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Credit Utilization: Snapshot, or taken over time?

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Credit Utilization: Snapshot, or taken over time?  Reply with quote  

My question is on credit utilization (the ratio of debt incurred to credit available). I'm not certain how to word my question, so here is a hypothetical situation instead:

If I max out my credit cards for three months in a row, and on the forth month I pay them all down to a zero balance, what happens? Is my credit utilization at 0, thus not impacting my credit score, or does my credit utilization factor in the previous months and have a negative impact anyway?

Post Thu Oct 25, 2012 5:55 am
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That's a really great question!!

Your credit utilization ratio is calculated as of your credit balances on the date your account is reported to the credit agencies. This is done on a monthly cycle and it does not necessarily coincide with your billing cycle.

To find out what those dates are, you'll have to ask each of the agencies what their date is for your account. Obviously, having three different dates each month for each credit account is not something most people are going to want to factor into their credit usage decisions.

Post Thu Oct 25, 2012 2:54 pm
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