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So everyone is aware of the general rule that you should keep credit card utilization below 30% of your credit limit. It's also a good idea to keep this utilization above 0%.

It's very easy to stay below 30% if you just always keep your balance below 30%. Whenever you get close to that 30% ceiling, you pay it down, or pay it in full.

What isn't so easy is making sure you stay above 0% without carrying a balance. A lot of websites say "You don't have to carry a balance. You should pay it in full before the due date every month. Just using your card is enough to show activity". That sounds great and all, but it doesn't specifically address how that ensures you don't have 0% utilization if you zero out your balance every month.

For example, I have had a Wells Fargo credit card for about a year now. I have used the max available credit every single month, and then paid it off in full at the end of the month. I just signed up on Mint.com and with that I got a free credit report. My credit card utilization on the report was 0% even though I maxed out my limit every month.

Ideally, I'd like my utilization to be 20-25%. Is it even possible to attempt to achieve this, or at least get it above 0%?

It seems like you need to know when your specific issuer reports your information to each of the 3 credit bureaus, or more importantly, at what point during the month they are taking this "snapshot" of your balance that gets reported to each bureau.

If anyone could have an answer to this, specifically for Capital One, that would be great. I'm switching to their quicksilver card.

Basically, I want to ensure that I maintain a utilization rate greater than 0%, while paying my balance in full every month.

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    My utilization was near zero for decades, yet when I bought the house I was told me credit rating was in the upper 700's. Why are people worrying about trying to optimize this?
    – keshlam
    Commented May 19, 2015 at 0:01
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    If you must have a 0 balance on your statement, use CreditKarma to see what day your balance gets reported. It is generally 1-2 days after statement date. Then try to get something to post in that 1-2 day window. I think you are misunderstanding "carrying a balance" though. If you have a balance on your statement date you have 20+ days to pay it before your due date. As long as you pay it by then, you won't pay any interest. "Carrying a balance" generally refers to not paying it in full by your due date, not by statement close date.
    – VBCPP
    Commented May 19, 2015 at 0:07
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    I agree with keshlam. People are really overthinking credit scores.
    – JohnFx ♦
    Commented May 19, 2015 at 0:13
  • I auto pay the statement balance on the due date and have an 830 fwiw.
    – Jeremy
    Commented May 20, 2015 at 3:29
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    Keep in mind credit scores are for the bank, not for you. Smart financial decisions for yourself may affect your credit score negatively, but that's really ok. You want to optimize for your own benefit, not for the bank's. So unless you are planning to get a mortgage or very large loan soon, pay your credit cards off every month and don't worry about the Credit score.
    – Hilmar
    Commented Jul 10, 2018 at 12:26

4 Answers 4

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The only time I had a reported zero balance was when I paid in full the day the bill was cut. The bill itself was zero, the utilization was zero. It was an experiment, and cost me 20 FICO points, if I recall correctly.

Since then I pay the bill in full after the bill is cut. My only issue on the high end is when that card went to 90% utilization. Again, just one month, a 10 point ding. Since I know about both extremes, I'd ignore them unless I needed to borrow, say on a new mortgage. Then I'd prepay the card to get to 1% utilization, so the balance would impact my borrowing ability. This is theoretical, of course. I am old, retired, and with a 3.5% mortgage, I don't expect the opportunity to refinance at a better rate.

Note, as Ben commented, the utilization effect is very temporary. It's literally a snapshot. So the next snapshot will update and change the score a month later. I confirmed this after both my zero and high utilizations. Back to prior scores after a month. For this reason, it's worth noting as the comments to the questions suggest, there's no need to obsess over this metric at all. The 20-30 point swing only comes into play when applying for new credit. Otherwise, it's just a number.

I have 2 active cards I use, and both report the same balance as the bill. Others have said they've seen their accounts report during the billing cycle. I recommend using a site like Credit Karma to see how your card(s) report.

Update: Here is an example of the swing that a simple even can cause. My billing cycle has a statement date of the 15th. But the card reports at month end. In the December cycle, I used the card to make my year end cash donations, but let the 31st pass without making a payment (as the prior bill was paid in full and new one is cut on 1/15). This was the result -

enter image description here

Also note, no new credit pull, nothing late. The utilization went from 2% to 20%. I have no need to apply for anything, the next cars in the family will be cash purchases. The 20% was an experiment to text the impact on (Credit Karma's version of) my score. They say it's "Calculated using VantageScore 3.0". We'll see if it bounces back 100% when the cards are down to 1% again. Honestly, I was expecting 15-25 points drop, not 65.

