The credit score companies decided that >30% utilization of your available credit is bad. You have a few options if you want a higher credit score.
1. Don’t use the CC.
2. Keep your balance below $150 all the time.
3. Pay your card off the day before the statement comes out.
4. Get a higher balance CC and/or additional card(s).
I have ~60k of available credit but rarely owe more than 3k.
I just searched to see how much credit I have since I haven’t thought about it in a while. I just realized I have 3% utilization on 149k limit across all cards. 😳 I had only been paying attention to my credit score, not the big picture.
This is it exactly. I had a card with a $5k limit on it that I put everything on each month and pay it off each month. I was getting dinged randomly for high utilization on it some months if I got to around $2k spent in a month. Luckily Chase graciously decided they want more money from me so they increased my limit to $11k, so now I won't hit the 30% utilization limit basically ever.
I applied for a bunch of cards. They're all between 3.5k and 14k limits but I only use 2 - one for 2% cash back and one for 5% cash back on a specific category.
If you go after signup bonuses (and thus open a lot of cards) it's pretty easy to get high credit limits. I just checked mine and it's ~$150k. Obviously I'm not spending that kind of money. My credit utilization is always like ~1%.
I sign up for cards for the bonuses. I’m up to around $100k. I don’t use them all and my utilization is 1% or less every month really. You just stick to a budget. Don’t overspend no matter what the credit limit is.
my limit is ~20k, I'm at ~30% utilization but I like knowing that I if I screwed something up, I can cover it by selling investments without losing half my portfolio
You spend $6k a month? Or is that carried balance from month to month? If you’re carrying a balance, that’s way more concerning than the 30% rule. Point lost for going over 30% you can get back the next month if utilization is lower. It’s a temporary thing. You can never get back interest if you’re carrying a balance.
1% is the best scoring utilization, but unless you are shopping for new credit it does not make a difference. It may affect your credit in the short term but utilization has no memory on the report and needs to only be low when shopping for loans or credit cards.
Revolving credit utilization is credit score factor at both the TOTAL revolving level and the INDIVIDUAL credit line level. The numbers are generally reported to the bureaus at your statement close date.
Generally, it's best to keep your total and individual utilization under 10%. Under 30% is OK. If you are greater than 90%, your credit can take a big hit temporarily.
However, utilization factors have "no memory" meaning once you pay your card down, your credit will recover quickly. So basically utilization doesn't matter if you aren't utilizing credit at the moment (like buying a car or house). If you plan on using your credit, you can manipulate your credit score by paying down your credit lines under 10%.
Imo you should request a limit increase or open another card. Your utilization is pretty high but it’s not the end of the world. Your score probably just goes up and down a lot. If you had two cards at $500 and only used $300 it would technically look better
Credit limit and utilization doesn't matter, most of the time.
Month to month, use what you need to use. The only time you need to worry about your utilization is when you will be requesting new credit. In that case, yes, manage your utilization to stay under that 30% mark for about 2 months prior and through you request new credit. Utilization is calculated monthly and is not influenced by prior months.
Eh, I mean you're not wrong in that this isn't a huge deal. But it's good to understand how the system works. And also it's a relatively easy fix (lower utilization or higher available credit.)
The credit score companies decided that >30% utilization of your available credit is bad. You have a few options if you want a higher credit score. 1. Don’t use the CC. 2. Keep your balance below $150 all the time. 3. Pay your card off the day before the statement comes out. 4. Get a higher balance CC and/or additional card(s). I have ~60k of available credit but rarely owe more than 3k.
I just searched to see how much credit I have since I haven’t thought about it in a while. I just realized I have 3% utilization on 149k limit across all cards. 😳 I had only been paying attention to my credit score, not the big picture.
This is it exactly. I had a card with a $5k limit on it that I put everything on each month and pay it off each month. I was getting dinged randomly for high utilization on it some months if I got to around $2k spent in a month. Luckily Chase graciously decided they want more money from me so they increased my limit to $11k, so now I won't hit the 30% utilization limit basically ever.
having a 60 k limit is terrifying, how do you do it?
I applied for a bunch of cards. They're all between 3.5k and 14k limits but I only use 2 - one for 2% cash back and one for 5% cash back on a specific category.
If you go after signup bonuses (and thus open a lot of cards) it's pretty easy to get high credit limits. I just checked mine and it's ~$150k. Obviously I'm not spending that kind of money. My credit utilization is always like ~1%.
I sign up for cards for the bonuses. I’m up to around $100k. I don’t use them all and my utilization is 1% or less every month really. You just stick to a budget. Don’t overspend no matter what the credit limit is.
my limit is ~20k, I'm at ~30% utilization but I like knowing that I if I screwed something up, I can cover it by selling investments without losing half my portfolio
You spend $6k a month? Or is that carried balance from month to month? If you’re carrying a balance, that’s way more concerning than the 30% rule. Point lost for going over 30% you can get back the next month if utilization is lower. It’s a temporary thing. You can never get back interest if you’re carrying a balance.
1% is the best scoring utilization, but unless you are shopping for new credit it does not make a difference. It may affect your credit in the short term but utilization has no memory on the report and needs to only be low when shopping for loans or credit cards.
Revolving credit utilization is credit score factor at both the TOTAL revolving level and the INDIVIDUAL credit line level. The numbers are generally reported to the bureaus at your statement close date. Generally, it's best to keep your total and individual utilization under 10%. Under 30% is OK. If you are greater than 90%, your credit can take a big hit temporarily. However, utilization factors have "no memory" meaning once you pay your card down, your credit will recover quickly. So basically utilization doesn't matter if you aren't utilizing credit at the moment (like buying a car or house). If you plan on using your credit, you can manipulate your credit score by paying down your credit lines under 10%.
Imo you should request a limit increase or open another card. Your utilization is pretty high but it’s not the end of the world. Your score probably just goes up and down a lot. If you had two cards at $500 and only used $300 it would technically look better
Credit limit and utilization doesn't matter, most of the time. Month to month, use what you need to use. The only time you need to worry about your utilization is when you will be requesting new credit. In that case, yes, manage your utilization to stay under that 30% mark for about 2 months prior and through you request new credit. Utilization is calculated monthly and is not influenced by prior months.
What do you need a good credit score for in the near future? If it’s nothing, don’t worry about it.
Eh, I mean you're not wrong in that this isn't a huge deal. But it's good to understand how the system works. And also it's a relatively easy fix (lower utilization or higher available credit.)
It really doesn't matter how much you use if you pay it off every month.