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Question on CC reporting and Utilization

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Established Contributor

Question on CC reporting and Utilization

Hi Everyone !!

I have been on here, on and off for over 2 years and seemed to have lost my way on reporting cc's a bit here. Was in the low 700's a few months ago and then rec'd a big drop of approx 20 points across the 3 bureaus for 2 cards reporting at the same time, I have yet to recover from it with just one card reporting a small balance and the others reporting 0.

Here is my question. I have 5 cards. All now report and have for the last few months at -0- when the statement cuts, except one of which I report a small balance of around 10.00. This card is my Cap 1 which has a CL of 11,500.00. So my utilization is reporting 0. I know this is not good, I need to have this come up to between 1 and 3%. Not sure what to do. If I report say 2% of that one Cap card, that would be $230.00, so now as I have seen in the past it will show a balance increase of which I will be dinged for. What is the best way for me to report this one card? Do I report this 2% amount and each month just keep decreasing the balance reporting by a certain amount. Just so confused.

Heading for a mortgage in about 6 months, so trying to get the scores up.ll

 

 

Actually wanted to post this in Rebuiding credit. Not sure how to delete this post. Reposted in Rebuilding Credit.

Ch.13 Discharge 8/2014
START: 9/2014: FICO: Eq-533/TU-519/Exp-560
CURRENT:1/2017: FICO: Eq-699/TU-700 Exp-703
/Cap 1 Plat (11,500)|Barclays (6200)|Cap1.Quicksilver (7650.00)|Overstock (6,000)|Discover (4500)|DCU/Auto/25k/1.99%
|Cap 1 Auto/35k/2.49%
Message 1 of 30
29 REPLIES 29
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Super Contributor

Re: Question on CC reporting and Utilization

Any balance reported on a card in the eyes of FICO scoring results in a utilization percentage greater than zero.  The only exception would be a very small balance such as $2 or $3 that the creditor may report as $0.  If you let $10 report, that equates to 1% utilization for scoring purposes, even if $10 divided by your credit limit gives you a .004% or something ridiculously low.  Utilization always rounds up to the nearest whole number, so any number even slightly greater than 0 will round up to 1%.

 

If you have 5 revolvers reporting, the general rule of thumb is to only allow less than 50% of them to report a small balance which in your case would be 1 or 2 of the cards.  Try letting a second report a small balance and see what happens. 

 

It really depends on your profile, though.  I can let all of my cards report a small balance and I don't lose any FICO points, so the general rule of thumb I mentioned above is exactly that, general - there are always exceptions.  It's best to sort of play around with small balances over a couple of cycles and find what works best for your profile.  I would say, though, that you letting 1-2 of 5 cards report a small balance with the other 3-4 reporting a $0 balance would be your best bet.

Message 2 of 30
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Established Contributor

Re: Question on CC reporting and Utilization

Thank you for your input. So then perhaps I should let 2 cards report a small balance and see what happens, because what I am doing now is not working to boost the score and recover those lost points. I guess, I could try it for a month and see what happens. Another question, should the amount reported every month remain the same?

Ch.13 Discharge 8/2014
START: 9/2014: FICO: Eq-533/TU-519/Exp-560
CURRENT:1/2017: FICO: Eq-699/TU-700 Exp-703
/Cap 1 Plat (11,500)|Barclays (6200)|Cap1.Quicksilver (7650.00)|Overstock (6,000)|Discover (4500)|DCU/Auto/25k/1.99%
|Cap 1 Auto/35k/2.49%
Message 3 of 30
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Established Contributor

Re: Question on CC reporting and Utilization

When I look at Credit Karma it says my CC Utl is 0 percent.

Ch.13 Discharge 8/2014
START: 9/2014: FICO: Eq-533/TU-519/Exp-560
CURRENT:1/2017: FICO: Eq-699/TU-700 Exp-703
/Cap 1 Plat (11,500)|Barclays (6200)|Cap1.Quicksilver (7650.00)|Overstock (6,000)|Discover (4500)|DCU/Auto/25k/1.99%
|Cap 1 Auto/35k/2.49%
Message 4 of 30
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Valued Contributor

Re: Question on CC reporting and Utilization

CK is good for some things and not for others.

 

Most say to only 1 credit card report a low balance, the others to $0. If I understand you correctly your are reporting all $0 but $10 on 1 card, right?

Some say, depending on the profile, if you let report 1 of 5 cards or 2 of 5 cards will be the same effect when your overall utility is low.

 

You can try reporting $150 on the card. It should not make any difference, unless for some reason your card is reported as 0% (I don't think that's the case). Good luck.

Message 5 of 30
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Established Contributor

Re: Question on CC reporting and Utilization

I just checked on the my fico utilization and it says 1%. Has it listed as exceptional, so not understanding why I am not regaining the points lost months ago when 2 cards reported? Thats what confusing me. Yes, I am letting 1 of 5 cards report with a 10.00 balance. All others report -0-. I guess I could try letting it report higher maybe 2 %. Just can't figure it out.

