How does credit utilization work for credit score?

I've heard you should keep the credit ratio for each card at 20% or below. If I have $600 credit limit and I spent about $180 on the card, which is 30%, will this affect my credit score if I pay it off the next day? Do the credit bureaus count credit utilization as credit balance carried over for that period or whenever you use that much credit limit even if you pay it off asap without carrying a balance?|||If you carry balances on your credit cards of more than 30% of your limit (debt to limit ratio), you hurt your score. Pay off the balance and your score rebounds. If you pay your balance in full every month, this makes no difference.





Utilization is not the same as the debt to limit ratio. Yes, utilization does impact your score. However, it REALLY is not worth the effort to figure out exactly when when the credit card will report to each of the three credit bureaus and then schedule charges and payments to get the perfect utilization rate for the best score. By the way, the perfect utilization rate is a lot more than 30%.





You should also not make payments immediately after making the charge. Wait for the statement and then pay the balance in full. Credit card companies only report once a month. Whatever shows on your account at that time is what gets reported. If you immedately pay after making charges, you are likelyl to show no utilization at all.





Basically, don't over think it and don't worry about all the extremes for a point here or there. Utilization all evens out over time. Just use the card for regular purchases, wait for the statement, and pay the balance in full. You will build good credit history and avoid interest.





By the way, the fastest way to get a limit increase is to use 70%+ of your limit and pay in full every month for abotu 9 months.|||The answer you get will vary by the source. I use one service that says not to go over 50%. 1/3 is the rule of thumb I see most often. You should be fine.


Credit utilization may be kept that finely detailed by the lender, but the credit bureaus go from one update by the lender (credit card company) to the next billing period report.


In your example, the credit bureau may not even know you did anything. IF the card is one that allows you to pay off the balance without interest in 25 days after billing, let them bill you and then pay promptly.|||Credit bureaus generally get the statement balance. If you pay your charges off immediately, that will be reflected in your statement - you'll have $0 balance. So no, it wouldn't affect your credit.