(s) as $542.08 (or however they round it off)...


I just checked your siggy, your CL is $500 just like mine - how are you able to put $42.08 and then another $500 on your card?!? LOL!!! can I trade cards with you?!? LMAO!!!


Haha...I literally make payments every few days because of the amount of everyday spending I do on it. I wish transactions would post faster than they do so it let's me pay more than is actually posted. So many in "Pending" for days...it's annoying.


Okay, I was gonna say...!?! LOL!!! Anyways, getting back to your situation, what ever balance you originally had, what $42.08 - will be what is reported to the CB(s) prior to your next statement, provided that they report it before your next statement... If they decide (which I am noticing that reporting is not consistent depending on the lender) to report after your next statement, it will then be that balance then... I hope I'm being clear enough...

Message 21 of 30
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Established Contributor

Re: Utilization Question


@LVKalani wrote:

@AvadaKedavra wrote:

@LVKalani wrote:

@LVKalani wrote:

@AvadaKedavra wrote:

@LVKalani wrote:

@LVKalani wrote:

Hello Everyone!!! I have a question about utilization... Is utilization based on the balance after a statement has been cut or is it considered the activity before a statement is cut? I have been 4 months into all this and suddenly now doubting myself on what I've been thinking all this time Smiley Surprised - sorry if this sounds dumb...!?! Smiley Embarassed LOL!!! Thank You in advance with your replies!!! Smiley Happy


Okay, so I had to open up my resources a bit more, research further, and find opportunities for an educated answer... Didn't expect to experience a sense of impatience (completely surprised), so here goes to hopefully help all the others out there that may be seeking the same advice!!! YES, credit utilization (lenders combined) is based on what each lender reports to the CB(s)... What is reported by a lender to the CB(s) will be the most current statement balance (only) at the time it is indeed reported... If a payment has been made by the cc user after the their statement has been cut and before that lender reports to a CB, it will not be reflected!!! Also, once a statement has been cut and there is additional activity (charges) thereafter, it will not be reflected as well to what is reported to the CB(s) - of course, making payments prior to a statement cut will always determine what actual balance will be reported, etc... This information definitely helps whether you decide to and/or or need to leave a balance on a particular CC on abiding what the lenders preferences are for future app approvals, PC's, and/or CLI's with a particular lender!!! Thank You for your time & patience!!! Smiley Wink


Thanks for posting what you've learned....so let me ask based off what I'm hoping I'm understanding this as...

 

So for example, my Chase freedom statement cut on 8/4. The statement balance was $42.08. Throughout the time I got my card up until the statement cut I spent ~$500 but kept making payments every couple of days. Does this mean that Chase will report $42.08?


If I may, I'm going reiterate... Your balance was $42.08 as of your "last" statement, correct? Then you charged up to $500 since then but you have NOT receieved another statement from them as of today, correct? If Chase has not reported to the CB(s) yet but reports to them before the next statement, it will ONLY be $42.08 - AS FAR AS I UNDERSTAND IT... However, once the next statement cuts & it includes the $500.00 - it will then be reported to the CB(s) as $542.08 (or however they round it off)...


I just checked your siggy, your CL is $500 just like mine - how are you able to put $42.08 and then another $500 on your card?!? LOL!!! can I trade cards with you?!? LMAO!!!


Haha...I literally make payments every few days because of the amount of everyday spending I do on it. I wish transactions would post faster than they do so it let's me pay more than is actually posted. So many in "Pending" for days...it's annoying.


Okay, I was gonna say...!?! LOL!!! Anyways, getting back to your situation, what ever balance you originally had, what $42.08 - will be what is reported to the CB(s) prior to your next statement, provided that they report it before your next statement... If they decide (which I am noticing that reporting is not consistent depending on the lender) to report after your next statement, it will then be that balance then... I hope I'm being clear enough...


Yep. Crystal clear Smiley Happy Thank you!

Message 22 of 30
Highlighted
Regular Contributor

Re: Utilization Question


@AvadaKedavra wrote:

@LVKalani wrote:

@AvadaKedavra wrote:

@LVKalani wrote:

@LVKalani wrote:

@AvadaKedavra wrote:

@LVKalani wrote:

@LVKalani wrote:

Hello Everyone!!! I have a question about utilization... Is utilization based on the balance after a statement has been cut or is it considered the activity before a statement is cut? I have been 4 months into all this and suddenly now doubting myself on what I've been thinking all this time Smiley Surprised - sorry if this sounds dumb...!?! Smiley Embarassed LOL!!! Thank You in advance with your replies!!! Smiley Happy


