Credit Card Q's

Flameblow
Flameblow

What is the ideal credit card utilization score?

I've been doing 7%, but I've also heard things like "between 5-7% is best" and "10% is ideal." I can't find much else about it on the internet. I know that you should never have more than 30%, but I'm trying to max out my credit score the most I can.

Also, do the credit bureaus get "suspicious" if you have the same exact statement amount every time? 7% of my available credit line leaves me at $87.50. If I have this same number on every statement, does it look like I'm "gaming the system?"

eGremlin
eGremlin

@Flameblow
1-10% utilization is ideal to have reported to the credit bureaus, up to 30% isn't bad, but it's not ideal

Also, do the credit bureaus get "suspicious" if you have the same exact statement amount every time? 7% of my available credit line leaves me at $87.50. If I have this same number on every statement, does it look like I'm "gaming the system?"
Not at all

MPmaster
MPmaster

@Flameblow
What the fuck. Stop being autistic and just use your credit card like a normal person.

happy_sad
happy_sad

@Flameblow
I don't worry about shit like that. I use my cards for everything I need and maximize my cashback

Crazy_Nice
Crazy_Nice

@eGremlin
Thanks.

@MPmaster
@happy_sad
Sorry if I wasn't clear. I use my credit card for everything and it gets up to like 60% utilization rate sometimes. Then, a couple days before my statement is due, I pay everything back except 7%. It's really easy to do. Just wondering if there's a better number.

girlDog
girlDog

@Crazy_Nice
a couple days before my statement is due, I pay everything back except 7%.

happy_sad
happy_sad

1% on 1 card. This is a regression from creditboards.com

Emberfire
Emberfire

Bump

VisualMaster
VisualMaster

fuc em
lol

GoogleCat
GoogleCat

Why wouldn't you just pay the whole thing?

WebTool
WebTool

@GoogleCat
That would give you a 0% utilization rate, which looks like you're not even using the card. Not as bad as a super high utilization rate, but still effects your credit score negatively.

kizzmybutt
kizzmybutt

@Crazy_Nice

Aren't you recurring interest?

Garbage Can Lid
Garbage Can Lid

So wait up a second.

I shouldn't be using g my full credit limit to improve my credit score?

This fucking credit score system is built on Micky mouse rules, I'm convinced of it

Evilember
Evilember

@Garbage Can Lid
micky mouse rules
THIS

also, guys, I have a charge on my credit for $101 from some collections agency. It's seriously fucking my credit score by about 50 points. what the fuck am I supposed to do? the charge is total shit

TurtleCat
TurtleCat

@kizzmybutt
No, I'm not.

OP here. I'm not sure if the responders so far are just trolling, or if Veeky Forums can't into credit cards.

When you have a credit card, you have two deadlines. The first one is when you're issued your statement. This is after your statement cycle ends (statement cycle is just a month or whatever where they keep track of all your transactions). On this deadline, whatever balance you have in your account gets printed onto a paper or electronic statement. This statement gets sent to the credit bureaus.

The next deadline is the deadline for paying off the balance on this statement. You should always pay this off in full. If you don't, then you get charged interest. It also ruins your credit score, because you're basically showing that you can't pay loans off on time.

Another component that factors into your credit score is called the utilization rate. This is how much of your credit line you actually use. As I mentioned in my OP, something like 7% is ideal from what I've heard, and you should never go above 30%. 0% is also bad, because then you're not using the card at all. (It translates into "If you're not gonna use the card, don't get one. Stop wasting our time.")

However, the only way credit bureaus can actually judge your utilization score is through your statement. So, you can literally spend like 100% or even more of your credit line, but as long as you pay it back before that first deadline, when your statement paper is issued, it doesn't matter for shit. If you do something crazy like that and forget to pay some back to make your utilization seem reasonable, then you'll kill your credit score.

AwesomeTucker
AwesomeTucker

@TurtleCat
So, you can literally spend like 100% or even more of your credit line

Ok you can scratch the last bit of that, admittedly I'm not sure what happens if you spend more than your credit line. Not sure if there's some extra fee or repercussion, since I've never done it. Everything else I said applies, though.

BlogWobbles
BlogWobbles

@Flameblow
i'm going for 30% on average but it doesn't matter one bit to my knowledge.

