Credit card - how is utilization reported?

Drez

I'm trying to repair but also understand how credit ratings work, so I have two main questions about utilization:

1) Is utilization your current debt/total credit, or is it card by card? So let's say you have 4 cards with a $2500 limit each (I have nowhere near this - it's just an example). That's $10,000 total. Let's say you have like a $50 balance on 3 of the cards and $2400 on 1 of the cards. Total utilization is about 25%. But on a card by card basis, that 4th card is 96% utilized. Does this affect your FICO differently than if I had, say, a $650 balance on each of the 4 cards?

2) How is it reported? Snapshot at some point in the month, or do they report your highest utilization within a month? Let's say you have a card with a $1000 limit (or $1000 total credit depending on your answer to the above question). Let's say you charge $900 for a plane ticket and hotel reservation. The amounts clear within a couple of days and you immediately pay it off in full. How does your CC company report your utilization?

Dunadan019

1) this should not matter except for the fact that 25% is a little more than you should have. in general, your credit card utilization should be between 1 and 20%. right now I have a credit card that is nearly 50% utilized and my score did not drop because of it.

2) each credit card will report once a month on a different day to the various credit agencies what your balance is.

some of them it is the beginning of the month, some of them it is the end of the month. you should call each card and ask them what date they report your balance on.

Feral

Drez wrote: »

1) Is utilization your current debt/total credit, or is it card by card?

Both. Keep in mind that the exact formula FICO uses to determine your credit score is secret. But both your total utilization and your utilization on specific accounts matter. In your example:

Drez wrote: »

So let's say you have 4 cards with a $2500 limit each (I have nowhere near this - it's just an example). That's $10,000 total. Let's say you have like a $50 balance on 3 of the cards and $2400 on 1 of the cards. Total utilization is about 25%. But on a card by card basis, that 4th card is 96% utilized. Does this affect your FICO differently than if I had, say, a $650 balance on each of the 4 cards?

Having a single card with high utilization does reduce your FICO score, even if your overall (aggregate) utilization remains the same.

Aggregate utilization is more important, however.

Drez wrote: »

2) How is it reported? Snapshot at some point in the month, or do they report your highest utilization within a month? Let's say you have a card with a $1000 limit (or $1000 total credit depending on your answer to the above question). Let's say you charge $900 for a plane ticket and hotel reservation. The amounts clear within a couple of days and you immediately pay it off in full. How does your CC company report your utilization?

It's typically reported on the statement date - the same day your interest is applied and your statement balance is generated.

This can differ from one card to another. There are some banks that report all their accounts on the same day, regardless of when the individual cardholder's statement date is.

Also keep in mind that there's always a lag time between the bank reporting your balance and the credit bureaus processing it.

a5ehren

Yeah. I bumped my FICO score by 20+ points just getting my credit card limit increased. One of the sillier parts of the system, but easy to game once you know how to play it.

Drez

Thanks, people.