What Credit Utilization Rate is Best for Your Credit Score?
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- čas přidán 12. 02. 2021
- What #Credit #Utilization Rate is Best for Your Credit Score? Debt Free In 30 | A Personal Finance Podcast | Ep 337. One of the simplest ways to increase your credit score is to lower your credit utilization. But how do you do this successfully? On today’s podcast, Certified Credit Counsellor Diane Cunha is back to share practical advice for how to maintain a good utilization rate for healthy credit. Diane also discusses common credit utilization misconceptions and the risks of having too much available credit. Tune in to the show!
Helpful Links:
What is Credit Utilization: • Credit Utilization | D...
Rules to Master Your Credit with Richard Moxley: • Rules to Master Your C...
Fix Bad Credit Yourself - Tips & Tricks: • Fix Bad Credit Yoursel...
Straight Talk on Your Money Book: www.amazon.ca/Straight-Talk-Y...
#CreditUtilizationRate #DebtFreeIn30 #DebtFree #CreditScore #CreditReport #CreditHistory
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"we never know when they report"...It's called the open/close date and it's available via an online statement.
You’re right !
Or you could just call your credit card company & ask them when does the bill cycle ends because that’s usually the date they report to the credit B so pay it 5-7days before the cycle ends. Don’t ever go over 30% if you don’t trust yourself making it before the cycle ends & you’ll be fine if you can keep your CC under 9% is best & at 1-3% even better ! Don’t ever go over 30% & you’ll be fine.
Yes, usually, not always, that is the point! ;) Thanks for watching.
They report to the bureaus on the statement close date. How does she not know this as a credit specialist???
Because they, in some cases, aren't reported on the date they say they are going to be. As specialists in the industry, it has been seen more than a few times. Hope this helps. Thanks for watching!
Certain time of the year it's unrealistic to have low utilization at all times. But very realistic to pay balance asap and very realistic to keep utilization low most of the mouth is also realistic. Example if my utilization is 90% on 3rd but on 25th on the statement it's reported at 3% utilization. What happened on 3rd shouldn't matter. Because what if on 3rd bought whole family groceries 2 hours pay that back. How am i high risk to lend to when something gets payed back so quickly. High risk person does high limit and then doesn't pay it back after all those groceries. Keeping utilization low most of the month makes sense. Always having it low is annoying. Your thoughts?@@DebtFreein30
Thank-you for a well explained podcast regarding credit utilization and revolving credit. Well said!
I love all the information from these videos!! Thank you so much!!
I thank you Donna
went through a consumer proposal and complete it in January 2021.I finally pay off my credit card Japan's from 3500 to $75 now my score is 679.
I had a 0% utilization this month and my score went up 60 points. But across the board utilization
I like how you kept the video under 30
Love this podcast
In AU were have up to 55 days interest-free on purchases and somewhere around 21 days to pay Monthly Closing Balances.
Very good podcast
First you have to cure the problem that is resulting in a low credit score. If it’s lack of control, then by all means don’t seek more credit. If it is low limits, and not lack of control, then getting new credit or higher limits is not a problem.
What no one ever seems to explain is that your credit utilization includes every single line of credit that you have. It does not have to be on the specific card. If you have eight lines of available credit that add up to $110,000 available credit then you can have a $20,000 credit card that you have $19,000 on that card. It is 30% of your entire credit utilization available. And it certainly does not have to be paid off by the end of the month. It could be a credit card that has a year interest, free or even with interest. As long as you are paying on that card on time, it does not have to be paid off monthly in this case scenario that Balance could be on there for a year or more as long as you’re making your payments.
As a person who is watching your video for the 1st time always introduce your guest even though they may be a repeat guest.
Introduction @ 00:54
@@DebtFreein30 I remember Diane's name being mentioned but I don't recall hearing how to contact her if a person wants to use her services.
@@Retired-jr3qs Hi Retired 2019, Diane is a member of the Hoyes Michalos team, aka Debt Free In 30, and can be contacted through the website, hoyes.com
Thanks for watching and leaving a comment. Best wishes.
1) Is there any particular date when the banks report the owed balance on our statement to the credit bureau?
2) Suppose we use 100% of credit on any given day (not the statement close day) and then payback 90% of the 100% credit the next day. Then will our credit utilization be 10% on the statement close date and the same reported to credit bureau? In that case, we can take advantage of discount offers on credit card and also keep credit utilization under 10%?
