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Myscrn2yours

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Credit Utilization grade
Currently have a Credit Utilization of '0', but have a grade of 'C'. Why is that? My Target Visa does get used each month - a charge of 5.34 for Netflix. Should I be running a balance on my Target Visa.

Is the grade of a 'C' just because the last time Credit Karma 'looked', there was no balance on it. Meaning that had they looked during the time of month when there was an unpaid amount, the grade would have been different?

Just wanting to know how concerned I need to be about using my card. I know there are some who suggest using a credit card to pay all revolving credit bills and then writing one check to pay that card balance off each month.

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It's not so much when CK "looks" as when your credit card company reports to the bureaus. That usually happens about a week after issuing your monthly statement -- and if there's a zero balance at the time your monthly statement is issued, zero is what CK will see until the next report.

The scoring systems don't like to see zeros. That's because they're not designed to monitor our financial prudence; they're designed to see how profitable we're likely to be as customers. To be profitable we have to look like we're using our credit.

So yes, keeping a small balance at the time your statement is issued is good for your score. The recommended figure is between 1% and 20% overall utilization of credit cards. You'll have to experiment to find your own "sweet spot," but nationally, the people with the very best scores average 7% utilization.

Then once your statement is issued, you can go ahead and pay it to zero if you want to. But have at least a small balance one or more cards again at the next statement date.

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