Okay, so I had to open up my resources a bit more, research further, and find opportunities for an educated answer... Didn't expect to experience a sense of impatience (completely surprised), so here goes to hopefully help all the others out there that may be seeking the same advice!!! YES, credit utilization (lenders combined) is based on what each lender reports to the CB(s)... What is reported by a lender to the CB(s) will be the most current statement balance (only) at the time it is indeed reported... If a payment has been made by the cc user after the their statement has been cut and before that lender reports to a CB, it will not be reflected!!! Also, once a statement has been cut and there is additional activity (charges) thereafter, it will not be reflected as well to what is reported to the CB(s) - of course, making payments prior to a statement cut will always determine what actual balance will be reported, etc... This information definitely helps whether you decide to and/or or need to leave a balance on a particular CC on abiding what the lenders preferences are for future app approvals, PC's, and/or CLI's with a particular lender!!! Thank You for your time & patience!!! Smiley Wink


Thanks for posting what you've learned....so let me ask based off what I'm hoping I'm understanding this as...

 

So for example, my Chase freedom statement cut on 8/4. The statement balance was $42.08. Throughout the time I got my card up until the statement cut I spent ~$500 but kept making payments every couple of days. Does this mean that Chase will report $42.08?


If I may, I'm going reiterate... Your balance was $42.08 as of your "last" statement, correct? Then you charged up to $500 since then but you have NOT receieved another statement from them as of today, correct? If Chase has not reported to the CB(s) yet but reports to them before the next statement, it will ONLY be $42.08 - AS FAR AS I UNDERSTAND IT... However, once the next statement cuts & it includes the $500.00 - it will then be reported to the CB(s) as $542.08 (or however they round it off)...


I just checked your siggy, your CL is $500 just like mine - how are you able to put $42.08 and then another $500 on your card?!? LOL!!! can I trade cards with you?!? LMAO!!!


Haha...I literally make payments every few days because of the amount of everyday spending I do on it. I wish transactions would post faster than they do so it let's me pay more than is actually posted. So many in "Pending" for days...it's annoying.


Okay, I was gonna say...!?! LOL!!! Anyways, getting back to your situation, what ever balance you originally had, what $42.08 - will be what is reported to the CB(s) prior to your next statement, provided that they report it before your next statement... If they decide (which I am noticing that reporting is not consistent depending on the lender) to report after your next statement, it will then be that balance then... I hope I'm being clear enough...


Yep. Crystal clear Smiley Happy Thank you!


Whew!!! Smiley Wink I'm glad & hope this helps!!! Smiley Happy

Message 23 of 30
Highlighted
Regular Contributor

Re: Utilization Question

FINAL NOTE: Credit Utilization as researched would be based on the "CREDIT OWED" - the balance owed resulting from a statement and has been reported to a CB...

Message 24 of 30
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Established Contributor

Re: Utilization Question

Ok guys I'm new here. And SLOW! I currently have 3 cards. 2 installment loans, 1 is auto an the other is shared secured loan. My question is, credit utilization is the amount of credit you have, correct? My total credit between the 3 cards. So would I need to keep one card at 9% an the other 2 at 0? So my Total utilization is at 9% ? I just want to make sure I understand this correctly. Thanks guys in advance for your response.

Starting Scores: EQ 0, EX 534 ,TU 540 8/14: Current Score EQ 685 FICO 08 (2/15), EX 685 FICO 08 (5/15) TU 687 Discover IT (5/15).
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Message 25 of 30
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Regular Contributor

Re: Utilization Question

I have a followup question in regards to utilization as well. lets say my total utilization is 15%, with $10,000 in available credit. of that 15%, one card is reporting $1300 on a $1500 credit lemit (lets say a big purchase was made, and were taking advantage of a 0% offer), and the other 200 was spread out somewhere on the rest of the cards. When apping for new cards, would the computers take into account the fact that 1 card is nearly maxed, or would they just pay attention to the total 15% util.  I understand upon manual review they will see anything, but I was curious about how a computer would view this.

Message 26 of 30
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Valued Contributor

Re: Utilization Question


@dize wrote:

I have a followup question in regards to utilization as well. lets say my total utilization is 15%, with $10,000 in available credit. of that 15%, one card is reporting $1300 on a $1500 credit lemit (lets say a big purchase was made, and were taking advantage of a 0% offer), and the other 200 was spread out somewhere on the rest of the cards. When apping for new cards, would the computers take into account the fact that 1 card is nearly maxed, or would they just pay attention to the total 15% util.  I understand upon manual review they will see anything, but I was curious about how a computer would view this.


The computer does recognize the near maxed-out card, so be aware if you decide to app for something that you'd want to pay that card down to at least <80% utilization!