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    It is important to note that the 20 point swing mentioned here is temporary. The credit utilization portion of your score has no memory, so if the utilization went back to normal next month, your score went back to where it was.
    – Ben Miller
    Commented May 19, 2015 at 11:40
  • I was thinking this, but failed to include it in answer. Will edit later.
    – JTP - Apologise to Monica ♦
    Commented May 19, 2015 at 13:24
  • Thanks for the detailed answer! That makes sense that it's the statement closing balance that's reported, and since the grace period between then and the due date is around 20 days, you can always pay at the due date, and you will always have a balance at the statement closing date. I also had no idea that only the most recent utilization matters. That really puts it into perspective.
    – wired_in
    Commented May 20, 2015 at 5:29
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Basically, I want to ensure that I maintain a utilization rate greater than 0%, while paying my balance in full every month.

You will have a utilization of greater than 0% and you will be able to pay it off every month if you just use it regularly and pay it when the bill is due.

This is a typical cycle for one of my credit cards:

  • 13 April 23:59:59 close a billing cycle send a bill for the balance of the account.
  • 14 April 00:00:00 open a new billing cycle
  • 08 May due date for the bill that was generated on the 13th of April. pay the bill
  • 13 May 23:59:59 close the billing cycle. send a bill for the balance of the account.

The only way my credit utilization is zero is if I don't use the card between 14 April and 08 May. Any charges on the card will mean that when I pay what I was billed the balance won't be zero. Paying what you are billed avoids late fees, raised interest rates, and allows you to keep using the float; all while keeping your utilization between 0% and 30%.

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  • Thanks for actually showing how the monthly cycle works. This is a great answer, and I wish I could accept more than one :/ Definitely upvoted.
    – wired_in
    Commented May 20, 2015 at 5:31
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Just pay your bill in full every month. And don't have more than 3 cards.

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    As simple as this answer is, after going in depth with how the billing cycle and credit reporting works, this is actually more or less a complete and accurate answer.
    – wired_in
    Commented May 20, 2015 at 5:35
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Get a card that offers 0% interest for a year or more (as the Cap1 Quicksilver did when I got it), then charge the appropriate amount and pay the minimum until just before the end of the 0% period, when you pay off the outstanding balance. Then get another 0% card and repeat the process... (I'm on my 4th or 5th now. and have an 800+ rating.)

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    How does this address the question?
    – JTP - Apologise to Monica ♦
    Commented May 19, 2015 at 10:59
  • @JoeTaxpayer: Unless I misunderstood, the OP wants to carry a balance that is some fixed percent of his/her available credit, presumably without having to pay interest on that balance. As far as I can see, a 0% card is the only possible way to do it reliably. Any others are subject to the vagaries of exactly when balances are reported, or would require you to over-spend in the first part of a billing cycle. If you have say $50K limits, but spend less than $500 in a typical month, how else is it even possible?
    – jamesqf
    Commented May 19, 2015 at 23:08
  • @jamesqf No, I don't ever want to carry a balance or pay interest, and at the same time, ensure that my credit card utilization is above 0% and below 30%. The key is that the balance that is reported each month is the statement closing balance, and there is a 20 day grace period between the statement closing date and the due date. So if you pay in full on the due date each month, and always maintain a balance for the rest of the month, you will always have a balance when the statement closes, and that's the balance that matters.
    – wired_in
    Commented May 20, 2015 at 5:38
  • @jamesqf I also just got approved for the quicksilver card. It's in the mail.
    – wired_in
    Commented May 20, 2015 at 5:39
  • @wired_in: That assumes that you always buy something with the card during the grace period, which for me might not happen. You also say that you want to keep utilization at 20-25%. Now unless you have a really low credit limit or a very extravagant lifestyle, I don't think you can spend that much, consistently. I almost never have monthly balances > 1-2% of total card limits. (Excluding the current 0% card, of course.)
    – jamesqf
    Commented May 20, 2015 at 18:18

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