RumChicken
RumChicken

@TurtleCat
You should always pay this off in full. If you don't, then you get charged interest. It also ruins your credit score, because you're basically showing that you can't pay loans off on time.
you are somehow fundamentally mistaken about the banks interest in this game... they are dying for you not to pay everything back in time.

FastChef
FastChef

not having a massive credit line so your expenses always amount to 1%

Supergrass
Supergrass

@AwesomeTucker
If you spend more than your existing credit line AND pay it off within the month then your credit line gets raised because you've proven that you can take on more debt than your CC company thought and have the means to pay it off in a timely manner. I've done it several times.

CouchChiller
CouchChiller

Final bump just in case anyone know a shit

viagrandad
viagrandad

@CouchChiller
There's some credit site worth looking at, they have all sorts of insider spreadsheets. Can't remember it now.

It's fucking terrifying though

Methshot
Methshot

@viagrandad
It's fucking terrifying though
Why

BunnyJinx
BunnyJinx

this thread....

gotta stop coming to Veeky Forums man

lostmypassword
lostmypassword

What? All they care is the balance on statements? So as long as my balance on a statement is within the utilization range you mentioned, I'll be fine?

Methnerd
Methnerd

@lostmypassword
Balance on your statement is not ALL they care about... See @TurtleCat
. If you mean that's all they care about concerning your utilization score, then that's right.

Snarelure
Snarelure

@Methnerd
Sorry for stupid question but what you are saying is if the amount of a statement is within the range, and paying everything on time, my score should be fine? The reason I ask, is I moved from Japan to US, and I got so many conflicting advice, and frankly most people seem to not know about this system.

ZeroReborn
ZeroReborn

I wouldn't worry too much about the utilization. Just pay it off every month.

Boy_vs_Girl
Boy_vs_Girl

@Snarelure
if the amount of a statement is within the range, and paying everything on time, my score should be fine?
If by "within the range" you mean the utilization score range of 1%-30%, with ideally somewhere like 7%, then yes.

frankly most people seem to not know about this system
I'm shocked myself. I just got my first credit card in May, and I'm just some 21 year old shit in school. When I got it I didn't want to fuck up, so all I did was read a bunch of online articles for a day, plus asked some questions on Discover's live chat help service. Can't believe I know more about it than Veeky Forums, or the people I've asked about this irl. Unfortunately, live chat staff don't tell you hair-splitting advice like what the ideal utilization score might be. But I gotta know, damnit.

Sharpcharm
Sharpcharm

@TurtleCat
You can sometimes go above your credit line if you have a good relationship with the bank

They may even automatically increase your credit limit for you if this happens, but I depends on the bank and your relationship with them

GoogleCat
GoogleCat

@TurtleCat
@Boy_vs_Girl

Complete noob here, what's the result of always paying back on time and having a good utilization score?

Nojokur
Nojokur

@GoogleCat
If you pay back in full after out get the statement, you'll establish good credit

Having good credit will make things infinitely easier when your buying stuff like a new house or car someday

JunkTop
JunkTop

while this question doesn't pertain to credit cards, it does apply to credit. if you were on a joint account with someone, would they be able to wreck your credit? this isn't considering any amounts in the account, just someone taking on a lot of debt and not paying it back?

PackManBrainlure
PackManBrainlure

@Flameblow
Credit application analyst for Wells Fargo here. Your utilization matters very little unless you are planning to get an auto loan or apply for a mortgage. What most people tend to not know is how much we value the "highest balance" statistic on your accounts, which represents your ability to pay off. For example, you bought $15,000 worth of stuff on your Wells Fargo Platinum card. Ten months down the road you manage to pay that down to $1,000. Now, we see strong ability to pay off and your utilization #s mean way less outside of FICO scoring.

hairygrape
hairygrape

@JunkTop
No, I'm pretty sure they could only wreck it using the shared card.

@Sharpcharm
I can go over my credit line no problem, but there's a hefty 15$ charge for doing so (I think they charge interest in the overage immediately too).

@Nojokur
Man it just seems like such a waste of time. I want to go back to Europe where it just doesn't matter

@PackManBrainlure
But that makes no sense - they've had an outstanding debt for 10 months (paying interest) which is literally the only no go were taught about CCs.
pay it off everytime, never accrue interest.

