Utilization vs. Highest Reported Balance

[spicypeppermints]

Thank you in advance for your clarification!

I've read quite a bit about utilization and how it relates to your credit report. I've seen people say keep your utilization between 0-30% for optimal scores. I've seen more post about how you should never go above 30% of your available credit as to not damage your scores.

Using my Discover card for an example, it has a $4000 limit, if I spend $3500 after my prior statement closed and I pay the $3500 a week later or even a day before my next due date...If I arrange my payment so the $3500 isn't reported as the Highest Reported Balance, why would one only spend up to 30% of their credit limit since that amount won't be reported on my credit report? Is this 30% for internal factors with the credit card company to help encourage CLI's in the future?

It's my understanding that the Highest Balance when your statement closes is what's reported to your credit report. I would never let $3800 report when my statement closes, so I'm wondering if the 30% applies to that situation? Not letting over 30% report as the statement balance or not using over 30% of your available credit period?

Please excuse my ignorance, there is a wealth of information on this forum and I breathe it all in while I toil away in my garden

[coldnmn]

Utilization is what is reported when statement cuts. Highest reported balance is the largest amount of your credit used that month. Ideally you should have your utilization <9% when statement cuts. Highest reported balance in my opinion shows your using your CL responsibility and when they review your account for CLI they will be more willing 

to give you a CLI. Unfortunately a lot of the reviews are through computer algorithms so that's why we have to play with the numbers like that. The important thing never go over your CL and pay before due date.

[spicypeppermints]

Highest reported balance is the largest amount of your credit used that month. - Got it, makes perfect sense. So the theory of staying under 9% is applicable when your applying it towards your Highest Balance reported on your CR and not as a general rule of thumb when using your credit line in between statements.

I was just making sure that you could technically spend up to your limit and still play around on what is actually reported. Whether or not the CC companies approve of that, I don't know. In my mind that tells them I need more than a $4k limit and that I can make that lump sum payment at the same time. Hopefully that works in your favor when asking for a CLI.

Thank you!

[user5387]

On my current EX report pulled from USAA, "balance" and "high balance" are two different things, and the latter refers to a longitudinal measure of the highest balance the account has ever had, which may have been several years in the past.

It may be important to pay down your balance before the statement date, to control the "balance" value.

But this is distinct from the "high balance" value.

[spicypeppermints]

That is really interesting. I was looking at my report from EX to see the amounts that we're posted and you are correct. They very throughly reported highest balance, last balance, last payment ect. So even though I'm about 2 weeks from having my next statement close, EX can see my current balance, even if I were to pay it off tomorrow? Seems like they would need to do daily or weekly monitoring to catch up with that if I'm in the middle of my cycle and just made the charges within the last week.

[user5387]

Your CC company typically updates information with the CRBs on a monthly basis, not a real-time or weekly basis.

There are premium products, such as the rapid rescoring used in the mortgage business, that are an exception to this rule.