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is there such a thing as only using 30% of credit card limit
Posted on 10/19/18 at 2:09 pm
Posted on 10/19/18 at 2:09 pm
So I went and got me a Credit Card from Capital One today. I was doing some research and found some places online that recommend only using 30% of your total limit each month is the best way to get the most jump on your creidt score, instead of just swiping and go. Is there any truth to this? I am just trying to build my credit higher so any other tips would help thank you.
Posted on 10/19/18 at 2:19 pm to welder69
I use 0%. I pay in full every month. They don't care how much you swipe, they care how much you're rolling over.
For maximum benefit to your credit score, definitely keep it under 50% and ideally about 20, 25 percent.
For maximum benefit to your credit score, definitely keep it under 50% and ideally about 20, 25 percent.
Posted on 10/19/18 at 2:27 pm to welder69
quote:keep it lower than 20% for sure. That doesn't mean only use 20% of the money, you can use as much as you can but you need to keep these two dates in mind
I am just trying to build my credit higher so any other tips would help thank you.
1- statement date. On this day, a snapshot of your account is taken. What ever is on your account at this time is what's reported. You want to keep this low.
2- Due date. It's the date the amount reported above is due. And there's quite some time, a few weeks most of the time, between the two dates. You want to make sure you pay everything off before this date so that you don't incur interest.
What most do is they use the first date as their date to make a payment and never have to worry about it. Or you can pay most of it before statement date so that when they report your account it shows some usage. Maximizing credit scores theories are all over the place, but one thing is certain...if you pay it off every month you'll be just fine in the long run.
Posted on 10/19/18 at 2:34 pm to castorinho
quote:
castorinho
What he said. You get a good hit to your credit score if your credit utilization rate is less than 30%, but generally you want to be over 12%. In the 15-25% range you are golden.
That doesn't mean you can't go over 30%, it just means make sure you've paid the balance down to below 30% before your statement date. Then pay the remainder off each month. Treat it like a debit card and you'll increase your credit score.
This post was edited on 10/19/18 at 2:44 pm
Posted on 10/19/18 at 2:39 pm to welder69
Get a higher limit or spend less each month.
Even if you pay it off in full, you are still utilizing the credit...so if you have $1000 on the card that you payoff each month but $2000 limit, your utilization is 50%.
It's a simple numerator/denominator equation. I regularly try to raise the denominator on my cards to keep my utilization in the ~5% range.
Even if you pay it off in full, you are still utilizing the credit...so if you have $1000 on the card that you payoff each month but $2000 limit, your utilization is 50%.
It's a simple numerator/denominator equation. I regularly try to raise the denominator on my cards to keep my utilization in the ~5% range.
Posted on 10/19/18 at 2:44 pm to castorinho
thank yall for the help it clears things up a lot and makes sense
Posted on 10/19/18 at 3:05 pm to lynxcat
quote:not necessarily. That's why understanding the difference between statement date and due date is key.
Even if you pay it off in full, you are still utilizing the credit...so if you have $1000 on the card that you payoff each month but $2000 limit, your utilization is 50%.
Posted on 10/19/18 at 3:57 pm to castorinho
quote:
That's why understanding the difference between statement date and due date is key.
yep. listen to everything castro said, welder. i keep my utilization around 12-15% each month, but pay off in full. statement close date is key. that is when the snapshot is taken, and thats the date when you want your balance to be at your desired %.
Posted on 10/19/18 at 4:51 pm to Carson123987
ok, so the snapshot how do I find out when that is taken? a lot of great advice THANK YALL
Posted on 10/19/18 at 7:00 pm to welder69
When you get your first statement it will tell you the closing date. “For the period ending Nov 3rd” or something similar
Posted on 10/19/18 at 9:42 pm to Carson123987
So never letting my credit card balance be over a few $$$ hundred is bad?
Posted on 10/20/18 at 5:42 am to GoCrazyAuburn
quote:
generally you want to be over 12%. In the 15-25% range you are golden.
Y'all telling me I need to up my spending?
Posted on 10/20/18 at 7:25 am to LSU6262
quote:
Y'all telling me I need to up my spending?
No. I think this is a misunderstanding of the credit score calculation. 0% isn't rated "worse" than 10 to 30 % utilization. You do kind of need to generate activity, both swipes and payment, but there is no "minimum" to get credit for that, IMHO.
Posted on 10/20/18 at 7:30 am to Ace Midnight
Oh gotcha. Yeah I just reconcile mine every few days. It helps me keep my spending in check and budget much more easily.
Posted on 10/20/18 at 7:33 am to LSU6262
And don’t forget that credit bureaus look at available credit. This means you may have zero credit card debt. However, if you have high dollar credit cards that you could suddenly max out and put your debt to income ratio out of wack that is also factors in. I just don’t know to what degree.
Posted on 10/20/18 at 7:47 am to GoCrazyAuburn
quote:
You get a good hit to your credit score if your credit utilization rate is less than 30%, but generally you want to be over 12%. In the 15-25% range you are golden.
Mine is at Zero % and my score is 830
Posted on 10/20/18 at 9:37 am to SG_Geaux
I think this “want to be over 12% but less than 30%” commentary doesn’t make sense. No one gets penalized for having a high available amount of credit and only using a small piece of it. Credit utilization of 2% with $100,000 available credit is not a negative rather a positive.
Posted on 10/21/18 at 8:21 pm to TheWiz
quote:
So never letting my credit card balance be over a few $$$ hundred is bad?
you can max the mfr out if you want, just make sure you make a payment to get it back down for the statement close date so that the snapshot captures it at your desired percentage.
u a combo welder baw?
Posted on 10/24/18 at 3:43 pm to Carson123987
quote:
u a combo welder baw?
Wait, wat?
Posted on 10/24/18 at 8:35 pm to welder69
All the fixation the credit reporting industry has created on their product is ridiculous.
Quit fixating on your credit score. Pay your bills on time and you will have a good credit score if and when you ever need it.
Quit fixating on your credit score. Pay your bills on time and you will have a good credit score if and when you ever need it.
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