What's the best way to improve score without paying interest?

Snarelure
Snarelure

@PackManBrainlure
I see. I've just been reading about the FICO score. Interesting to know.

Your utilization matters very little unless you are planning to get an auto loan or apply for a mortgage.
What other point is there to build up good credit though?

SniperWish
SniperWish

I'm in the market for a credit card. It would be babby's first card. Any recommendations? I fly with Delta Airlines a lot...was thinking of getting one of theirs.

Spazyfool
Spazyfool

@Flameblow
zero. Best credit card utilization is zero if you're going for high score on credit rating.

It's true, paying monthly installments no your credit card shows you can make monthly payments without defaulting.

You know what? Putting money in your savings account on a monthly basis will also boost your rating. Make sure you go for the options where you pay a fixed monthly deposit though, people checking credit ratings are retarded.
It shows you can set aside a certain mount of money that you can use to pay off debt on a monthly basis.

RavySnake
RavySnake

@Spazyfool
Neither of those things shows up on a credit report. I think you just made all that up, thinking this credit game was rational

PurpleCharger
PurpleCharger

@RavySnake
I'll be more specific on this then.
ISAs.
An example would be save to buy ISA.
A savings account where you can only deposit using direct debit and if you use your savings on buying a house, you get 25% on top of what you saved up.
The point of this savings account is both to get a person to save up some money, and show they can contribute a steady monthly amount.

And yes, paying your credit card on time rather than letting your debt accumulate is a good way of showing you're credit worthy as well. Paying the minimum monthly fees is not the best idea, but at least it's better than just letting the debt accumulate.

Then again, it really depends on who you're borrowing the money from

TurtleCat
TurtleCat

@PurpleCharger
Yeah man you're mixing up two different things. You're talking about building up a history with an individual bank and a personal rapport with a manager.

Again, savings / ISA / Who you're borrowing from doesn't affect your credit rating. Seriously, go download your credit report and it WILL ONLY SHOW YOUR CREDIT. savings should be considered debit as nobody is lending.

As for your other advice, you're right, paying the minimum monthly fee is not the best idea - in fact it should be avoided entirely.

If you get yourself into a situation where that's all you can pay, you're a fucking idiot

Emberfire
Emberfire

@SniperWish
bump

lostmypassword
lostmypassword

@SniperWish
@Emberfire
Pls respond.

Ignoramus
Ignoramus

@lostmypassword
I think all the advice you need is already here. Check LiShengs copy pasta, his dropcanvas link has a complicated but fun credit score spreadsheet to play with.

Basically use credit but don't overuse it.

Never get in a position where you're paying interest or fees. Utilisation rate may or may not be relevant.

DO EVERYTHING YOU CAN TO AVOID PAYING CREDIT CARD COMPANIES

w8t4u
w8t4u

@Evilember
Dispute it. I've had a few small charges like these removed from my credit report just by disputing something about the claim. Third parties often buy such debts for pennies on the dollar and have zero evidence to back up anything that put on your credit report, so they fold the moment you dispute the claim.

LuckyDusty
LuckyDusty

Not sure if this is relevant to the thread but I'm in a foreign country and I'm not sure if my bank made the relevant changes in order for me to be able to use my card there so I was wondering: Could I send money to myself via Western Union in order to withdraw cash without using an ATM ?

Raving_Cute
Raving_Cute

@LuckyDusty
Nice try Scammy McScammerson

AwesomeTucker
AwesomeTucker

@Raving_Cute
But.. that was a serious question though. Turns out my parents can Western Union it to me so I won't have to wonder about this but I was wondering if it's technically possible to send money to yourself (I mean it could come handy if I ever find myself in this situation again)

askme
askme

@AwesomeTucker
I'm sure western union would be in a better position to answer your questions bro. Also there's a phone number on your credit card for asking about if it's activated abroad. Also there's trying it anyway

hairygrape
hairygrape

@eGremlin
30% is where you either stagnate or get dinged but 1-10% is fine, i typically keep 1-5%
@Flameblow
credit bureaus don't look at and calculate your score manually it's automated using formula made by fico.

Stark_Naked
Stark_Naked

@lostmypassword
Very first credit card ever? Go with Capital One Journey.

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