CC Utilization Question

[viking64]

I'm a little confused on the relationship between credit card usage and FICO.

Does FICO care how much of the available credit you use during a biling cycle of you pay off that statement in full? Real World: I will have a $250 rental care charge on a $600 limit card. Will that cause a problem since I am over 20% utilization if I pay in full at the end of the month?

If I do this only a 3-4 times a year and keep the utilization down to $100 or so most months (still paying in full) will the rental car spike be a problem?

Thanks.

[backtoschool]

I'm a little confused on the relationship between credit card usage and FICO.

Does FICO care how much of the available credit you use during a biling cycle of you pay off that statement in full? Real World: I will have a $250 rental care charge on a $600 limit card. Will that cause a problem since I am over 20% utilization if I pay in full at the end of the month?

If I do this only a 3-4 times a year and keep the utilization down to $100 or so most months (still paying in full) will the rental car spike be a problem?

Thanks.

Your score will go down on the months that you have that charge posted to your account. The key is to pay off the charge before the credit card statement cuts, and then the high balance will not post to your credit reports. If you pay the charge after the statement cuts, you will show artificially high utilization and your score will go down. This is not a big deal though unless you have some specific reason to have a higher score at all times (like buying a house, etc....)

[IBroke]

Your score will go down on the months that you have that charge posted to your account. The key is to pay off the charge before the credit card statement cuts, and then the high balance will not post to your credit reports. If you pay the charge after the statement cuts, you will show artificially high utilization and your score will go down. This is not a big deal though unless you have some specific reason to have a higher score at all times (like buying a house, etc....)

Yes, that's VERY important. Many people don't know that the statement-balance is reported and not the balance you carry just after the payment is applied. It's all about the correct timing.

[viking64]

So, is it best to fully pay all charges before the statement is cut, or to pay down so that utilization stays under 10 - 20%?

I'm wondering if no utilization is reported, if that actually shows anything positive?

[IBroke]

So, is it best to fully pay all charges before the statement is cut, or to pay down so that utilization stays under 10 - 20%?

I'm wondering if no utilization is reported, if that actually shows anything positive?

A zero balance is not the best, either.

Check out this thread:

http://www.bkforum.com/showthread.php?t=61546