UTILIZATION ???

[Anonymous]

 this might be a dumb question ... but , does it matter how much of my utilization ( limit) i use every month as long as its paid in full before the due date? or should i just stay under 10%. what i use i have in cash to pay off rite after purchase. 

[Anonymous]

Use your cards all you want and pay them down to a point you're comfortable with for reporting. Rinse and repeat each month.

[Horseshoez]

I agree with @Anonymous, I've been charging my cards upwards of 90% of their limit and then paying them off before the due date; this in turn means there might be a charge or three which sneak in between due date and statement cut date.  My scores are doing nothing but going up. 

[Slabenstein]

As has been stated above, what matters for util is what balances you report to the bureaus.  So if you're allowing high util to report and then PIF'ing that balance before the due date, that matters b/c it's going to have a negative impact on your FICOs.  But if you're charging a high percent of your limit, paying it down to 9.4% before it reports, and then PIF'ing the remaining balance after, then your high limit usage doesn't matter b/c it doesn't report.

[Anonymous]

Also what "matters" even when it comes to Fico scores is very profile-specific.

Cornelius has a clean/thick/aged file with scores in the 800's when his reported utilization is low.  If he allows high utilization to report (but is still paying in full monthly) his scores may drop to the mid-upper 700's.  On a profile such as this, it's not a big deal at all.

Rupert has a dirty/thin/young file with scores in the mid 600's.  If he allows high utilization to report (even if also paying in full monthly) his score may drop to the low 600's or upper 500's.  A Fico score shift such as this on his profile is a much worse "look" than is the case on a stronger profile and the elevated assessed risk by any given lender could result in AA.

For me, it really comes down to profile strength.  It's not as simple as a Transactor is a Transactor and paying in full monthly is all that matters.  On a weaker profile, reported utilization may matter more and managing reported balances by paying down/off before statement cut could be a smart move.

[SouthJamaica]

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@Anonymous wrote:

 this might be a dumb question ... but , does it matter how much of my utilization ( limit) i use every month as long as its paid in full before the due date? or should i just stay under 10%. what i use i have in cash to pay off rite after purchase. 

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It's not a dumb question.

"Utilization" in FICO algorithms isn't really utilization at all, it's based entirely on the balance which is reported, regardless of how the card was "utilized" during the month.

In most cases, but not all, the reported balance is the statement balance.

[Horseshoez]

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@SouthJamaica wrote:

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@Anonymous wrote:

 this might be a dumb question ... but , does it matter how much of my utilization ( limit) i use every month as long as its paid in full before the due date? or should i just stay under 10%. what i use i have in cash to pay off rite after purchase. 

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It's not a dumb question.

"Utilization" in FICO algorithms isn't really utilization at all, it's based entirely on the balance which is reported, regardless of how the card was "utilized" during the month.

In most cases, but not all, the reported balance is the statement balance.

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Agreed.  I have noticed on some of my credit reports the high balance for the month is shown as well as the statement balance.  I'm wondering if FICO 10 looks at the high intra-month balance.

[SouthJamaica]

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@Horseshoez wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:

 this might be a dumb question ... but , does it matter how much of my utilization ( limit) i use every month as long as its paid in full before the due date? or should i just stay under 10%. what i use i have in cash to pay off rite after purchase. 

---

It's not a dumb question.

"Utilization" in FICO algorithms isn't really utilization at all, it's based entirely on the balance which is reported, regardless of how the card was "utilized" during the month.

In most cases, but not all, the reported balance is the statement balance.

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Agreed.  I have noticed on some of my credit reports the high balance for the month is shown as well as the statement balance.  I'm wondering if FICO 10 looks at the high intra-month balance.

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No it does not.

(Exception: some of the older scoring models look at the high balance on an Amex charge card -- as opposed to credit card -- and treat the high balance as a credit limit for determining "utilization". Modern scoring models disregard the charge cards altogether for dollar balance percentage utilization computation)

[JtAlmond]

Staying under 6% utilization was recommended by the free credit sites to make my scores increase.  I read those with the highest scores use about 7% of their available credit while the industry says to keep credit utilization under 30%.

I recently applied for a credit limit increase and was shot down because of low utilization.  Ive been using my card sparingly for score increases but that is held against me when I ask for a credit limit increase.  I guess fair is fair, I can just keep paying as I go.  It's not as if I charge high ticket items and if I did I'd use a debit card so I don't max out my low limit card.  I wanted a heavier card it's not that I actually needed the higher credit limit.  I recently applied for a Wells Fargo card fetching some  dim results.

[EAJuggalo]

As stated above, what matters for utilization is what gets reported.  Usually what gets reported is whatever is on the statement.  However Chase automatically reports anytime you pay your balance to 0.  So even if your statement cuts at 99%, as soon as you pay it off it will report 0.