Just another thread of questions.

For just about anything you want to get off your chest about credit cards.
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paparoach429
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Just another thread of questions.

Postby paparoach429 » Sun Oct 07, 2012 11:31 pm

1.) If my Citi cc bill is due on the 9th and I pay "x" amount today, when will it show on my Credit Karma acount that my utilization has dropped?
2.) On my Express store card if my bill is due on the 20th and I pay my bill in full the 19th, will it be reported to the credit bureaus as a positive thing, or would it only show if I payed the minimum and let it remaining balance roll past the 20th?
3.) Why a few days ago Credit Karma was showing on their "credit card" tab that i had "good" chances of getting approved for the chase freedom mastercard but "poor" chances of the visa and now they are both showing I have "good" chances.. Wouldnt I always have the same chance of getting approved for both?


kcarter609
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Postby kcarter609 » Mon Oct 08, 2012 7:16 am

1) You have to pay before the statement closes. Usually the statement closing balance is what gets reported to the credit bureaus.
2) See #1, same answer.
3) Yes. Same thing. That system that rates what card you can get approved for is totally messed up. I think they do it based on who pays the better commission to them. It says I have an Excellent chance to get a Chase Sapphire Preferred, but it says I have a poor chance to get a Chase Freedom, yet I already got the Chase Freedom instantly.

Active Cards:
Chase Freedom 10+10 Visa Signature ($9k Limit - 8/2012)
Chase Sapphire Preferred ($10k Limit - 2/2013)
Chase Ink Plus ($7k Limit - 2/2013)
Discover IT ($9.5k Limit - 10/2012)
AMEX Zync (No Pre-set Limit - 1/2010)
AMEX Blue Cash Everyday ($20k Limit - 1/2013 - Backdate to 1/2010)

Daniel
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Postby Daniel » Mon Oct 08, 2012 12:45 pm

paparoach429 wrote:1.) If my Citi cc bill is due on the 9th and I pay "x" amount today, when will it show on my Credit Karma acount that my utilization has dropped?
2.) On my Express store card if my bill is due on the 20th and I pay my bill in full the 19th, will it be reported to the credit bureaus as a positive thing, or would it only show if I payed the minimum and let it remaining balance roll past the 20th?
3.) Why a few days ago Credit Karma was showing on their "credit card" tab that i had "good" chances of getting approved for the chase freedom mastercard but "poor" chances of the visa and now they are both showing I have "good" chances.. Wouldnt I always have the same chance of getting approved for both?


1.) kcarter is correct to the best of my knowledge. The statement balance is usually what gets reported, which is why it is odd to have many score changes in a month.

2.) On your next statement balance, most likely issued around the 25th-30th, it should show a lower credit utilization rate than would have been shown if you only paid the minimum payment. Typically your goal for your revolving lines as a whole should be 5-30%, and while keeping individual lines in the 1-50% range. kcarter also pointed out that it should be reflected on your statement balance.

3.) I tried to replicate the error, but it appears that it no longer looks this way. I am assuming you were looking on the my savings > overview page. Mine both show the same chance of approval. Based on other forums I have visited, it looks like higher volume cards have more accurate approval probabilities, and it doesn't sound like the algorithm takes into account any high or low override characteristics(like having a discover more card or chase bank accounts).

paparoach429
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Postby paparoach429 » Mon Oct 08, 2012 3:15 pm

So if I pay my balance in full before the statement closes it will obviously report a 0 balance but will it show that I've used the card as far as the credit bureaus are concerned?

Daniel
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Postby Daniel » Mon Oct 08, 2012 4:27 pm

So, If in Month 0, you have charged 100 units of your limit of 1000. On your end of month 0 statement it will show the bureaus that it is a new account, and you have a 10% credit utilization on this card (remember that they look at aggregate figures as well). Upon Paying your minimum payment of 15 on your due date, which is due during calendar month 1, nothing new is reported yet to your bureau. On your End of Month 1 statement, you have 85 units of pre existing charges, 2 units in interest, and another 100 units of new charges. Your new card utilization is 18.7% as viewed by the bureau. Upon paying your balance in full on your Month 1 statement due date, which is during month 2, your new balance is 0 and nothing new is reported to the bureau. On your Month 2 statement only the new 100 units of new charges which is viewed as a 10% credit utilization. In short, what the bureaus see, is the same set of numbers you see on your end of month statement. If it shows you have 1900/2000 charged, you have a 95% utilization and that is all they see. When you have 400/2000 next month, they don't know if you spent 400 new after paying off in full or if you paid 1500 and change and the 400 is the result of interest charges.

So, in theory, if you were to pay off your balance before the due date, it will show 0% credit utilization, which, if all cards have 0%, is scored poorly by most scoring algorithms. In addition to this, you will have given up the 20 day grace period which in the absence of rewards, is one of few reasons to use a card.

paparoach429
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Postby paparoach429 » Mon Oct 08, 2012 9:27 pm

So to sum it up, carry a small balance? lol

Daniel
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Postby Daniel » Tue Oct 09, 2012 11:17 am

To sum it up, You don't have to carry a balance to have good utilization ratios as long as you spend each month.In theory it is most advantageous to pay off one's balance in full every month, and to make sure your spending on the card is between 5 and 30%. It works best this way because you pay no interest, and you get rewards that are offered. If you need to carry a balance, get a personal loan from your banker or a social lending site to keep your borrowing costs low. It just doesn't make sense to pay more than is necessary in borrowing costs.

Something that is important to remember is that the bureaus don't sell your score history, so if you aren't planning on applying for a job, or insurance, or a loan, your credit utilization can fluctuate from month to month. Just remember that 2-3 months before you apply for a loan, to start getting the sum of all cards into the 5-30% range. Of course, make sure that the rest of your score variables are in order as well.



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