The Truth about Credit Card Utilization

[Anonymous]

SJ is right, forget the simulator. You’re going to get big points either way, but you’re going to get 10 or 20 less if you go to all zero rather than leaving a small balance as we’re telling you.

[mowglidude]

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@SouthJamaica wrote:

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@Anonymous wrote:

Currently I am at 67% aggregate UT on 13 CC accts. I have about $84K in credit used and can I pay it all off next month. Then question is, should I pay it off in chunks, or down to 8%, or all of it at the same time? Will I be punished with several or all accts CLD? Obviously what is best for me, is no more interest regardless. Just a little nervous. I did go several months paying only the minimums, knowing I would be able top pay it off next month. I just recently this month started making $2-3K payments on several cards.

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Pay it all off as fast as possible.

When you're down to zero, let one card report a small balance each month, then pay it off after the statement cuts.

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Good advice SJ,

So when I pay all 13 accts down to zero at the same time, or right before the statement cuts on each individual card, only leave one with a balance? Is there a certain amount to leave as a balance, like over $300 or whatever? Then pay it off after it reports, why? to pay no interest? And after I do that, leave a balance again the following month? Maybe a different card? Lastly, I'm thinking rotating the cards, if I keep them all and charge at least something once a month per card. Maybe I just use my best 3-4 and that's it. 

[Anonymous]

Yes you pay after it reports to prevent interest. You only let one report for the balance for score.

[mowglidude]

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@Anonymous wrote:
Yes you pay after it reports to prevent interest. You only let one report for the balance for score.

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That is so bizarre how that works. Can I use a different card to report every month? Is there a minimum amount that needs to report? 

[Anonymous]

You can use any card as long as it is a MasterCard Visa American Express or Discover and not an American Express charge card. Yes you can rotate, under $20 is fine.

But again don’t stress yourself out to do all this unless you need your score to be the best for an app or reason.

The algorithm figures the more debts you have, the more risky you are, just like the more you owe, the more risky you are.

You should read the Scoring Primer linked at the top of my signature

[Anonymous]

Actually if you just pay all the cards on their due dates and then place a small charge on one before the statement cuts, you’re good and you still got the grace period so you don’t necessarily have to pay it immediately after it cuts. It really depends on how you manage your cards how far ahead you pay them.

[SouthJamaica]

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@mowglidude wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:

Currently I am at 67% aggregate UT on 13 CC accts. I have about $84K in credit used and can I pay it all off next month. Then question is, should I pay it off in chunks, or down to 8%, or all of it at the same time? Will I be punished with several or all accts CLD? Obviously what is best for me, is no more interest regardless. Just a little nervous. I did go several months paying only the minimums, knowing I would be able top pay it off next month. I just recently this month started making $2-3K payments on several cards.

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Pay it all off as fast as possible.

When you're down to zero, let one card report a small balance each month, then pay it off after the statement cuts.

---

Good advice SJ,

So when I pay all 13 accts down to zero at the same time, or right before the statement cuts on each individual card, only leave one with a balance? Is there a certain amount to leave as a balance, like over $300 or whatever? Then pay it off after it reports, why? to pay no interest? And after I do that, leave a balance again the following month? Maybe a different card? Lastly, I'm thinking rotating the cards, if I keep them all and charge at least something once a month per card. Maybe I just use my best 3-4 and that's it. 

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It can be as little as $10 or so.

[SouthJamaica]

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@mowglidude wrote:

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@SouthJamaica wrote:

---

@Anonymous wrote:

Currently I am at 67% aggregate UT on 13 CC accts. I have about $84K in credit used and can I pay it all off next month. Then question is, should I pay it off in chunks, or down to 8%, or all of it at the same time? Will I be punished with several or all accts CLD? Obviously what is best for me, is no more interest regardless. Just a little nervous. I did go several months paying only the minimums, knowing I would be able top pay it off next month. I just recently this month started making $2-3K payments on several cards.

---

Pay it all off as fast as possible.

When you're down to zero, let one card report a small balance each month, then pay it off after the statement cuts.

---

Good advice SJ,

So when I pay all 13 accts down to zero at the same time, or right before the statement cuts on each individual card, only leave one with a balance? Is there a certain amount to leave as a balance, like over $300 or whatever? Then pay it off after it reports, why? to pay no interest? And after I do that, leave a balance again the following month? Maybe a different card? Lastly, I'm thinking rotating the cards, if I keep them all and charge at least something once a month per card. Maybe I just use my best 3-4 and that's it. 

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Don't leave or carry a balance ever, if you don't have to. Just let a small balance report and then pay it off right away.

The reason: to avoid interest and to avoid ever being late.

[SouthJamaica]

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@mowglidude wrote:

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@Anonymous wrote:
Yes you pay after it reports to prevent interest. You only let one report for the balance for score.

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That is so bizarre how that works. Can I use a different card to report every month? Is there a minimum amount that needs to report? 

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Yes you can use a different card. But

(1) you shouldn't use a store card or a credit union card for the balance-reporting card, as some folks think those might get overlooked, and

(2) you shouldn't use a Chase card, because when you do pay those to zero Chase will report again mid-cycle with the zero balance (you can use a Chase card but have to make sure never to pay it down to zero)

Also bear in mind that although with most credit card lenders the reported balance is the statement balance, there are exceptions to this rule. E.g.

(1) some cards report the balance as of the 1st of the month regardless of statement date

(2) as mentioned above Chase reports zero balances whenever they occur

(3) Synchrony reports balances randomly

(4) Vantage West reports the balance as of the 5th of the month regardless of statement date

(5) PenFed PLOC's, which are treated by FICO like credit cards, do not report uniformly; mine has reported as early as the 28th of the month and as late as the 8th of the following month, regardless of statement date

[mowglidude]

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@Anonymous wrote:
Actually if you just pay all the cards on their due dates and then place a small charge on one before the statement cuts, you’re good and you still got the grace period so you don’t necessarily have to pay it immediately after it cuts. It really depends on how you manage your cards how far ahead you pay them.

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That is what I will do then..The less interest the better. I've been paying alot the last year.