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Utilization question.

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Chris679
Established Contributor

Re: Utilization question.


@ccpat wrote:

Why do some say PIF before due date and others PIF after reporting? 


PIF before the due date if you want to minimize the balance on your statement.  If you don't care, then just PIF after the statement cuts. 

Message 11 of 14
takeshi74
Senior Contributor

Re: Utilization question.


@Anonymous wrote:

Ok..I have a question regarding utilization.  With a total combined CL of around 20k, and fairly new AAoA, what would be a good target for utilization to make my garden grow.. Would it be in the 8-12% range? Or, am I better just making smaller purchases on my cards, and PIF when the statement cuts?


As low as possible.  We can't tell you exactly where you'd maxmize point gain for revolving utilization drop and where you would start to see less gain per % drop.  You'd have to test and monitor while accounting for other data changes to determine that.

 

That said, you don't need to constantly keep it that low.  Generally keep in under 30%.  If apping or requesting a CLI then you want it as low as possible as a report and score will be referenced and the balances and limits on that report will be considered.  Preiovusly reported balances and limits won't matter.

 


@Anonymous wrote:

Would I be safe to assume that I do have to use the cards so that a payment history will show?


Not necessarily.  I have several accounts with no usage that show payment history.  It really all depends on the specific creditor.  You want sufficient usage to avoid account closure due to inactivity but you need to confirm what that policy is with each of your creditors and ensure that you meet at least the minimum requirements.

 


@ccpat wrote:

Why do some say PIF before due date and others PIF after reporting? 


It's all about what balance one wants to report.  If you're fine with the balance reporting as is then pay after the report date.  If you want to reduce the reported balance then pay the balance down with sufficient time for the payment to clear prior to the report date.  Pay any remainder of the statement balance, if applicable, by the due date.

 

My spend and limits have been falling at about 6% and my FICO 8's are above 800 even with most cards reporting balances so I don't worry about it and just pay by due date.  However, one looking to eke out additional points when applying may want to reduce reported balances and number of balances.

 


@elim wrote:

big spend and big payments on less than half your cards every month, in some sort of overlapping rotation, and PIF = nice CLI mode, 


Do not rely solely on the usage meme. It is also not just about the account itself. Any CLI is determined based on what one's entire credit profile and income qualify for.  This is only anecdotal but several of my cards have received large CLI's with little or no usage.

Message 12 of 14
driftless
Valued Contributor

Re: Utilization question.

My approach is based on simplicity. I have two cash back and one travel cards. I use the cash back cards for everything so I record high usage. I PIF on the due date, Capital One likes to see large payments, not sure about Chase yet. If my usage is abnormally high, I will make a payment mid-cycle. I PIF on the due date with my travel card which I use only for travel and restaurants. I have all three cards set to automatically PIF on the due date so I will never miss making that payment. If you are using the card they are going to report it. I find that using the fewest number of cards is easiest, at least for me, and some ccc like to see a lot of usage. YMMV.
CSR | Amex Platinum | EDP | QS (2)
Amex Blue Business Plus
Message 13 of 14
SouthJamaica
Mega Contributor

Re: Utilization question.


@Anonymous wrote:

Ok..I have a question regarding utilization.  With a total combined CL of around 20k, and fairly new AAoA, what would be a good target for utilization to make my garden grow.. Would it be in the 8-12% range? Or, am I better just making smaller purchases on my cards, and PIF when the statement cuts?


If you're trying to optimize your score best thing is to keep overall utllization -- based on balances reported on statements -- at 9% or less. Ideal is all but one accounts reporting zero balance, with one account reporting 9% or lower.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 14 of 14
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