Question on what's on a credit report

[MikeyMagic]

Hello all, have a question about credit reports.

Let's say on all 3 credit reports it shows a total utilization of 2%. Then a company mid cycle reports a big usage and now the utilization on all 3 reports is 50% and for the time being your credit score drops a lot.

If the balance is fully paid on the big amount and at the end of the billing cycle it's reported down to $0 so the utilization is again 2% on all 3 credit reports - would applying for a new credit card be riskier to get approved because the company could see the high balance that was on there until it was just paid off?

I know I've read that utilization has no memory but is that really true? Sure your credit score would go back up once the utilization is at 2% again from 50%, but wouldn't it be harder to get approved for a new card because the bank or card company could see the utilization was 50% just 1 day ago plus see that high balance a day ago too?

Thanks, hope I'm not confusing anyone.

[JoeRockhead]

I think you're over thinking all this @MikeyMagic. True, utilization has no memory. What matters as far as your UTI is what's reported, not what % it may or may not have went up to in the interim. It's good to use your credit, even if you use a large percentage of it during a reporting cycle. Paying it down shows you're managing your credit well. As long as it's not reporting high for a particular month, you're good.

[SouthJamaica]

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@MikeyMagic wrote:

Hello all, have a question about credit reports.

Let's say on all 3 credit reports it shows a total utilization of 2%. Then a company mid cycle reports a big usage and now the utilization on all 3 reports is 50% and for the time being your credit score drops a lot.

If the balance is fully paid on the big amount and at the end of the billing cycle it's reported down to $0 so the utilization is again 2% on all 3 credit reports - would applying for a new credit card be riskier to get approved because the company could see the high balance that was on there until it was just paid off?

I know I've read that utilization has no memory but is that really true? Sure your credit score would go back up once the utilization is at 2% again from 50%, but wouldn't it be harder to get approved for a new card because the bank or card company could see the utilization was 50% just 1 day ago plus see that high balance a day ago too?

Thanks, hope I'm not confusing anyone.

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From a FICO score perspective, utilization has no memory.

But in the event of a human review of a credit application, they can see everything in the reports.

[MikeyMagic]

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@SouthJamaica wrote:

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@MikeyMagic wrote:

Hello all, have a question about credit reports.

Let's say on all 3 credit reports it shows a total utilization of 2%. Then a company mid cycle reports a big usage and now the utilization on all 3 reports is 50% and for the time being your credit score drops a lot.

If the balance is fully paid on the big amount and at the end of the billing cycle it's reported down to $0 so the utilization is again 2% on all 3 credit reports - would applying for a new credit card be riskier to get approved because the company could see the high balance that was on there until it was just paid off?

I know I've read that utilization has no memory but is that really true? Sure your credit score would go back up once the utilization is at 2% again from 50%, but wouldn't it be harder to get approved for a new card because the bank or card company could see the utilization was 50% just 1 day ago plus see that high balance a day ago too?

Thanks, hope I'm not confusing anyone.

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From a FICO score perspective, utilization has no memory.

But in the event of a human review of a credit application, they can see everything in the reports.

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So does this sum up what you posted? If my utilization on all 3 credit reports shows me at 45% total, then a week later it shows it as 2% and then I apply for a credit card I want - assuming no human review -will I have the same chances I had prior to the 45% credit utilization showing up? 

[GZG]

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@MikeyMagic wrote:

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@SouthJamaica wrote:

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@MikeyMagic wrote:

Hello all, have a question about credit reports.

Let's say on all 3 credit reports it shows a total utilization of 2%. Then a company mid cycle reports a big usage and now the utilization on all 3 reports is 50% and for the time being your credit score drops a lot.

If the balance is fully paid on the big amount and at the end of the billing cycle it's reported down to $0 so the utilization is again 2% on all 3 credit reports - would applying for a new credit card be riskier to get approved because the company could see the high balance that was on there until it was just paid off?

I know I've read that utilization has no memory but is that really true? Sure your credit score would go back up once the utilization is at 2% again from 50%, but wouldn't it be harder to get approved for a new card because the bank or card company could see the utilization was 50% just 1 day ago plus see that high balance a day ago too?

Thanks, hope I'm not confusing anyone.

---

From a FICO score perspective, utilization has no memory.

But in the event of a human review of a credit application, they can see everything in the reports.