Donna I was hoping to hear more on what is the real use of credit ? and how does it benefit your financial life ? The fact of the matter is that Credit is a behavioral process, nothing we do by offering recommendation of being debt free, at the end the most important factor, is to see how much you benefited/ how can you benefit from the banking system. Furthermore, if you realistically took advantage of America's Credit system during your life span. Measure analytically with your clients their assets and liabilities and pursue good debt for their own benefit using a holistic behavioral approach. NOT as victims of the system, by doing so you will have more clientele and less EX-clients.
zero is okay? Many articles says ZERO UTILIZATION may not be the best
2 to 4%. Zero occasionally reports as fully paid, so I do that too
Played with i all. I had my credit go up over 20pts before with 20%+ the first time i learned how to pay my cc's down 4 yeara ago i put a couple at 1% my scores went up 60pts in two days. 40pts oneday and 20pts two days later. And since then i been knowing how to put it at a certain %... I played with different % i put them under 10% i had time my cards would report over 20% and my scores went it.. I actully put them at 0% and it went up and sometimes it never went up
I have a question I have a total of 7 credit cards Bank of America and Citi Cards are my last two credit cards that I opened the Bank of America has no reward and the Citi card Diamond card has no rewards as well I open them up to pay off debt when I am done paying them off should I close them out because they are not my oldest credit card
If you close those cards, your utilization will be affected as you will be lowering you available credit. 1) See if those banks will allow you to upgrade to a different card that have cash back or points rewards, if points, make sure they are at least 1% equivalence per point. Don't pay yearly fees either. 2) If you are planning to cancel anything, make sure you get another card with equal or better credit line in its place before you cancel, to maintain available credit line, but avoid cancelling credit cards, just use those occasionally, use the rewards ones more often!
Yes we do know when the creditors reports.
I thought so. They're making it sound as if the creditors report all willy nilly. If so, then what is the point of a statement date and closing date?
@@tblub.9270 correct 🎩
@@tblub.9270 you can actually request off cycle reporting if it in your advantage
if you use 10% of your credit limit and pay it off right away, do you recommend not using your card again till the next billing cycle? so use the card just once in a billing period?
I'm curious of this also
@@Pinecones199 I have learned a few things since my post. dont pay it off right away, if you do the agencies may not see that you used your card if it was paid right off. I am now using 20-30% utilization on 2 cards and paying them off 2-3 days before due date. My score continues to rise each month and now im at 715 with Experian doing this on a month to month basis. I am only using my cards to raise my credit score. I use a debit card for all bills and other purchases.
@@Pinecones199 if you use 50% of your utilization, then pay off 35% right away, like next day, so when the agencies come by they see your utilization at under 30%, not the 50% that you used. if they see 50% that will work against you. I recommend only using Credit Cards to raise your score and use a Debit card for everything else. if you cant afford it, dont buy it. I had credit card problems after 9-11-2001. never used cards after that. a year ago I had no credit and nothing negative on my credit at all. I immediately got a 688 score and 10 months later im at 715 with no debt. it takes a lot of work and discipline but anyone can do it. take a piece of paper and write down how much you can use on each card below 30% and the due date. go to the gas station, use that amount for gas and maybe some food. then put the card away for the month. then make a payment in full 2-3 days before the due date. you will see you score go up. one month my score went up 22 points on all 3 agencies.
My understanding is you can use it more than once monthly. Just pay the balances down before then statement end date that reports basically whatever you owe by statement pay that with your check then the next day you can use it again cause the next day is the next months statement due date
Up to you to test it out. Generaly, you're good as long as you're under your 10% utilization
Great work Doug! Scooby snacks for you.
"Don't use credit for 'Emergencies'!"
Can I find the date that my credit card sends information to the Credit Bureau?
My allegiance is to Liberty, the Republic, and Democracy.
How do I call Diane?
Works on Experian boost
Phone's bills and streaming cable bill
$500 mortgage 🤣
If I have a credit limit of $1500, what should my utilization be each month?
30% is the Rule but to show the Bank you know how to spend THEIR money stay at that 25% of the $1500.
@@katbax55 What would you recommend as the lowest percentage to use because i know zero is not good!!! Thank you!!!
@@daniellekps8776 Asked & Answered
20$
Telling someone to lower their credit limit from 10K down to 3,000 is stupid! Having the bigger limit of $10,000 you could use 2,000 and not lower your scores. However, only having a $3,000 card using 2,000 means you're using 66% and you don't know when the card issuer takes a snapshot.
Negative irresponsible consumers use Credit for emergencies. In my case. That’s never. Its not my money and save your own money its the money you never use irresponsible and it’s simple. You’re money is your money and the bank is the bank. Its the relationship with the bank when you venture to a investment you will be in a better place with that bank. To finalize if you can’t afford it don’t charge it.
miss piggy
THIS IS SO WRONG LOL
It's 8% or less... 1-9% is the "BEST" range, so no more than 8% is recommended to ensure you don't go over that 9% which will put you in the "Good" range i.e. 10-29%.
Also, you want to once or twice a year have HIGH Utilization on a particular card which will give you more ability for the card companies to grant you a credit line increase on that card occasionally (thus giving you better ability to lower your utilization) or even lower your credit line if you're not ever using enough of your credit with that card which is something I've heard happens to some people. Further, you CAN actually KNOW "when" creditors or lenders report to the credit bureaus... Just CALL and ask.
