Utilization vs. Paying in Full

[Anonymous]

What is everyone's philosophy regarding paying in full? I know some people like to leave anywhere from 3%-5% utilization showing on their reports while others prefer to pay in full before the statement closes so that the credit reports. I am one for paying in full and not letting and balance report, but I'm not sure if this is a good strategy as it may look like I am not using my cards at all.

Currently, I have a CSR @ 11k , Freedom @ $4.5k , and Citi DC @ 4.5k . Currently, CreditKarma reports my TU (709) and my EQ (703). They were up around the 720's but took a little hit due to the recent applications for the Chase cards (<1 month ago).

Let me know what you guys and gals think! I'm interested in building my score a bit going into the new year to apply for the CFU and then gardening with my Chase Trifecta for a while! Does the whole thing boil down to what the credit reports view as positive as opposed to how the banks view spending? I'm pretty new to the whole credit game, but I can't wait for my 100k UR to post! I definitely have been enjoying all of the perks that using a credit card has to offer. Thanks!

[FireMedic1]

Let 1 of the 3 report 1-5%, the rest PIF for best FICO effect.

[dragontears]

Personally since I am not planning on applying for anything in the near future I don't bother with paying before the statement and just let my normal usage report. For my profile the difference in score is 3-6 points (depending on the CRA) between letting it all report and only having 1 card report. Whenever I am ready to apply for something I know I can get those few points.

[Anonymous]

I prefer to pay my cards in full each month.   I usually have at least one card on some sort of % interest promo (lowes, walmart, etc.)

My reasoning for pif is different than most people I'm sure.   Scores are important to me, but being debt free is more important.

I went through the credit crunch of 2009 and 2010 and ending up with several chargeoffs and refuse to let  myself end up there again.   So I use my cards for the rewards and pay them off each month.  

[dragontears]

I should be clear I do PIF every month, just after the statement cuts not before

[nachoslibres]

My Citi Double Cash is my main card used (I pretty much use all my other cards only for bonused spending) so it is the one I like to leave a slight balance on.  Since my DC has a CL of $9k I always try to allow the statement to cut at $900 (10%) - so I make a pretty big payment on the statement closing date and then pay that remaining balance a couple of days later.  The other cards I pay in full before the statement cuts so that they report $0 balances and this has seemed to work best for my credit scores.

[Kevin86475391]

My strategy is simply to PIF, continue using my cards normally, and never worry about what utilization reports. Since I do PIF, have solid credit limits, and spread my spending across many cards, this pretty much ensures that a low, non-zero overall utilization reports. It's not as optimal as having all cards but one report a $0 balance and having that one report a few percent utilization, but it's certainly good enough for me. My FICO 8s are over 800 as is, so usually good enough to get approved at the best rates. Although, I suppose I would try to meticulously optimize if I knew I was going to be applying for something.

[Anonymous]

I let 3% utilization balance report because in August my Fico dropped 20 points when a zero revolving balancd was reported. The next month I left a small 3% balance and my Fico went back up 20 points.

[Anonymous]

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@Anonymous wrote:

What is everyone's philosophy regarding paying in full? I know some people like to leave anywhere from 3%-5% utilization showing on their reports while others prefer to pay in full before the statement closes so that the credit reports. I am one for paying in full and not letting and balance report, but I'm not sure if this is a good strategy as it may look like I am not using my cards at all.

@Currently, I have a CSR @ 11k , Freedom @ $4.5k , and Citi DC @ 4.5k . Currently, CreditKarma reports my TU (709) and my EQ (703). They were up around the 720's but took a little hit due to the recent applications for the Chase cards (<1 month ago).

Let me know what you guys and gals think! I'm interested in building my score a bit going into the new year to apply for the CFU and then gardening with my Chase Trifecta for a while! Does the whole thing boil down to what the credit reports view as positive as opposed to how the banks view spending? I'm pretty new to the whole credit game, but I can't wait for my 100k UR to post! I definitely have been enjoying all of the perks that using a credit card has to offer. Thanks!

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You mention it may not look like you're using your cards at all. To me...theres no real correlation to that, so don't worry. Internally and the card company itself knows you are using the card, it's just that the low utlization being reported has a low utlization percentage but that doesn't mean you werent using your card. You could of been up to your card limit but just paid it down before the statment, it's a good thing for your score anyway to have low utlization report. So i'm not sure if you mean if creditors look at your report see low UTI and assume youre not using cards? Or do you mean the credit card company itself? Cause the card you use and the company definitely know interally you use the card obviously no matter the low utilization being reported. 

[Aahz]

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@Anonymous wrote:

I am one for paying in full and not letting and balance report, but I'm not sure if this is a good strategy as it may look like I am not using my cards at all.

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This seems to be your main concern, so allow me to put to rest any of your worries.

If you use your cards, the banks see this regardless of whether you PIF before or after the statement cuts.  There are sections of each tradeline on your credit report that show both high balance on the card as well as how much you paid the previous month.  So, even when you PIF before the statement cuts, if you used the ard, that still shows up on your reports.