Message 27 of 30
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Re: Utilization Question

Thanks, I was asking this more on my friends behalf.  Right now he has 3 cards: discover, meineke, and us bank platinum. All 3 are near maxed, which brought his score down from about 720 to 660. he wants to balance transfer the US bank and meineke to something with 0 interest, as the minimum payments are killing him. the issue is that the util is preventing him from getting any half way decent card. I was thinking if he possibly applied to the amazon store card, which he wouldnt use much, that would give him a util buffer that would help him get approved easier on a card with 0% he could balance transfer to.

Message 28 of 30
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Re: Utilization Question


@dize wrote:

Thanks, I was asking this more on my friends behalf.  Right now he has 3 cards: discover, meineke, and us bank platinum. All 3 are near maxed, which brought his score down from about 720 to 660. he wants to balance transfer the US bank and meineke to something with 0 interest, as the minimum payments are killing him. the issue is that the util is preventing him from getting any half way decent card. I was thinking if he possibly applied to the amazon store card, which he wouldnt use much, that would give him a util buffer that would help him get approved easier on a card with 0% he could balance transfer to.


Ah I see! Yes, it may be tough to get a BT with that high utilization on those three cards. Not impossible, but would likely result in a low CL approval and less-than-favorable terms on any other card he wants.

 

It would be better for him to simply aggressively pay down the cards to the best of his abilities.

 

Good luck to him!

Message 29 of 30
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Senior Contributor

Re: Utilization Question


@LVKalani wrote:

Hello Everyone!!! I have a question about utilization... Is utilization based on the balance after a statement has been cut or is it considered the activity before a statement is cut?


Generally creditors report once a month whether on statement date (most) or on another fixed date.  They really don't report activity.  They report your balance on the date that they report.  Any later activity will be included the next time the creditor reports as part of the next balance reported.  This is why you need to pay prior to the reporting date to adjust the report balance and your utilization.  If you pay after the balance is reported then you're adjusting the next reported balance.

 

That said, some creditors do report midcycle for various reasons and under certain circumstances.

 


@LVKalani wrote:

If I may, I'm going reiterate... Your balance was $42.08 as of your "last" statement, correct? Then you charged up to $500 since then but you have NOT receieved another statement from them as of today, correct? If Chase has not reported to the CB(s) yet but reports to them before the next statement, it will ONLY be $42.08 - AS FAR AS I UNDERSTAND IT... However, once the next statement cuts & it includes the $500.00 - it will then be reported to the CB(s) as $542.08 (or however they round it off)...


That is incorrect.  Read the post you're replying to again (emphasis added).


@AvadaKedavra wrote:

Throughout the time I got my card up until the statement cut I spent ~$500 but kept making payments every couple of days.


Chase reports on statement date.  The $42.08 balance reported when the statement was cut so it's now history. Cycles overlap a bit so the payment due date for the statement with the $42.08 balance will fall before the next statement balance reports. The balance for the next statement will be $42.08 + any charges - payments made between cycles mentioned above - any payment made for the statement due date.  If the $42.08 balance is paid in full it will not carry over to the next cycle.  Even if a balance was carried a minimum payment would be required for the cycle that would reduce the $42.08.  It is impossible to say what the next statement balance would be given that we were not provided the amounts paid and cannot account for all activity between the $42.08 and the close of the next billing cycle.

 


@Rookie2008 wrote:

My question is, credit utilization is the amount of credit you have, correct?


I think this is just a matter of your choice of words but to clarify amount of credit and utilization are not the same thing.

 

Utilization is balance(s) / limit(s).

 


@Rookie2008 wrote:

So would I need to keep one card at 9% an the other 2 at 0? So my Total utilization is at 9% ? 


What % you keep it at is your call to make and monitoring your scores may help you to determine where you want to keep it.  If you have one card at 9% and the other two at 0 your total utilization would not be 9%.  It would be lower than 9%.  Without the numbers we can't calculate for you but you can use the formula I posted above to determine your individual and overall utilization.

 


@dize wrote:

When apping for new cards, would the computers take into account the fact that 1 card is nearly maxed, or would they just pay attention to the total 15% util.  I understand upon manual review they will see anything, but I was curious about how a computer would view this.


Creditors don't all use the same criteria or computers.  One creditor may weigh a given factor more than the next so you can't just assume that every creditor will treat a given credit profile exactly the same.

 

However, if you are going to generalize both overall and individual utilization matter.

 


@dize wrote:

the issue is that the util is preventing him from getting any half way decent card. I was thinking if he possibly applied to the amazon store card, which he wouldnt use much, that would give him a util buffer that would help him get approved easier on a card with 0% he could balance transfer to.


With high utilization and maxed cards approvals will be difficult if not impossible.  Even if approved limits would be low and APR's would be high.  Your friend really has to work on getting those balances down.  If he can avoid racking up more debt then a consolidation loan may help.

Message 30 of 30
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