Utilization - huge hit

[Anonymous]

Greetings.

First post here. I have been reading a lot on this forum which has helped me greatly in my quest to improve. I first want to that all the contributors to this forum for all the great information and helping me raise my score over 100 pts. 

I recently got a new Chase Freedom and a AMEX BCP after only having one card for several years. I have been using both cards for purchases while renovating my house. Chase just reported I am using 44% of my CL (I will pay in full when statement is due) which made my credit score take a huge hit (I am currently at 33% total utilization). EX dropped 66 points and TU dropped 51. My question is, will this be a normal occurance each month if I run this much through or will this bounce back after I establish typical use on my card?

Thanks in advance.

[Anonymous]

Let me begin by saying welcome.

Utilization has no memory they say, as long as it stays where its at your score should level of and not change much. As soon as you report a lower utilization you should get the points back.
It's my understanding the keeping your utilization under 30% is good score wise and under 10% but more than 0% is best.

[ddemari]

wow that is a really big hit on your scores. Like the other poster said, utilization has no memory. So your scores will rebound. What are your limits on those cards?

Also, once you pay your chase card to 0, they report the balance to the CRA's as 0 too. 

[Anonymous]

6k and 1k.

So once I pay, they report a zero balance or they report next month?

Thank you both for the help!

[SouthJamaica]

---

@Anonymous wrote:
6k and 1k.

So once I pay, they report a zero balance or they report next month?

Thank you both for the help!

---

Utilization is almost invariably calculated as of the statement date. When it's reported varies, sometimes a day or two after the statement, sometimes weeks after the statement cut, but what will be reported is the balance on the last statement date.

So what ever you pay prior to the statement cut will go towards reducing your utilization and will show up in less than a month from your statement date.

[Thomas_Thumb]

---

@Anonymous wrote:

Greetings.

First post here. I have been reading a lot on this forum which has helped me greatly in my quest to improve. I first want to that all the contributors to this forum for all the great information and helping me raise my score over 100 pts. 

I recently got a new Chase Freedom and a AMEX BCP after only having one card for several years. I have been using both cards for purchases while renovating my house. Chase just reported I am using 44% of my CL (I will pay in full when statement is due) which made my credit score take a huge hit (I am currently at 33% total utilization). EX dropped 66 points and TU dropped 51. My question is, will this be a normal occurance each month if I run this much through or will this bounce back after I establish typical use on my card?

Thanks in advance.

---

No worries, impact of high utilization can be "repaired" rather quickly. I would suggest getting a couple more cards to help boost your aggregate CL which can reduce fluctuations. In the meantime, you may want to pay a majority of your charges before statements cut and then PIF remainder after statement posts.

Young Man Blues.

[NRB525]

---

@SouthJamaica wrote:

---

@Anonymous wrote:
6k and 1k.

So once I pay, they report a zero balance or they report next month?

Thank you both for the help!

---

Utilization is almost invariably calculated as of the statement date. When it's reported varies, sometimes a day or two after the statement, sometimes weeks after the statement cut, but what will be reported is the balance on the last statement date.

So what ever you pay prior to the statement cut will go towards reducing your utilization and will show up in less than a month from your statement date.

---

Usually true.

It is important to highlight, however, that if one pays a Chase card to zero, Chase will report the zero balance in a matter of days, without waiting for the next statement to cut.

[redbeard]

What everyone else is saying about utilization is true.  Not a big deal to run up and down unless you need points for something.  After all, credit cards are there to use.

The point drop seems way to much to be for a 44% utilization though.  You said you got the cards recently.  Is it possible they just started reporting as well?  I'm thinking a few things rolled up into that point drop, like an AAoA (average age of accounts) hit, new credit lines, new inquiries, the particular lunar phase, got up on the wrong side of the bed, or something else happened.

I would suggest looking at the reports themselves and confirm everything is in order as it should be.  Odds are, the new accounts dinged you a bit of the drop and it will take a while to get part of the drop back.

Dan

[Anonymous]

Thank you for the input all. 

Yes, these cards are new and it may be several things rolled into one, as you mentioned Dan. I will pay off majority of the cards early and keep plugging away.

[Anonymous]

OP, I'm guessing your file is somewhat on the thin side. There's nothing wrong with that and we have all been there. As your accts age and new ones are added you will have a more robust profile and things like, inquiries and changes in utilization will have much less of an impact.

I think I can speak for many on here by saying that you have a great opportunity to grow your credit the right way. Some of us got to where we are from learning off past mistakes. We all wish we knew then what we know now.
Best of luck in your credit journey.