Thread: Charging more than 30% of available credit

Last month I just complete one year with a secured credit card. I have since been upgraded to a regular (non-secure) card. My credit score has increased extremely well (according to my local banker and issuer of the secure card which is now a regular card). I lived by the 1/3 rule of not charging more than that amout of the total available credit. I also paid in full every month.

I would like to make an important purchase that would cost 28 dollars more than 1/3 of my total available credit but less than 40% of my available credit. I plan to pay in full when the bill is due. Will this hurt my newly found "good" credit score?

P.S. I had the secure card not due to bad credit but because I did not have enough recent credit on record.

It might hurt your credit for 1 month but then will help it slightly. I would not worry about it. Just but the major item then pay the card off when the bill comes.

It is kind of difficult to stay under 30% of your credit limit these days. My limits were slashed massively in the recession and have not been risen since. Either we need to start getting decent limits again or Fico needs to change their system to account for times like these.

You actually want to stay at 9% or below. That is the only 100$ guaranteed way that credit usage won't affect your Fico.

Is there a way to know when they report? Perhaps paying part of the balance, before they report, will effectively create a reporting under the desired threshold.

Report date: 25th
Limit: $1,000
Charge: $500 on the 8th
Payment: $201 on the 20th
Balance carried over: $299. 29.9% of limit

Originally Posted by danpass

Is there a way to know when they report? Perhaps paying part of the balance, before they report, will effectively create a reporting under the desired threshold.

Generally it is the statement's closing balance that is reported (the total amount due on your bill). You can certainly make partial payment(s) before the closing date if you want to bring down the percentage. Given your $1,000 limit what you're doing by paying part of it off ahead of time is a smart approach, otherwise your CUR would be high.

If your credit utilization goes above 30% once in a great while I doubt it will hurt you. My father would occasionally use up over half his credit line and I've never known him to have problems getting approved for credit or loans of any kind.

I've been using CCs for 15yrs and I have used up to 90% of my available credit at times. As long as you are never late, pay more than the minimum, you will be ok. Banks would LOVE imho for you to carry a balance on rewards CC. That's how they make their $$$, as long as you are never late of course. But if you continue to pay the minimum over the course of months, or yrs and keep trying to obtain new CCs, there's going to be alot of red flags on your credit from the banks you are currently doing business with. In the end, only use what you can pay back and the higher the UTIL %, the lower your score will be.

Your credit score is harmed if you use more that 30% of your available credit AND it is reported to the bureaus. As long as you pay balances down to 30% or less before your issuer reports to the bureaus, you will be fine. If you want to use an amoun thihger than 30% in between statements, you should go for it.