Hitting that sweet spot for utilization

[Anonymous]

Hey guys, 

I'm having a hard time hitting the sweet spot with my utilization on my card.  The first month I had my card I had no idea when the statement date was and when the statement closed, I carried $350 of my $1,200 limit and my scores took a huge hit (paid in full for other things but this charge posted right before statement ended, then the next month I paid it off and charged $50 dollars to that card but paid everything in full by statement end and my scores took another hit (reason: Balance changed to 0).  Now I'm paranoid to even touch my card and go straight to my debit but what is the ideal % I should be aiming for?  I've also been reading around and I'm confused cause some posts say to pay most off what you charge by statement end and carry a balance while others say to just pay in full before statement ends so it shows up as 0.  Any advice would help me a lot.

[Santi78342]

You want all but ONE of your cards to report a 0 balance. On the ONE card you DO let report a balance, you want it within 1-9% of the credit limit. So if your limit is $1,200, you want it to report a balance between $12-$108. 

[Anonymous]

Oh so I should only be using one?  I see, thanks for the reply.  Also if I never use my other cards, would that be bad as well or should I rotate which card I use each month?

[Anonymous]

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@Anonymous wrote:

Oh so I should only be using one?  I see, thanks for the reply.  Also if I never use my other cards, would that be bad as well or should I rotate which card I use each month?

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You can use any of them any time you like but what they were getting at is to just let one report - meaning that you'd pay the rest of the cards off before the statement cuts so the statement balance is $0.

Like, example, my statement for Discover cuts on the 5th of each month so I just got finished putting in a payment for all but ~$25, so it'll report with low utilization.  All of my other trade lines have a $0 balance right now.

[Anonymous]

Oh just let the statement cuts with a balance on one of the cards but using the others and paying before statement ends is fine, got it.  Thanks guy, dunno why I've been afraid to use my card. Kudos.

[jbsea]

I had a problem with this also.  I also had to learn the lesson of the statement date.  I had paid one of my card off before the DUE date but did not realize the statement day was the big date to look out for.  The good thing is that I never had to learn that lesson again.  The good thing is that your scores go right back up after you bring your utilization back down. 

[kjel]

You might have to tinker around with your utilization %. My sweet spot is 3-5% otherwise I lose a few points.

[Anonymous]

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@kjel wrote:
You might have to tinker around with your utilization %. My sweet spot is 3-5% otherwise I lose a few points.

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My sweet spot is 1%. Played with it for two years. Use cards but pay them so they report zero to the CBs except one.

[racer-x]

My sweet spot is 82%.  I just gained 6 pts.

[CluelessJohn]

MacFrosty:  Realize that utilization is only part of FICO scoring.  Also, realize that utilization is just a snapshot of where you stand one a particular card when the statement cuts.  Utilization can be played with when the need arises (eg you plan to apply for a load, new card, etc).  What can't be played with is a long track record of using your cards and paying them in full and several days before the due date.  That makes the most sense in the long run.   The CCC's will see you using their card responsibly and will reward that behavior with higher CLs.  Higher CLs make the utization game much easier to play and more beneficial. An artifical $25 balance on a card with a $5K CL looks much than having a $300 CL.

Focus on using your cards responsibly and only worry about utilization when you need to bump up your FICO score.