Also, you couldn't be more wrong that having lots of credit and credit lines is "bad" or "unnecessary". The credit bureaus actually like to see at least 8 lines of credit of different types (for the best score it's 11). Also, the more credit you have allows you to keep your utilization low, especially if you need to actually use your credit line for something such as emergencies or whatever. I mean a $3,000 credit line is nothing, that's a Transmission repair AT LEAST.... so REALLY BAD advice. Not everyone can have thousands of dollars in the bank for emergencies, and even if they do having a lot of credit still has multiple value uses.
Having a credit card for example didn't strand my family and lose our purchased tickets when we lived in Hawaii once and we were moving cause we ended up having to buy another ticket at the last minute. As well, my not having enough credit caused me to lose my car once when it broke down and I didn't have the money to get it towed home or to a shop or get it out from the tow company who towed it, so they ended up keeping it.
So, you've given VERY BAD advice when it comes to the "amount" of credit people should have. You want to have ALL YOU CAN GET.
Now, obviously, if someone has no self-control isn't learning and being responsible with their credit then, of course, you can advise them to have "less", but if people are trying to be responsible with credit, then they generally aren't that, so your advice is STILL bad. It's actually too late for that advice, the cat is out of the bag. Going forward, they need to know how to do things properly, as well as be secure, and credit helps provide security and multiple other things just like money itself does.
Another aspect to having a lot of credit other than benefiting your score, emergencies, better interest rates, etc. is that it allows you to LOCK away your Debit Card at home and only use your Credit Cards and other lines for purchases and bills, which helps keep your money safer from fraud. CC's are much easier to fix and better protected from fraud issues than your bank account.
One other thing is you DO want to use your card and show you are utilizing it... Yes, pay it off every month, but NOT "immediately" after use like you said, unless you've overutilized your credit, then you pay that down some before the card company reports to the bureaus.
One more thing, if you make enough money to have $100,000 of credit, then you also have had good credit history to even be able to get that high a limit, so that car dealership isn't going to care about you having such high available credit. That is a ridiculous argument. My sons have two $5,000 credit cards, when I was a bit older than them, I had a $10K credit card as a single card, I now have $11K of credit with multiple cards, building my credit up (had to restart, had a bad wife, divorce, debt cause of her, etc.). Millionaires literally get MILLION DOLLAR credit limit cards... Anyway, a totally false argument... The only way your argument is valid is if someone makes like $15,000 and they have a $100,000 in credit, which just doesn't happen, so sure, THEN they would be a risk and not be lent to, but you all are just talking bull donkey in these particular issues.
Dang bro, you had to write us a book report?.
@@dral22 ... I don't believe in opening my mouth unless I'm stating something useful. Also, falsehoods, mistakes, or misunderstandings need to be corrected or people are led astray. So yes, thank you, it's important to make things properly clear.
Further, a couple of paragraphs isn't even close to a "book report". Believe me, wrote many of those. Also, if you got time to watch a video, you got time to read a few paragraphs also giving important info on the subject. I've found that often the comments sections, especially on important subjects can provide valuable incites and perspectives that adds to the subject matter. So, doing my part.
I would recommend you remove your kind of thinking, it will limit you. Your mindset should instead be, "give me everything on a subject so I can actually understand it correctly". Don't be like far too many people in this world who are just "propagandized" and thus believe false things simply because they come from "authoritative" sources. This is the fallacy of appeal to authority. Stay away from it like the plague, no matter the subject matter.
Good luck...
Very good advice! Someone told me to charge and pay your bill in full 3 days before your due date. Then, charge again right after your statement date.
@@shaunsmith8780 ... Yes and no, the way it works is use your card all you want, then pay it BEFORE the Statement Date, because that date is when they report to the Credit Bureaus what you've used on that card for that statement period, but if it's paid off before the statement date, they they report zero utilization.
Now, if you "need" to use your cards more, i.e. you're not able to pay the card in full before the statement date, then just have the Utilization below 9% ideally and ensure you pay before the Due Date, so you're never late.
So, technically if you're paying in full before your due date but it's after your statement date, like you said 3 days before the due date you'll be in the middle of your current Statement, so if you want to make it easier on you, you CAN do that. Just know the rule is to have no utilization, which is best (cause they actually see your highest use on your cards, so there's no actual "need" to show utilization) just be sure to pay before the Statement Date.
But like I said, it's also fine to pay in full by the due date to just make it easy to track, cause you're in the middle of the current statement, so plenty safe. When you start having a lot of cards, it can be hard to track, so just paying in full by the due date and after the statement date can be fine. Good luck.
You sound like you know your stuff, out of interest, does TOTAL debt VS TOTAL income per year have any impact? I notice on mortgages they do DTI ratio but this is monthly but I almost never hear about total debt vs total income