What is reported as credit utilization?

[Anonymous]

Good morning,

My question is l, I received a QuicksilverOne Cap1 credit card with a $300 CL and activated it yesterday. My first bill is due two months from now in March 5th. There is a balance of $39 for the AF, if I pay that off right now to $0 before due date, can I reuse my card again up to 10% to keep my utilization low and pay it off before the due date again?

Or will my utilization be based on the $39 AF plus the 10% I use again after paying of AF?

Thanks in advance.

[RobertEG]

Each creditor establishes a date that they report information to the CRAs.

They normally report only once a month, as it is expensive and time consuming to produce updates on each account.

It is the balance on the account at that date which becomes your monthly balance for purposes of calculating your % util of revolving credit.

If you pay part or all of the current balance before the reporting date (with enough time for it to be administratively processed and posted by the creditor to their internal records), it will not be included in the balance reported to the CRA, and thus not become part of your % util scoring.

Contact the creditor for info as to their normal CRA reporting date.

[Anonymous]

DUE DATE is not the date you should be interested in, if CC utilization is your concern.   Rather the date you should care about is when your first statement is expected to print.  If you can't tell that from looking at your online interface, you should give them a call and ask.

On the day that your statement prints, it will have an Amount Owed at the top.  That amount will be reported to the three credit bureaus, either that day or the next.  If you want that amount to be a low positive number (best choice) then you need to get the balance paid down before the statement prints.  For example, you might pay it down to $5.  FICO likes it when your total debt is low (< 8.99% utilization) but doesn't like it when all cards report $0.

If you go that route, then your statement will print with a small balance.  ($5, $10, whatever.)  That small balance will then be DUE roughly 25 days after the statement date.

This strategy, as you'll see, is sometimes called a Two Payment strategy.  In the week before the statement prints, you pay down the balance to a low positive number.  Then in the week after you pay that amount in full.  In between you can spend as much on your card as you like.

[SouthJamaica]

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@Anonymous wrote:
Good morning,

My question is l, I received a QuicksilverOne Cap1 credit card with a $300 CL and activated it yesterday. My first bill is due two months from now in March 5th. There is a balance of $39 for the AF, if I pay that off right now to $0 before due date, can I reuse my card again up to 10% to keep my utilization low and pay it off before the due date again?

Or will my utilization be based on the $39 AF plus the 10% I use again after paying of AF?

Thanks in advance.

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FICO utilization is almost always based on the statement balance.

You can use the card as much as you want within the credit limit; just make sure your statement balance is less than 10% (in your case $30).

Yes you should pay off the annual fee right away.

[Anonymous]

Thanks for such a detailed response. Appreciate it.

So pay down to low balance few days before statement cuts, then 25 days after statement, spend what ever and pay again before next statement cuts...

Since my card was activated in the middle of a cycle, my due date is March 5th and statement cuts March 8. Should I pay before then, or should I pay before February 5th even tho they said there will be no statement feb?

[Anonymous]

SouthJamaica,

Thank you, exactly what I needed to know. Just wanted to see if it was balance that’s reported for utilization, or if it were based on transaction dollar amounts even after paying down before statement cuts.

Thank you.

UsoDak