Utilization help

[Goose7]

First of all I would like to say thank you to all of the people who post in this forum and make it such a great and knowledgable community to come in and learn a thing or two about how the credit system works. And help address any questions/doubts that we may have in understading the credit system. I have been lurking for a few weeks and can already tell you that I have gained a lot of knowledge just by sticking around and reading the information shared on here daily.

Secondly I would like to explain my situation I got a secured credit card from my bank in April of 2012 my deposit was $300. After getting my card I went out and bought a pretty big purchase of around $200 upon getting my first statement I was planning to pay in full but I was lured away by the minimum payment option and opted for that instead. After dragging on for around 5 months I quit paying the minimum and started paying $50 a month so I wouldn't have to worry about having a credit card payment. Skip to 10 months later (and a few more charges to it) I'm looking at around $266 owed.

After reading the forums for a few weeks now I realize just how big of a mistake I made and the importance of credit utilization. I am now worried that my credit score has taken a plunge off of the high dive....I have only applied for one card since the opening of my secured card which was for a Macy's store card back in August of 2012 I was instanly approved for $300. I used it once for $45, and another for $88 which I paid in full both times. Now my question is If pay my Wells Fargo card within the first week of March will my scores bounce back high enough by May 1st? Which is when I have been wanting to apply for an AMEX green card.

I am sorry for not knowing better, but I also forgot to mention that I recently called Macy's and had a CLI from $300 to $1000 wether it was a SP or HP I have no clue. Thank you guys/gals for taking the time and reading this any help is appreciated Regards, Goose7

TL;DR Have one card with high utilization how bad did I mess up, and can I bounce back within a month and a half?

p.s. sorry for grammar/spelling it's pretty late and I'm tired

[MegaZX30]

Cant say how quickly you will bounce back if your scores did take a hit but if you can maintain a low monthly balance ie 1 - 9% of your total avialable credit reporting monthly should help your scores go back up over time. Once thats reported you can pay it off for the month, make a new purchase, even if its more then 9% you can pay part of it down right away to get it there and let that report next month. Rinse n repeat. Lol I feel like I say this to much but still learning myself so if anyone finds a flaw in my idea / logic feel free to correct

[TeeandDee]

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@Goose7 wrote:

First of all I would like to say thank you to all of the people who post in this forum and make it such a great and knowledgable community to come in and learn a thing or two about how the credit system works. And help address any questions/doubts that we may have in understading the credit system. I have been lurking for a few weeks and can already tell you that I have gained a lot of knowledge just by sticking around and reading the information shared on here daily.

Secondly I would like to explain my situation I got a secured credit card from my bank in April of 2012 my deposit was $300. After getting my card I went out and bought a pretty big purchase of around $200 upon getting my first statement I was planning to pay in full but I was lured away by the minimum payment option and opted for that instead. After dragging on for around 5 months I quit paying the minimum and started paying $50 a month so I wouldn't have to worry about having a credit card payment. Skip to 10 months later (and a few more charges to it) I'm looking at around $266 owed.

After reading the forums for a few weeks now I realize just how big of a mistake I made and the importance of credit utilization. I am now worried that my credit score has taken a plunge off of the high dive....I have only applied for one card since the opening of my secured card which was for a Macy's store card back in August of 2012 I was instanly approved for $300. I used it once for $45, and another for $88 which I paid in full both times. Now my question is If pay my Wells Fargo card within the first week of March will my scores bounce back high enough by May 1st? Which is when I have been wanting to apply for an AMEX green card.

I am sorry for not knowing better, but I also forgot to mention that I recently called Macy's and had a CLI from $300 to $1000 wether it was a SP or HP I have no clue. Thank you guys/gals for taking the time and reading this any help is appreciated Regards, Goose7

TL;DR Have one card with high utilization how bad did I mess up, and can I bounce back within a month and a half?

p.s. sorry for grammar/spelling it's pretty late and I'm tired

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HIgh utlization is something that time heals.  Once you pay down your balances or pay the balances off and it reports,  your credit score will bounce back as long as that is the only issue causing your score to dip, you will be fine.  

[dodfire]

No worries mate!!! Pay down your card below 9% and let it report to the CRA and you will see your score rise again.

[dddewdrop]

    Utilisation % is not cumulative in its affect on your score so as soon as you pay it off your scores will recover. For best results make sure that you have paid it off before the statement date and the effects of high utilisation will be gone from your score. So the answer is yes if you pay it in march it should be gone by may. The only thing you have to worry about with that strategy is how often your particular cards report to the credit agencies. Some don't report with 0 balance. So I would pay all cards down to below 9% util  but maybe not to 0 dollars  then when you are sure all have reported at that level then pay all cards down to 0 dollars leaving 1 at < 9% utilisation and your credit score shoul be optimised as far as util% is concerned.  Good luck. 

[MegaZX30]

Indeed thats true, my orchard card, if it has a balance one month then the next there is none it will report to show I payed, but if it remains inactive for consecutive months after it doesnt report tilll theres a new balance. Lol so it sounds by others post I was basicly right about optimal utitility, guess I should be a little more confident in myself at times..

[Goose7]

Thanks for the help everyone. I think I'm going to take the advice posted and pay off $256 which will leave me with 5% utilzation on this card (which is my only card with a balance) and see if that will report my new balance instead of paying it all off and risking it not reporting to the CRA's, and from then I'll just wait it out and watch my scores raise again. Thank You everyone I'll update this in a few months time.

[youngandcreditwrthy]

the good thing with having lower limits is that you can get your util lower quicker.

in my case, it'll cost me a grand to reduce util just by 1% haha!

[Goose7]

I wish I had your problems. lol

Seriously though one day I hope to be like the guys on here with high limits.

[cmd0906]

In my case, I've been using my CC's each month then paying in full each month reporting 0 on CR. All the while thinking I was doing the "RIGHT THING." 

I noticed on my CR that each month a high balance is reported (amount charged that month) but the balance owed shows 0 because I always pay before the due date. Does that have an affect on anything?

So anyways, I've been doing a lot of reading on utilization and decided to give it a go. I allowed $40 to report on the card that has a $500 limit and 0 on the $300 card. Am I doing this right? Do I need to show a balance on both?  My payment from this balance is $25 due on 7/2. Should I PIF then allow another small amount report or allow 0 to report and repeat again?

Just trying to get the jist of it and of course increase my score.