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Proper payment timing for ideal utilization?

Vestpocket
New Visitor

Proper payment timing for ideal utilization?

My TU FICO 8 score just dropped by 20 points (to 809) due to "balance dropped by $6 to $0".

 

I have been purposely paying off my entire balance (and sometimes overpaying on purpose) on every card just before the statement closing date to keep utilization to $0. Two of my cards are Capital One, so the CLs are low <$8K, can't be raised (I'm tranched) and my spending across 3 cards is around $2K per month, supposing I don't actually make a large retail purchase that month.  My normal spending would be "high utilization," I believe.  I never carry a balance.

 

I know that slight utilization is better than no utilization, but how exactly should I be timing my payments to keep my score healthy and not bouncing around by 20 points over six bucks?

4 REPLIES 4
RSX
Valued Contributor

Re: Proper payment timing for ideal utilization?

that last line is your answer

let 1 report with $10-20

then pay it off right after it reports, so you won't pay any interest

 

you are currently doing ALL ZERO

 

look up AZEO - all zero except one - there are lots of posts about it

Dec 16/2019. EX. 721. EQ. 723. TU 746
Dec 29/2020 EX. 729 EQ. 723 TU 746
Sept 9/2021 EX. 734 EQ. 737 TU 746
Inq. EX 5 EQ 2 TU 5 - - CC 4x24, 3x12, 0x6
Amex BCP $32k - Apple GS $19k - BMW/Elan $9k - Cap1 QS $16.7k - Chase Amazon $13.6k - Chase Bonvoy Boundless $10k - Chase United Club Infinite $26k - Citi DC $14.5k - CreditUnion1 $9k - DiscoverIT $23k - HSBC Gold - $13k - Penfed Gold - $12.5k - USBank Cash+ -$24k - HSBC LOC - $13.5k - PenFed LOC - $20k
Message 2 of 5
HeavenOhio
Community Leader
Senior Contributor

Re: Proper payment timing for ideal utilization?

For the most part, I want to bring my cards down to their desired balances no later than the day before the reporting date. If a weekend or a holiday is involved, you might want to add a day or two. Payments made on weekends may not fully post until Tuesday morning. How your banks handle payments might be something to test with small payments at non-critical times.

Message 3 of 5
mimi64
Valued Member

Re: Proper payment timing for ideal utilization?

Your score is actually quite "healthy" as is. Is there a specific reason you want to keep it above 810 or so?

Message 4 of 5
SouthJamaica
Super Contributor

Re: Proper payment timing for ideal utilization?


@Vestpocket wrote:

My TU FICO 8 score just dropped by 20 points (to 809) due to "balance dropped by $6 to $0".

 

I have been purposely paying off my entire balance (and sometimes overpaying on purpose) on every card just before the statement closing date to keep utilization to $0. Two of my cards are Capital One, so the CLs are low <$8K, can't be raised (I'm tranched) and my spending across 3 cards is around $2K per month, supposing I don't actually make a large retail purchase that month.  My normal spending would be "high utilization," I believe.  I never carry a balance.

 

I know that slight utilization is better than no utilization, but how exactly should I be timing my payments to keep my score healthy and not bouncing around by 20 points over six bucks?


Welcome to the All Zero Penalty.

 

The way to totally optimize your revolving utilization is to let one bankcard report a small balance each month while the others report zero balances. That one missing balance gets you docked, typically in the neighborhood of 20 points Smiley Happy

 

If, however, you were to let more than one, but less than a third, of your revolvers report small balances, you would probably fare as well in all scoring models except in the mortgage scores, which really do appreciate your having almost all zeros.


Total revolving limits 698000 (605000 reporting) FICO 8: EQ 721 TU 742 EX 715

Message 5 of 5
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