cancel
Showing results for 
Search instead for 
Did you mean: 

Question regarding utilization on new card

tag
missionpossible
Valued Member

Question regarding utilization on new card

Long sob story here, that I won't torture you all withthe entire thing (just a little of it)

 

I am now starting my entire life and credit over, at 55 years old after losing my home last month.  I am trying to start working on repairing my awful credit immediately, since I am not getting any younger and the foreclosure hit on my credit, combined with the fact that since my husband died, I closed all credit cards, had several charge offs I ignored since I stuck my head in the sand after he died.  Now, I have charges offs, a foreclosure, and no open credit lines at 55.  Oy.  And a possible deficiency judgement of 57,000 which means I may even be filing BK on top of everything else in the very near future.

 

No ones fault buy my own, but I am putting on my big girl panties and trying to get my act together finally.  Its been 4 years, I have pouted enough.

 

SOOO.......

 

1st step, I have received a Cap One secured CC with 200.00 limit (don't laugh)

1st Premier with 300.00 limit. (again, I know, but I have to start over somewhere)

 

I understand that I am to make sure one reports at zero, and one at 9% of CL. 

My question is, for example, can I charge 200 on the Cap one, and pay it in full before the statement date?  Or should I ONLY be charging 9% tops? 

 

I don't plan to use the cards for much, but then I thought, hey, I have to pay utilities each month anyway, why not use the card to pay them, then pay the card off.  Its money I would have to spend anyway, so I don't think (I may be wrong) that I would be using the cards for unnecessary items, just playing with the way I pay my bills going forward.  Or at least for the next several years till I crawl out of this hole.

 

Also, If I used this method, would the payment need to be made before the statement date in order for it to show low utilization, or before  the due date, that is something that I am not certain on to make it report in a positive manner on my CR.

 

Any help would be appreciated...thanks!

Message 1 of 21
20 REPLIES 20
ApexdvToo
Regular Contributor

Re: Question regarding utilization on new card

I doubt any of us will be laughing at those TLs here: we've *all* been there!  If your CL is $200 then set yourself a safety stop and only use it up to $190 or so - it's up to you!  Then pay it down.  Yes, a rule of thumb is anywhere from 3% - 9% UTIL seems to be what FICO likes but UTIL is not about how much you've placed on the card during the entire month rather, only what was reported.  With that in mind you need to determine your cut-date also known as the "statement date".  Take a look at your monthly bill and you should find the "statement date" or similar.  CCCs will typically report wthe balance as of that date or very soon thereafter or before.

Find the statement date (phone them up if you need) and make sure to make your payment so that it will post within 3-5 prior.  Then set that card to the side and don't touch it (other than additional payments) until *after* you have the new statement.  That is the important date.  But remember, you will also have a minimum due on a "due date" that you must meet as well otherwise you could end up with a baddie.

 

Example:  My CapOne Secured Card cuts each month on the 15th ... "statement date" as listed on the monthly bill.  It gives the balance as of that date which means I always make sure to get the UTIL down by the 10th or 11th at latest.  Then I sock-drawer it until the invoice is ready.  Then, it gives me a $10 minimum or whathaveyou due by the 10th or so.  I make sure to pay that amount by the due date.  Make sense?  Pay before the statement date down to a good UTIL and always make your minimums on time and you should begin seeing your score grow as the account ages.

 

I ceratinly hope I made sense ...


