@Darrdrio wrote:Please bear with me to the end it’s important that I get this! And please refrain from telling me that I'm overthinking things.
So, I’m still fairly new (under a year to credit cards) I currently have a 724 according to Experian, 755 according to Equifax, and 759 according to TransUnion. I previously had a 771 before I had applied for a few other cards, so I got knocked down quite a bit. MyFICO says I’m currently at a 718 with Equifax.
So far, what I have learned is that Credit Card Companies ONLY report your Statement Balance to the Bureaus,
Usually, but not always. There are exceptions. Sometimes the reported balance is something other than the statement balance.
and that, the Credit Bureaus ONLY see what is reported to them, which is the Statement Balance?
I’m of the current understanding that the report that the Credit Card Companies send off to the Bureaus is ONLY the Statement Balance and NOT your previous Balances during the cycle?
For example, if you are trying to increase your Credit Score, I was told to keep my Credit Card Utilization under 30%, ideally around 7% or lower.
Your individual account utilization should be 28% or less. Your aggregate utilization should be as low as possible, but there are no clear thresholds as there are in individual account utilization. 6% or less would be great.
BUT that you CAN go higher than that, let’s say I get it up to 50% during the cycle, that’s fine only AS LONG as I pay my balance down to 7% utilization BEFORE my Statement Close Date comes, because that Statement Close Date is what gets reported to the Bureaus, and that’s all they will ever see, and THEN after the Statement Close Date has passed, obviously it is advised to pay off the rest of your balance completely BEFORE your Due Date.
As mentioned the statement close date is usually but not always the reporting date.
I’ve also heard that you should pay your credit cards down to 0% before the Statement Close Date,
You should pay it down to zero before the reporting date if you want the account to report a zero balance. FICO algorithms like a lot of zero balances.
but that doesn’t make sense to me, because if you want the Credit Bureaus to see that you’re using your card, that would be counter intuitive right? Wouldn’t you WANT that report to show some kinda Utilization Percentage? Wouldn’t you want them to see a balance in the report? 🤔
Your report contains a number of fields for each account. There are fields other than the balance that show usage of the card during the cycle. And there's no reason you would want the credit bureaus to see that you're using the card.
So, from this understanding, it seems like the Bureaus only see my Statement Balance / Utilization in the report that my Credit Card Company sends them, as opposed to the History of Payments I’ve made leading up to paying down my card to 7% Utilization? Or is it actually that they DO see the History in the report?
Because, with the current understanding I have, I’ve been STRICTLY ONLY buying things up to 7% utilization, and then waiting until my Statement Close Date comes, so that my 7% Balance/utilization gets reported to the Bureaus.
Is my current understanding wrong? Are the Bureaus only getting a snapshot of the Current Statement Balance in the report? or do they also get the payments I made leading up to the Statement Close Date as well?
Because if THAT's the case, then that would change a lot about how I use my cards. If the Credit Bureaus are indeed getting a snapshot of the history of payments I make throughout my cycle, then I would make sure that I would go over my 7% utilization enough to make sure I can get a history of a few payments leading up to my Statement Close Date to show 7% utilization.
I would continue to play in the range of 0% to 10% as far as utilization goes, 7% is my general base target for utilization. I always hear people say keep it under 30% too. So, I could experiment with going around to 29% and making sure I pay it down to 7% by my Statement Close Date too.
Anyway, I just need a little help, if anyone can let me know if what I’ve learned is correct or wrong, I would appreciate that so much! Also feel free to DM me to if I wasn’t clear enough here.
Also, I do know that your total credit between however many cards you have should be accounted for when it comes to utilization. I add up all my limits and figure out what 7% utilization would be between them all so I don’t use more than what my target is.
@Darrdrio wrote:So far, what I have learned is that Credit Card Companies ONLY report your Statement Balance to the Bureaus, and that, the Credit Bureaus ONLY see what is reported to them, which is the Statement Balance?
I’m of the current understanding that the report that the Credit Card Companies send off to the Bureaus is ONLY the Statement Balance and NOT your previous Balances during the cycle?
to expand what ^ was saying above, they can report the amount paid during the cycle, but this is card dependent.
my Navy card does report this number:
but other cards might not choose to provide this information:
the $917 'amount paid' makes no FICO score impact, but creditors can and do use that information in their underwriting
You can use your cards all you want. Just pay it down before the statement date which is whats reported. Thats where the 6% comes in. More use, better chance for CLI's. Not knowing how many cards you have. The less that report the better. Never have all or none report a balance. Thats a hit to your scores. Of course pay before the due date after the statement date balance has reported. Dont want late fees. Rinse and repeat. Higher the reported balance. Pass 28% or higher. Ding to your scores.
