Pretty sure I screwed up - Utilization

[RBFool]

I have my wonderful Quicksilver card (not joking, love this thing) and I've been charging my monthly bills to it and paying it off for a few months.

Everything was going great! Then I dediced to put a little bit more money on it and buy christmas presents (yeah this was 4-ish months ago or so?) on it and use the "0 apr for 2months" thing I've read about here. So I did that. About a month after our shopping trip I lost my job. I racked about 2k extra (outside of bills) on my card because I was going to pay it off at 1k extra per month for 2 months. But I lost my job so I wasn't able to. So I got 2k extra on my card that I'm paying interest on. I've got a new job as of 2 months ago so I'm slowly paying it off now.

I'm sure my scores are pretty shot but my question/problem becomes in July when I have my utilization around 9% to start apping... Will my score just jump up because my utilization is going from 50% down to 9% after 1 month of "good utilization"? or does it take a couple of months to get to "good"? I know that utilization doesn't have a memory, but what I'm doing can't be good (not that I have a choice).

[CenturyChild]

Utilization only hurts your score at that point in time.

So Yes, it will improve once everything updates.

If you ar at 60% now, and pay everything down to 10% overall, your score will jump once those all report the new balances.

The only things that really sticks with you for a long period of time will be missed paymentsd, collections or other major negative things.

New Accounts and Inquiries really only hurt about 6 moths and Inq have no impact after 12. But overall, these are minor hits anyway.

[jamesdwi]

your report will be fine, only CapitalOne will care about you carrying a balance, other lenders might even like the fact, wow.. he carriied a balance of $1800  for two months and paid it off... ca-ching... the bean counters like makng money on interest, as long as its paid off in the end all is good. 

[RBFool]

Thanks! That's helpful to know. I needed the reminder... One more thing. I shouldn't app at my july mark until I can pay it under the 10%? Just for app sakes of course.

[jamesdwi]

Lower UTL gets you bigger starting CL's, its always better to wait (garden) if you don't need the credit imediately. 

[taxi818]

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@RBFool wrote:

I have my wonderful Quicksilver card (not joking, love this thing) and I've been charging my monthly bills to it and paying it off for a few months.

Everything was going great! Then I dediced to put a little bit more money on it and buy christmas presents (yeah this was 4-ish months ago or so?) on it and use the "0 apr for 2months" thing I've read about here. So I did that. About a month after our shopping trip I lost my job. I racked about 2k extra (outside of bills) on my card because I was going to pay it off at 1k extra per month for 2 months. But I lost my job so I wasn't able to. So I got 2k extra on my card that I'm paying interest on. I've got a new job as of 2 months ago so I'm slowly paying it off now.

I'm sure my scores are pretty shot but my question/problem becomes in July when I have my utilization around 9% to start apping... Will my score just jump up because my utilization is going from 50% down to 9% after 1 month of "good utilization"? or does it take a couple of months to get to "good"? I know that utilization doesn't have a memory, but what I'm doing can't be good (not that I have a choice).

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No. your scores are not shot. thats the point of having credit. so it does not matter as utilization has no memory. the moment you pay it down. not only will scores go back up. but they will climb to level they would have  been had you not had high usage. so even higher that what they were. also. if 2k. will hurt your util. the moment you pay that down. time to apply and get more limits so a lousy 2k does not hurt at all. im sure if i used 20k. it would only be at 20 percent util. thats the point of joining the forum. to learn and get stronger in the credit world. good luck. diversity is the key in credit world.

[Anonymous]

To give you an idea, my available credit was fairly low up until February of this year. I ran 2k-3k a month through cards and had total available credit of around 4k. I did not play the Util game and had reported balances around 2k-3k all the time even though I PIF each month. Last January I decided to figure this whole credit bit out and refinance my boat and vehicle. I did the Util dance and reduced my Util to 1% for February, my scores went from around 680 to 750+ within a couple weeks with TU at 780+. I used that to get the loans refinanced and get some real credit lines. I now have 1.99% interest on my loans and just shy of 80k in credit lines. My scores stay up in the 750+ range even without messing with Util each month as I stay below 10%. The only hit was AAoA, but I had 15+ accounts (all low limits or loans) reporting with the oldest at 9+ years so even with a few new cards I did not take much of a hit there.

So as everyone has stated Util has no memory and is very much a snapshot in time. I love looking at the charts showing a 680 score in January and a 780 score in February.

[Anonymous]

I got carried away with my wedding, or my wife did, and loaded up a card.  My credit tanked and I was about to freak out.  I paid it off after about six months and my score went right back to where it was.  It was kind of funny.