Starting Score 4/15/2012:579 Ex-FAKO, 572 Eq-FAKO, 546 TU-FAKO (all were sub-500 in 2011)
FICO as of 3/08/2013: 627 EQ, 647 TU
FAKO as of 3/23/2013: 638 EX, 652 EQ, 648 TU
Goal 1: 600 FICO achieved 10/2012!, Goal 2: 650 FICO Across the Board - Let's take Baby-Steps!
**Amex Optima $1.3k, GE/CareCredit $1k, CapOne Secured $900, Barclaycard Rewards $500, CapOne Rewards $500, Citi/Shell $200**
Seedling Garden Club Member - Last App: 03/18/2013 - Goal: No apps for One Year: 3/18/2014
Message 2 of 21
missionpossible
Valued Member

Re: Question regarding utilization on new card

Thank you so much.  So pay before the statement date, and then pay again before the due date and I should be good is what I take away from that.  Makes sense, I appreciate it.  Wish me luck! Its gonna be a long slow crawl to the 600's, then maybe before I die, the 700 club.  Smiley Frustrated

Message 3 of 21
ApexdvToo
Regular Contributor

Re: Question regarding utilization on new card

Oh ... I meant to add: you could certainly use a card as much as you are comfortable with during a given billng period.  Say you have a $200 limit - I've read of people spending $1000 per month on a CL that size - they simply pay the charge off as soon as it posts thereby freeing up the CL.  Now I am not recommending this or NOT recommending this - it is up to you.  It would be seen as heavy usage by the CCC and from what I hear some of them very much like that after all, they get paid every time you use the card.  Again ... imprtant: low UTIL should report ... and always pay on time Smiley Happy


Starting Score 4/15/2012:579 Ex-FAKO, 572 Eq-FAKO, 546 TU-FAKO (all were sub-500 in 2011)
FICO as of 3/08/2013: 627 EQ, 647 TU
FAKO as of 3/23/2013: 638 EX, 652 EQ, 648 TU
Goal 1: 600 FICO achieved 10/2012!, Goal 2: 650 FICO Across the Board - Let's take Baby-Steps!
**Amex Optima $1.3k, GE/CareCredit $1k, CapOne Secured $900, Barclaycard Rewards $500, CapOne Rewards $500, Citi/Shell $200**
Seedling Garden Club Member - Last App: 03/18/2013 - Goal: No apps for One Year: 3/18/2014
Message 4 of 21
missionpossible
Valued Member

Re: Question regarding utilization on new card

Hmmm.  So, I could pay my electric bill with it.  Pay Cap one.  Then pay my gas bill with it, pay cap one, just make sure its at 9% before statement date and stays there until after statement date.  I may test it and see how it goes.  I look at it this way, I have to pay those bills anyway, might as well use the card and make it work for me.  Thanks again!

Message 5 of 21
ApexdvToo
Regular Contributor

Re: Question regarding utilization on new card


@missionpossible wrote:

Thank you so much.  So pay before the statement date, and then pay again before the due date and I should be good is what I take away from that.  Makes sense, I appreciate it.  Wish me luck! Its gonna be a long slow crawl to the 600's, then maybe before I die, the 700 club.  Smiley Frustrated


You'll be just fine!  I started far below you and I know my score had reached even lower than when I started say ... the upper 400's.  Now, I pushing 650 in under a year!  You'll get there!  And if you need a little nudge along the way I've found these guys here in the FICO forest are awesome at keeping your spirits up Smiley Happy


Starting Score 4/15/2012:579 Ex-FAKO, 572 Eq-FAKO, 546 TU-FAKO (all were sub-500 in 2011)
FICO as of 3/08/2013: 627 EQ, 647 TU
FAKO as of 3/23/2013: 638 EX, 652 EQ, 648 TU
Goal 1: 600 FICO achieved 10/2012!, Goal 2: 650 FICO Across the Board - Let's take Baby-Steps!
**Amex Optima $1.3k, GE/CareCredit $1k, CapOne Secured $900, Barclaycard Rewards $500, CapOne Rewards $500, Citi/Shell $200**
Seedling Garden Club Member - Last App: 03/18/2013 - Goal: No apps for One Year: 3/18/2014
Message 6 of 21
ApexdvToo
Regular Contributor

Re: Question regarding utilization on new card


@missionpossible wrote:

Hmmm.  So, I could pay my electric bill with it.  Pay Cap one.  Then pay my gas bill with it, pay cap one, just make sure its at 9% before statement date and stays there until after statement date.  I may test it and see how it goes.  I look at it this way, I have to pay those bills anyway, might as well use the card and make it work for me.  Thanks again!


