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Should I pay bal down before statement cuts?

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Frequent Contributor

Should I pay bal down before statement cuts?

For CLI, do CC companies care about the bal reported on your credit report or do they use some type of internal reporting to see how much you actually spent?

 

For 1 or 2 cards, I've racked up some charges and the util's over 30% for both. I can pay it down before the statement cuts, though. Should I, or should I let the bal hit my reports and then pay it down? In my mind, that shows that I can rack up charges, and pay them off fairly quickly. Is that the way lenders see it or do the high balances scare them off? ETA: Even if I don't pay the bals down before the statements cut, my overall util will still be less than 30%. I can also pay the bals down to less than 30% if that's the best thing to do. Hope that helps w your advice.

Message 1 of 28
27 REPLIES 27
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

Yes they care about your balances, utilization. Plus it affects your scores. And your scores are a big determinant in whether you get a CLI. You want overall revolving utilization under 8.9% and any individual cards under 28.9%.

They have their internal records of your spend on their cards. And there’s some data from some lenders on the credit reports for spend at other lenders but they want your spend with them not other lenders and they don’t want to see a lot of debt.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.



RIP:



 

 

 

 




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 2 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

Your profitability to them comes by you using their cards, not other lenders cards.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.



RIP:



 

 

 

 




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 3 of 28
Highlighted
Established Contributor

Re: Should I pay bal down before statement cuts?

Wanted to add that I have experienced banks give CLI when pif AND also when taking on LARGE balances.

 

I am sure it is due to my credit history, but I have received increases when asking after 

maintaining a $0 balance with little to no use,

however I have also received CLI when my balance is up to 88% utility. (multiple times)

 

AND I am not joking when I say that I have received AUTO CLI after "maxing out" my utility

over 90% on higher card limits. *however this was between statements,

util was under 88% when statement cut but did receive AUTO cli.

 

It really depends on your history/profile. 

 

* I will note that I am not fully versed in the NEW TO COME FICO scoring models, but it

seems that high balance history may effect scores, possibly to err on the side of negative

but not sure how that would play out on CLI verses just credit scoring.

 



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- [BOA CR $12.5k][Amex SC+ $13.5k][Amex B4B $35k][Chase Ink $45k][PNC $26.5k]
BT'oholic and OPM Lover! Chunk'n it hard and often!
Message 4 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?


@cr101 wrote:

For CLI, do CC companies care about the bal reported on your credit report or do they use some type of internal reporting to see how much you actually spent?

 

For 1 or 2 cards, I've racked up some charges and the util's over 30% for both. I can pay it down before the statement cuts, though. Should I, or should I let the bal hit my reports and then pay it down? In my mind, that shows that I can rack up charges, and pay them off fairly quickly. Is that the way lenders see it or do the high balances scare them off? ETA: Even if I don't pay the bals down before the statements cut, my overall util will still be less than 30%. I can also pay the bals down to less than 30% if that's the best thing to do. Hope that helps w your advice.


The best bet for your FICO scoring generally is to keep (a) each reported balance at 28% or less (b) your aggregate reported balances at 6% or less and (c) as many accounts as possible [but not none] reporting at zero.

 

I do not think it will help your chances for CLI approval to have a lower score. It will help your CLI chances to have a higher score.

 

Internally it often does improve your chances for a CLI for the lender to see a lot of usage of the card, but letting the balance report is of no consequence to them, as they know what you have been spending.

 

So yes you should make payments prior to statement cut.


Total revolving limits 654000 (575000 reporting)

Message 5 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

I am of the mind that people should just let things report organically. As long as you're keeping your aggregate down below 10% and you're not hitting past the 68.9% threshold, I wouldn't even stress about it. I was micromanaging my balances and since I've stopped, I've had success getting cards I was previously getting declined for and CLIs on existing ones. My personal maximum individual threshold I'm comfortable with is 50% before I'll pay it down a bit before the statement cuts. 

Keep in mind that the average person has no idea of the utilization thresholds that we (ab)use here and they all do just fine with using and paying their cards. 




Message 6 of 28
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Community Leader
Super Contributor

Re: Should I pay bal down before statement cuts?


@WhatTickaWhat wrote:

Wanted to add that I have experienced banks give CLI when pif AND also when taking on LARGE balances.

 

I am sure it is due to my credit history, but I have received increases when asking after 

maintaining a $0 balance with little to no use,

however I have also received CLI when my balance is up to 88% utility. (multiple times)

 

AND I am not joking when I say that I have received AUTO CLI after "maxing out" my utility

over 90% on higher card limits. *however this was between statements,

util was under 88% when statement cut but did receive AUTO cli.

 

It really depends on your history/profile. 

 

* I will note that I am not fully versed in the NEW TO COME FICO scoring models, but it

seems that high balance history may effect scores, possibly to err on the side of negative

but not sure how that would play out on CLI verses just credit scoring.

 


May I ask if these maxed out cards were NFCU products because they're known for their leniency. If no, what lenders were ok with this type of UT?


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnet $40.5K || NFCU CashRewards $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || CitiCostco $12.7K || NFCU Platinum $12.5K || Apple Card $6.5K ||
Message 7 of 28
Highlighted
Super Contributor

Re: Should I pay bal down before statement cuts?

Anything is possible but we’re talking about best practices for best scores to give the best chances of an increase. Of course the lender likes to see usage on their card, but they also like to see it paid down regularly and not high utilization continually.

Although scoring is only one factor, the higher the score the better your odds, all other things remaining constant.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.



RIP:



 

 

 

 




Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 8 of 28
Highlighted
Moderator

Re: Should I pay bal down before statement cuts?

Unless you're applying for mortgage and/or auto loan, dont get into a habit of paying before statement is available.
I did it because I thought AZEO would make a huge difference and it didn't. A few puny points across all FICO 8 classic scores
While it was a failure in that respect, it managed to convince me that balances reporting meant doom, gloom, and sky touching the pavement.

You're basically giving up float in exchange for few imaginary digits that only exist if someone is looking at them.

It wont help you with getting CLI any faster, or higher amount.
Another drawback to not reporting balances is making it appear like you're not using what you have, so why give you more?


Message 9 of 28
Highlighted
Valued Contributor

Re: Should I pay bal down before statement cuts?

It’s usually better to pay off balances below 30% before statement cuts. Personally, I pay down all my balances and leave only 1 - 8% to report.




My Cards:






Profile Type: New, Thick, 100% Clean
INQ's: EQ: 0 TU: 1 EX: 3 (last 12 mo.)
Recent Accounts: 4 (last 24 mo.)
Total CL: 28.95k Util. 3% AAoA: 1yr, 8mo.
AoOA: 2 yrs, 8 mo. AoYA: 0 mo. 100% PIF.





myFICO Member since: July 21, 2018 | Joined Community: Aug. 17, 2018 | Starting Scores: EQ: 716 TU: 738 EX: 698
Message 10 of 28
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