Question regarding how utilization is calculated

[Epic]

Is utilization calculated upon the closing statement date, or at any given time during the statements month.

For example, say on a $2000 credit line, I charge $1000 during the course of a month (thus 50%). But pay $800 prior to the monthly statement closing, leaving $200 (thus 10%).

What is my utilization, 50% or the 10% at statement closing?


Also, I assume the 'high balance' reporting to the CRA's would be $1000. Does this negatvilty impact a credit score?

[Floridagail]

I have followed my credit report. It is figured when your balance hits the credit bureau. Most cases it is a few days after your new statement prints each month. I have found if i do not use the card and it has zero balance, it does not report. But it still gets figured into my utilization. If you are more than 20% it will lower your score by alot.

[Epic]

That is what I thought, when the statement closes. My concern is that when I pull my CR's, it shows the cards 'high balance.'

[Amy26]

You need to figure out when your creditors do their monthly reporting. What balance hits your credit report monthly will depend on what and when your creditors actually report to the bureau. For example, my US Bank credit card cuts statements on the 31st of every month... so whatever my balance was on the last day of the month is what will show up on my credit report the next time they report. But each creditor is different and generally will report whatever your last statement balance was.

Any balance over 30% of the maximum limit on the credit card will hurt your credit score. The rule of thumb is to keep the balance below 10% of the total limit for optimal score impact. The other factor is your overall utilization. So, you will get graded on your total revolving account utilization and each card compared to its limit.

[IBroke]

Also, I assume the 'high balance' reporting to the CRA's would be $1000. Does this negatvilty impact a credit score?

"High Balance" is usually the highest balance ever reported on that particular card - So in your example it would be $200.

However, I wouldn't be too concerned about it because this balance is usually not used to generate your score. I say "usually" because there are some creditors who don't report your actual credit-line and report the "High Balance" instead and therefore, that amount is used to calculate your utilization. IMO, that is very inaccurate but it does happen. If that is the case, I'd actually recommend having a high balance reported once to get the most favorable and accurate credit-utilization reported once your reported balance is below 10% again.

If seen that happen on some of my accounts and strangely enough, it sometimes even depends on the credit-bureaus. One uses the credit-limit and the other one the high balance - although it's the identical account.

[catlfuzzy]

I have followed my credit report. It is figured when your balance hits the credit bureau. Most cases it is a few days after your new statement prints each month. I have found if i do not use the card and it has zero balance, it does not report. But it still gets figured into my utilization. If you are more than 20% it will lower your score by alot.

Is that 20percent FROM the limit or 20percent OF the limit?

[justbroke]

Is that 20percent FROM the limit or 20percent OF the limit?

It is really about 30% of the limit before it starts to take chunks out of your credit score. High FICO scorers typically use less than 10% of their credit limit (averaging around 7% according to Fair Isaac) but even 10% can impact a high FICO score. When you get to 50%, 60%, 70%, 80% you hit other triggers which further bring down your score. At 90% to 100%, that's almost the worse and you could see a 40 point drop in your score. Over limit has its own consequences as well.

There are two things the score looks at. The utilization on an individual card and the overall utilization. It is not good to have one card at 90% and the other with $20K available credit and 0% utilization. You will still lose points.