That's how I use my Amex Oasis ... pay my regular monthly items, wait for it to post, make an online payment for the amount, continue.  I created a Google Calendar with the pertinent dates to remind myself so that I'll not miss anything.  Between that and Quicken I have beeps coming at me every few days to keep me on my toes.  But that's just my own way to shuffle on through this madness.Smiley Frustrated


Starting Score 4/15/2012:579 Ex-FAKO, 572 Eq-FAKO, 546 TU-FAKO (all were sub-500 in 2011)
FICO as of 3/08/2013: 627 EQ, 647 TU
FAKO as of 3/23/2013: 638 EX, 652 EQ, 648 TU
Goal 1: 600 FICO achieved 10/2012!, Goal 2: 650 FICO Across the Board - Let's take Baby-Steps!
**Amex Optima $1.3k, GE/CareCredit $1k, CapOne Secured $900, Barclaycard Rewards $500, CapOne Rewards $500, Citi/Shell $200**
Seedling Garden Club Member - Last App: 03/18/2013 - Goal: No apps for One Year: 3/18/2014
Message 7 of 21
kroberts67
Established Contributor

Re: Question regarding utilization on new card

This part confuses me but I think I've been doing it right.  I pay by the due date and then don't use it again until after statement cuts, which is a few days after the due date. The way people talk about the statement cut date is confusing to me so I kind of look at it as one & the same as long as I don't use the card until after the statement cut date (a few days after the due date).  In this case, if it's paid by the due date I'm safe?

FICO: EQ 814 | TU 847 | EX ? (Started in the low 500's... you can do it!)

Amex BCE $25000, Amex AP $20000, SFFCU Visa $15000 + LOC $5000, USAA Amex $6000, USAA MC $7000, Cap1 $9500, Freedom $12000, Slate $500, Barclays "RIP" SM $11500, USBank Cash+ $12500, Citi Diamond $11200, Citi Double Cash $12000, Care Credit $13500k.
My Credit Repair Journey
Message 8 of 21
missionpossible
Valued Member

Re: Question regarding utilization on new card

Aw, thanks.  Problem is, that fico is from 3/13/2013.  I'm not sure that all the horrid reporting has actually hit the reports yet.  Foreclosure shows, but as of Jan.  Have to see what happens in the next few months, and like I said, I may even be filing BK in the next month, so between the foreclosure and BK, I may end up much lower, or, maybe not.  I have no idea really where I stand right now.  That is why I am trying to bounce back as quick as possible.  Now to work on my C/O's, hoping that will help a little.  Don't really owe much, that is what is sad.  Its time for me to get to work on getting all the baddies fixed that I can!

Message 9 of 21
missionpossible
Valued Member

Re: Question regarding utilization on new card

That sounds like a plan I will try.

 

Amex.  Now that would be something, I would know that I did it right if I ever had an Amex.  Dreaming, I think. 


@ApexdvToo wrote:

@missionpossible wrote:

Hmmm.  So, I could pay my electric bill with it.  Pay Cap one.  Then pay my gas bill with it, pay cap one, just make sure its at 9% before statement date and stays there until after statement date.  I may test it and see how it goes.  I look at it this way, I have to pay those bills anyway, might as well use the card and make it work for me.  Thanks again!


That's how I use my Amex Oasis ... pay my regular monthly items, wait for it to post, make an online payment for the amount, continue.  I created a Google Calendar with the pertinent dates to remind myself so that I'll not miss anything.  Between that and Quicken I have beeps coming at me every few days to keep me on my toes.  But that's just my own way to shuffle on through this madness.Smiley Frustrated


 

Message 10 of 21
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.