Ch.13 Discharge 8/2014
START: 9/2014: FICO: Eq-533/TU-519/Exp-560
CURRENT:1/2017: FICO: Eq-699/TU-700 Exp-703
/Cap 1 Plat (11,500)|Barclays (6200)|Cap1.Quicksilver (7650.00)|Overstock (6,000)|Discover (4500)|DCU/Auto/25k/1.99%
|Cap 1 Auto/35k/2.49%
Message 6 of 30
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Super Contributor

Re: Question on CC reporting and Utilization


@beachglass wrote:

When I look at Credit Karma it says my CC Utl is 0 percent.


You can't go by the CK software; it has no bearing on your FICO scores.  If you are looking on CK under credit factors/credit card utilization it will list all of your cards and tell you their balances and limits.  To the right it will show you the utilization percentage that their software comes up with which is not necessarily what FICO sees. 

 

Remember that ANY balance above $2-$3 (depends on creditor) that gets reported under FICO scoring is viewed as 1% utilization.  If it's a number above zero, it gets rounded up to the nearest whole number which is 1. 

 

Ok CK it correctly shows a $91 reported balance on my Amex account.  To the right it says utilization is 0%.  The reason is because it's a $30,000 limit, so their software rounds down the .003 to 0%.  FICO however will always see this as 1%.  Hopefully that makes sense.

Message 7 of 30
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Established Contributor

Re: Question on CC reporting and Utilization

It does. Thank you. As posted above, I checked my fico and showing 1 %, but not recovering from that drop.

Ch.13 Discharge 8/2014
START: 9/2014: FICO: Eq-533/TU-519/Exp-560
CURRENT:1/2017: FICO: Eq-699/TU-700 Exp-703
/Cap 1 Plat (11,500)|Barclays (6200)|Cap1.Quicksilver (7650.00)|Overstock (6,000)|Discover (4500)|DCU/Auto/25k/1.99%
|Cap 1 Auto/35k/2.49%
Message 8 of 30
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Super Contributor

Re: Question on CC reporting and Utilization


@beachglass wrote:

I just checked on the my fico utilization and it says 1%. Has it listed as exceptional, so not understanding why I am not regaining the points lost months ago when 2 cards reported? Thats what confusing me. Yes, I am letting 1 of 5 cards report with a 10.00 balance. All others report -0-. I guess I could try letting it report higher maybe 2 %. Just can't figure it out.


Letting 2% report won't make a difference.  If you are letting 1-2 cards report a small balance and keeping the other 3-4 at zero balances you are doing everything you can to maximize youf FICO points in the utilization sector of scoring.

 

I think you may be looking in the wrong place.  You said this change happened a few months ago.  Often people get confused because a triggered alert for a score change comes from something else, but it's perceived that it came from a specific event.  Perhaps the points you lost were not due to utilization at all.  Did anything else change a few months ago with your profile?  Did you apply for credit?  New inquires/accounts?  Maybe you were rebucketed.  Maybe a negative item that was gone reappeared?  Maybe an old account dropped off, lowering you AAoA?  There could be a million reasons outside of utilization.  I would go back through your report and look to see if anything else changed a few months back outside of utilization.

Message 9 of 30
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Super Contributor

Re: Question on CC reporting and Utilization


@BrutalBodyShots wrote:

@beachglass wrote:

When I look at Credit Karma it says my CC Utl is 0 percent.


You can't go by the CK software; it has no bearing on your FICO scores.  If you are looking on CK under credit factors/credit card utilization it will list all of your cards and tell you their balances and limits.  To the right it will show you the utilization percentage that their software comes up with which is not necessarily what FICO sees. 

 

Remember that ANY balance above $2-$3 (depends on creditor) that gets reported under FICO scoring is viewed as 1% utilization.  If it's a number above zero, it gets rounded up to the nearest whole number which is 1. 

 

Ok CK it correctly shows a $91 reported balance on my Amex account.  To the right it says utilization is 0%.  The reason is because it's a $30,000 limit, so their software rounds down the .003 to 0%.  FICO however will always see this as 1%.  Hopefully that makes sense.


I agree with BBS and would strengthen his observation even more.  The problem is not only with Credit Karma's summary page, there is a risk in relying on any credit monitoring service's "summary" page.  For example, Credit Check Total is a great service and it provides true FICO 8 scores.  Nevertheless, I am almost sure that some people have written in with the same confusion about CCT.  The person says that his utilization is 0%; we tell him it is really 1%; and he says that he's checked and CCT says it is 0%.  I am guessing that CCT's summary software rounds to the nearest percent (thus 0.48% util would read 0% and 0.51% util would read 1%).rather than always rounding up, as the actual FICO algorithm does. 

 

Karma is otherwise a great service -- free credit reports and Vantage scores as often as once a week.  Woo-hoo!  But don't rely on its summary page (including what it says about age factors) and carry that general skepticism about summary pages with you any time you use a CMS.

Message 10 of 30
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