---

So does this sum up what you posted? If my utilization on all 3 credit reports shows me at 45% total, then a week later it shows it as 2% and then I apply for a credit card I want - assuming no human review -will I have the same chances I had prior to the 45% credit utilization showing up? 

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computers can read too, and utilization tells a story, it's pretty obvious when somebody is carrying balances and making minimum payments compared to when somebody is paying off their bill every month in full 

if for the last 18 months you were making minimum payments, it wouldn't matter much if you were at 2% now, you'd look risky

but if for the last 18 months you've been paying your bill off in full, you'd look in great shape

so yeah, use your cards normally, pay them off in full every month, optimize your chances before you submit applications by giving yourself the highest score you can having low balances, and you'll have the highest odds to be approved for the best limits going foward 

[MikeyMagic]

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@GZG wrote:

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@MikeyMagic wrote:

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@SouthJamaica wrote:

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@MikeyMagic wrote:

Hello all, have a question about credit reports.

Let's say on all 3 credit reports it shows a total utilization of 2%. Then a company mid cycle reports a big usage and now the utilization on all 3 reports is 50% and for the time being your credit score drops a lot.

If the balance is fully paid on the big amount and at the end of the billing cycle it's reported down to $0 so the utilization is again 2% on all 3 credit reports - would applying for a new credit card be riskier to get approved because the company could see the high balance that was on there until it was just paid off?

I know I've read that utilization has no memory but is that really true? Sure your credit score would go back up once the utilization is at 2% again from 50%, but wouldn't it be harder to get approved for a new card because the bank or card company could see the utilization was 50% just 1 day ago plus see that high balance a day ago too?

Thanks, hope I'm not confusing anyone.

---

From a FICO score perspective, utilization has no memory.

But in the event of a human review of a credit application, they can see everything in the reports.

---

So does this sum up what you posted? If my utilization on all 3 credit reports shows me at 45% total, then a week later it shows it as 2% and then I apply for a credit card I want - assuming no human review -will I have the same chances I had prior to the 45% credit utilization showing up? 

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computers can read too, and utilization tells a story, it's pretty obvious when somebody is carrying balances and making minimum payments compared to when somebody is paying off their bill every month in full 

if for the last 18 months you were making minimum payments, it wouldn't matter much if you were at 2% now, you'd look risky

but if for the last 18 months you've been paying your bill off in full, you'd look in great shape

so yeah, use your cards normally, pay them off in full every month, optimize your chances before you submit applications by giving yourself the highest score you can having low balances, and you'll have the highest odds to be approved for the best limits going foward 

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Maybe I should have been a little clearer, a credit card of mine(not my Synchrony Amazon secured card) did a midcycle random report to all 3 credit bureaus which is why today I noticed my Vantage 3.0 scores all went down by 30 points and my credit utilization went from 2% to like 45% total. So it shocked me that these card companies will randomly report a balance before giving me an opportunity to pay it off by the statement date.

But what you are saying is if I pay that big balance in full let's say next week and my utilization goes back down again to 2% once it is reported to the bureaus, that random reporting won't hurt me when I want to apply for another credit card right? Because I paid it off in full and it would only be on my credit reports for 2 weeks at most.

[SouthJamaica]

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@MikeyMagic wrote:

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@SouthJamaica wrote:

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@MikeyMagic wrote:

Hello all, have a question about credit reports.

Let's say on all 3 credit reports it shows a total utilization of 2%. Then a company mid cycle reports a big usage and now the utilization on all 3 reports is 50% and for the time being your credit score drops a lot.

If the balance is fully paid on the big amount and at the end of the billing cycle it's reported down to $0 so the utilization is again 2% on all 3 credit reports - would applying for a new credit card be riskier to get approved because the company could see the high balance that was on there until it was just paid off?

I know I've read that utilization has no memory but is that really true? Sure your credit score would go back up once the utilization is at 2% again from 50%, but wouldn't it be harder to get approved for a new card because the bank or card company could see the utilization was 50% just 1 day ago plus see that high balance a day ago too?

Thanks, hope I'm not confusing anyone.

---

From a FICO score perspective, utilization has no memory.

But in the event of a human review of a credit application, they can see everything in the reports.

---

So does this sum up what you posted? If my utilization on all 3 credit reports shows me at 45% total, then a week later it shows it as 2% and then I apply for a credit card I want - assuming no human review -will I have the same chances I had prior to the 45% credit utilization showing up? 

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I don't know about your "chances", I just know that your scores will move back to what they were.