As long as it paid off every month, it doesnt matter how close you come to credit line, right?

[JasonBourneOfCredit]

I've heard that keeping your credit card usage under 30% is the best thing for your credit. Is that for the revolving balance or general speding every month? I'm paying it off every month and I have a $200 secured card limit. So if I charge $70 but pay it, I'm ok right?

[Anonymous]

As long as it is PIF before the statement posts, you should be ok.

And 10% or less is actually better if it is going to report a balance.

[JasonBourneOfCredit]

Thanks- but help me with this paying part...

It's my first credit card. I'm in the first cycle. The due date just posted as 4/2/10. When should I pay? Today or 3/31 or what?

Just want this first cards first cycle to be perfect and get me off to a good start!

Message Edited by JasonBourneOfCredit on 03-10-2010 09:09 AM

[Lel]

The utilization is calculated based on the statement balance of your credit card.  So in your original post, you appear to indicate that your statement reads that you charged $70 on a $200 CL card.  If this $70 is reported on your balance, then it is this $70 that is reported to the credit bureaus and is used to calculate your utilization.  So, your utilization as seen by the FICO scoring formula is 35%.

Once your statement has posted, it only matters that you pay your bill on time.  It's not going to make a difference in your utilization calculation.  So if your bill is due on April 2, then as long as you pay it by April 2 then you will be fine.

To bring your utilization down, the strategy that people commonly use is to pay their CC balance before the statement is issued.  If your billing cycle (the period of charges that are included in the credit card's billing statement) runs from April 1 to May 1, you can pay off/down the balance on April 30.  When the statement is issued on May 1, your CC balance will be lower, and this lower balance will be reported to the credit bureaus.  As a result, your utilization of a revolving credit is lower, and hopefully your credit score will go up.

To illustrate more concretely, let's say from April 1 to April 29 you run up $195 on your $200 CL card.  On April 30, you make a pre-emptive payment of $190 (usually pretty easy to do online).  Your statement issued on May 1 shows a balance of $5, and your utilization is 2.5%.  If you don't pre-pay before the statement drops, then the $195 will appear on your statement at your utilization is at 97.5%.

[JasonBourneOfCredit]

Ah ha, so it's all about when the statement reports. I just checked my credit report and this new card shows a balance of $35. It must have been about 10 days ago (3/1) when that was the balance. So, knowing it's going to report my balance on around the first of the month, I should pay it off in full before that time, right?

I'll never have a balance that I leave on there and pay interest on. Thats the whole name of the game. To boost my credit.

Message Edited by JasonBourneOfCredit on 03-10-2010 01:51 PM

[Lel]

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JasonBourneOfCredit wrote:

Ah ha, so it's all about when the statement reports. I just checked my credit report and this new card shows a balance of $35. It must have been about 10 days ago (3/1) when that was the balance. So, knowing it's going to report my balance on around the first of the month, I should pay it off in full before that time, right?

I'll never have a balance that I leave on there and pay interest on. Thats the whole name of the game. To boost my credit.

Message Edited by JasonBourneOfCredit on 03-10-2010 01:51 PM

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Again, the key date is the statement date.  Some CCs report to the CRAs on the statement date; others report a little bit later.  Amex used to be about a month behind in their reporting.

Even if your statement closes on April 1 with a $100 balance and your CC reports to the CRAs on April 10, it doesn't matter whether you pay your credit card before or after April 10.  It will be the $100 statement balance that will be reported - at least that's the way it's always been for me.  They don't report my instantaneous balance, just the statement balance.

To avoid any finance charges, you just have to pay your bill in full before the payment due date.

[haulingthescoreup]

Which credit card company? And what is the date on the statement?

It has probably already reported that initial balance to the bureaus, which is no biggie. It's tough to avoid this in the first billing cycle.

For SCORING:

Assuming that it updates on the statement date, you can run any amount of money through it and pay it off before the next statement drops. In terms of what affects your score, it's what's reported to the bureaus. If you control what's reported, you control your revolving util, and that's a big part of your score.

Do be aware that every now and again, a CCC updates early. Discover did this to me once (and several other forums members), and I think I've read that BofA has done this as well. So there's always that element of potential surprise.

For FINANCIAL COMMON SENSE:

If you're not bothering with the above, pay in full online about 3 days before the due date, and save that confirmation number to a sticky or similar text note, or better still, screenshot and save the confirmation message. If for some reason they fail to post it on time and try to stick you with a late fee, you will have the confirmation number to prove that you paid timely.

Message Edited by haulingthescoreup on 03-10-2010 03:29 PM

[JasonBourneOfCredit]

Its a Public Savings Secured Visa. Based on this screenshot, when is the best time for me to pay the bill every month? All this information under Balance  and "Minimum Payment Due" just popped up yesterday or early today.

Here's a screenshot:

Message Edited by JasonBourneOfCredit on 03-10-2010 06:03 PM

Message Edited by JasonBourneOfCredit on 03-10-2010 06:04 PM

[haulingthescoreup]

OK, at the very bottom, it says that your last statement date was March 7. I think that the new Credit CARD Act requires that your due date be the same every month; if so, your statement date will probably be on the 7th of every month. (I'm not familiar with Public Savings.

For SCORING:

If you want $0 to report, or if you want a specific figure to report, and IF this bank updates on your statement date, stop using the card on the 2nd. Go online on the 5th and PIF if. Check again on the 6th and on the 7th to see if anything snuck by. If not, and your current balance is still showing $0, that's what will be on your statement, and that's what will report, IF this bank updates on the statement date.

The way to get a good educated guess as to whether it reports on the statement date is to pull a report from somewhere and see if the reported balance is $36. If so, then they probably update on the statement date. If it's a different figure, you might be able to look at the transaction history and see on which date your balance was what shows on your reports. You can then figure that that's when they update to the CRA's.

I'd hold off until the 17th or so to check a report, especially if you have to pay for it, to make sure that the CRA's have gotten around to updating. EQ and TU are slooooow.

For GOOD FINANCIAL PRACTICE (not worrying about reported util):

The due date is April 2. I would pay online somewhere around March 29 and save that confirmation number as I mentioned before. Check again online the next day (might have to wait for the next business day) to confirm that the new balance has posted.

Some banks and credit unions don't post that new $0 balance right away. But you can look at your available credit figure. If it's your credit limit, then they have credited your payment.

[Anonymous]

The statement cut on the 7th. If it runs true from month to month you should have the account paid down to the balance you want to report by the 7th of the month. You should give yourself 3 or 4 days buffer to be sure the payment is transacted and reported on time. A balance of under 10% of your credit line is optimal.

CB