Credit Card Utilization.

[Anonymous]

Will you please explain "balance probably reports at statement end" in a little greater detail. I am under the impression that in chronological order there is payment due date, followed by a few days "grace period", then statement. Anything charged in the "grace period" is part of the utilization/statement?

[Anonymous]

Different companies report at different times. They may even report before generating a billing statement, let alone the due date. Hence, you might find your card is reported with a balance even if you pay it off in full every month, because you have not yet paid it off by the time it the balance is reported. (This is not a problem if you do not use a large percentage of your credit limit every month, of course.) If you want to avoid this issue, keep your receipt and then pay the amount on the day that you racked up the charge.

There does not seem to be a distinction between "real" debt and debt you actually pay in full before the due date, though of course it is reported whether you make minimum payments on time.

[takeshi74]

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@Anonymous wrote:

I am under the impression that in chronological order there is payment due date, followed by a few days "grace period", then statement. Anything charged in the "grace period" is part of the utilization/statement?

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It's the other way around.  Statement end, grace period then due date.  A statement has to be closed out for billing.  Once a statement is closed, pending charges are applied to the following cycle.

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@Anonymous wrote:

Different companies report at different times. They may even report before generating a billing statement, let alone the due date. Hence, you might find your card is reported with a balance even if you pay it off in full every month, because you have not yet paid it off by the time it the balance is reported. 

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They do but most report at statement end which is why a balance will report even if payment is made in full by the due date (but after statement end).

[Anonymous]

The more owed relative to the credit card limit (cap), the lower a FICO score. And there are cutoffs or segments, meaning that within certain ranges of a balance percentage there's no effect, and then a change when a balance hits a cutoff.

The cutoffs are as follows: 0–19 percent, 20–39 percent, 40–59 percent, 60–79 percent, 80–99 percent, and 100+ percent. Each increasing cutoff harms a score the same amount as the previous (e.g., if a balance goes from 39–40 percent, it will harm a score at the same rate as its going from 79–80 percent would). (Many "experts" claim 50 percent of the credit limit is a magic number. But as you can see, this is wrong.) Keep all balances on your revolving (credit card) accounts below 40 percent of the credit limit, and never exceed that amount. If possible, never exceed 19 percent.

[MarineVietVet]

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@Anonymous-own-fico wrote:

Leaving $5 in your account at the statement date is good. Leaving $5 in your account at the due date is bad.

Also, there's nothing to indicate that any given percentage such as 30% signals any particular threshold.

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I agree. There are no hard and fast rules because all of our credit profiles are different and they are constantly changing.

[MarineVietVet]

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@Anonymous wrote:

 H

The more owed relative to the credit card limit (cap), the lower a FICO score. And there are cutoffs or segments, meaning that within certain ranges of a balance percentage there's no effect, and then a change when a balance hits a cutoff.

The cutoffs are as follows: 0–19 percent, 20–39 percent, 40–59 percent, 60–79 percent, 80–99 percent, and 100+ percent. Each increasing cutoff harms a score the same amount as the previous (e.g., if a balance goes from 39–40 percent, it will harm a score at the same rate as its going from 79–80 percent would). (Many "experts" claim 50 percent of the credit limit is a magic number. But as you can see, this is wrong.) Keep all balances on your revolving (credit card) accounts below 40 percent of the credit limit, and never exceed that amount. If possible, never exceed 19 percent.

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Hi there.

I've been gone for awhile and may have missed something but could you name a source for these numbers?