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Question By
EmsLemonds

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HELP! confused about credit utilization and reporting days
Ok, so I just activated a secured credit card to try and help build my credit a little. My limit is 351. So with that, in order to keep my utilization low, the balance that I should keep should be $35.49 which keeps my utilization at 10% right? So I contacted the credit card company and they said that at the 19th of each month is when they report to the bureaus. So I'm thinking I could use my card way more than $34.95, just as long as the number that is reported on the 19th is at around 10% utilization. Does that make sense? But what I'm really confused about is the fact that my balance due date is the 16th!! How does that factor into utilization? because if the prior month on the 19th is reported that I utilized 10%, which is good, how do I utilize the next 10% for the following 19th if my statement is due on the 16th? Because by that point I would have paid off my balance in full right? so I would have a zero percent reporting 3 days later, which I have seen is not good. So between the day I pay off the balance (the 16th) and the 19th(reporting day) does that mean I should use my card at least 10%? Ugh this is so confusing, it bothers me. Any advice would be appreciated!

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You are pretty much on track as to how that works, but I don't advise carrying a balance over, avoid paying interest if possible. You should show revolving activity every month to appease the FICO scoring systems. If your bill is due on the 16th, it will not contain charges that you have made right up to the 16th, the amount due will be from a period of time prior to the immediate days leading up to the due date. You may just have to study this for a couple of months to figure it out, either way, interest wouldn't be that much on the amount. The penalties and rewards vary month to month as your utilization does, there is no permanent damage with high credit utilization.

Reply by
EmsLemonds

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Thank you for the response! I thought I was kinda on the right track. But I just got confused about when they reported the statement vs. when my bill is due. And if the report date is 19th, how does that help me if I pay off the balance by the 16th. Ugh. Its so frustrating, but I see what you're saying, its basically a spending period before the bill due date that shows my balance, but their will still be things that I brought that won't be on the cycle, which will help that 19th reporting date.  

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I'm thinking then I shouldn't pay the full balance when its due on the 16th then, in order for it to be reported on the 19th. But won't that accrue a hefty amount of interest, and also affect my score, not paying a full balance on time?

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It sounds like with the due and reporting dates the best thing you can do is pay in full the amount due each billing cycle.  Showing a balance is not any key to building your credit.  The card will show that you are making payments on time, and that you use the card enough to keep the account open, so keeping your charges to under 10% or even nothing some months, as stated before your due amount is from the prvious month, and making full payment due will show good usage and ontime payments.

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