3 People Helped
Member Since: September 2013
The trick to this is understanding your Closing Date versus your Due Date. Whatever balance is on your card at your Closing Date will get reported to the credit bureaus. However, you then have a grace period from then to your Due date to make the payment, interest-free if you pay off the entire balance. This is how I get my credit utilization to reflect an A grade. Add in automatic payment of the entire balance each month near or on the Due Date, and you don't even have to worry about it. I don't pay interest on my credit cards, and I use them for ALL my purchases, for the cash back rewards of course - this way they're essentially paying you to use their cards.
duplex80's reply was:
You should check your credit card statement for that period. If your statement balance was $363 at the end of that period, that would have been reported to the credit bureaus, which is a 73% utilization. If this is not the case, start by contacting your credit card issuer.
If you check your Credit Report Card in CK, you'll see that a 0% utilization (which your $0 total credit cards balance will give you) will earn you a C grade. There is no error here. If you keep your credit card utilization between 1% and 20%, this will earn you an A grade.
The short and fast reasoning here is that 0% utilization (no credit usage) does not prove you can handle credit responsibly (hence the C), whereas between 1% and 20% utilization (low credit usage) is a more reliable indicator of responsible credit usage (hence the A). Note that if you use your card(s), but pay off the balances before they are reported each month, your utilization will remain at 0%.
When you pay off the Card Balance each month by your Due Date, which usually comes right before your Closing Date, the only information the credit bureaus receive is that you have a $0 balance on your card. The credit bureaus get info on your card use about once per month, around the time of your card's Closing Date. So in effect, to the bureaus, it looks like you haven't used your card at all. This is why it's important to carry a balance. Note that if you pay off the Statement Balance (not the Card Balance) by the Due Date each month, you will carry a balance each period, but you won't incur any interest charges (due to the grace period).