The Master $2 reporting "trick" explained

[earnestbunbury11]

I don't have a clean report, but still do it for discipline. An example from me would be: I use ONE card a month. I'll use it for everything I can or almost nothing; that is, I'll pay all my bills with it or just buy a gallon of milk. If I spent a lot, say $300.00 on a $1000.00 card then my statement that month would say I used 30%. I pay NO interest, just pay the $300.00 off, but it is being reported as 30% utilization. IF, however, I paid it all off except $2.00 a couple of days before the STATEMENT date, then it will be reported as <1%- that I used the card (which they like) but not that much.

 

So- what you have to find out if you want to do this is when your statement cuts. Not the 'Due date', but the statement date. It's usually (but not always- there's a thread I'm told) a couple of days after your 'payment due date'. It's best to call the credit card company and ask them when the statement date is. Also, if you go online and look up your statements a menu normally appears and asks what statement you want to see. Like, Jan 6th, Feb 6th, Mar 6th, etc. Now you know when your statement is cut, in this case the 6th. Pay down the card leaving a $2.00 balance. When the CRA's look at your utilization it'll show only $2.00. Right after it's reported that you only used your card for $2.00 you go BACK online and pay off the 2 bucks. You never actually pay any interest, because you're paying it off before the next cycle.

 

My advice (such as it is) would to NOT try and do this with all your cards. I tried and it's a full time job keeping up with which date which card's statement is cut. So I just use one card all month and pay it off ($2.00 balance, of course) a week before the statement cuts, just to be sure. After a month or two I switch cards and do it another one. Right now, for instance it's BURNED in my head that I have to pay my card down to $2.00 before the 9th. Then the CRA's will think I'm cool because I'm only using <1%. The credit card company thinks I'm cool because I'm using their card, which will help when I ask for a credit limit increase.

 

Ignore the parts of what I said that are completely wrong. They will be explained to you in various posts under this one. I'm a novice, but learning.

[mendelssohn]

There's no reason to use just 1 card.

 

Know your statement dates and pay accordingly.

 

Using 1 card means you're missing out on rewards.

Edited July 14, 2015 by mendelssohn

[fangirlxILM]

I don't have a clean report yet but I'm getting there (no lates but some col and higher util) and I'd like to work toward this. I've paid my CC util from 60% (some cards in the high 90s) down to about 20% leaving me with two cards left to pay on. I think I could reasonably pay one of them off too but I'm afraid to spend up all my cash right now (waiting to see how a possible mortgage situation pans out). Anyway, my cash back card is paid off completely but I'm planning to use it long-term for my bills that auto-draft instead of my debit card to earn the rewards throughout the year. I've just recently started doing this and as soon as the transactions post, I make my payment for it. Now, since I have two other cards reporting balances, right now I'm just focusing on keeping my util low and make sure it reports low/no balance due, but once I get them paid off I think I could reasonably transition to this.

 

Now, if I have a question about util% overall vs util% on a card by card basis, and maximizing scores (basically how to maximize score gains while paying down-or using- CC debt) is there some similar research on that? Or might there be another thread or link you could direct me to?

[pwd847]

Last month I had a few dollars report. FICO's were approximately 738. This month I had $0 report. FICO's were approximately 725.

[josephina]

So if I want to see this effect asap, I should determine which cc statement is going to close the soonest (or actually in a few days to allow posting time), charge $2 on it (or pay balance down to $2 if there's already a balance)? This also assumes that all other cards had a $0 balance on their last closing dates. Assuming that's the case will the card with the $2 balance report to the CRAs within a few days and will the CRAs calculate a new score based on this data (or not, if my overall profile is such that it would not change my score)?

[pwd847]

Correct. Except the Fair Isaac Corporation would calculate your score, not the CRA's.

[gto]

I have 3 cards with 80% util (avg CL $8k) and 6 cards 0% util (avg CL $6k)

Clean report. just high util on the 3 cards

would the $2 trick help on the cards not being used?

Or is this trick for people with 0% util on all cards?

[fangirlxILM]

I have 3 cards with 80% util (avg CL $8k) and 6 cards 0% util (avg CL $6k)

Clean report. just high util on the 3 cards

would the $2 trick help on the cards not being used?

Or is this trick for people with 0% util on all cards?

The idea is to have the $2 report on only one of your cards, so that it would be the lowest possible utilization (we're talking about that card and your overall revolving credit limits) that would still generate a report. I'm pretty sure if you're carrying balances on other cards then keeping the others reporting at 0%/$0 is a good move. More experienced board members may of course have more to add, but that's what I've gotten out of these discussions.

Edited August 7, 2015 by fangirlxILM

[pwd847]

 

I have 3 cards with 80% util (avg CL $8k) and 6 cards 0% util (avg CL $6k)

Clean report. just high util on the 3 cards

would the $2 trick help on the cards not being used?

Or is this trick for people with 0% util on all cards?

The idea is to have the $2 report on only one of your cards, so that it would be the lowest possible utilization that would still generate a report.

 

To look at the bigger picture:

 

Don't think of this as a $2 trick. Think of it as keeping your entire profile at 1% utilization. So if you have a mortgage don't do this. If you have unpaid collections, don't do this. If you have a secured personal loan, don't do this.

 

If you report reflects that you owe anyone, anywhere some money.......don't do this.

[mendelssohn]

$2 isn't going to kill DTI on a mortgage app. I recommend it, especially if borderline in a scoring tier.

 

If you are carrying balances on other cards, this will work for you, BUT that means that you are planning in PIF your balances. If you are carrying balances, you are missing the point of this thread.

 

Edit: and you still generate reports and scores no matter what your utilization. This is just to get the most points possible awarded by FICO for utilization.

Edited August 7, 2015 by mendelssohn

[fangirlxILM]

$2 isn't going to kill DTI on a mortgage app. I recommend it, especially if borderline in a scoring tier.

 

If you are carrying balances on other cards, this will work for you, BUT that means that you are planning in PIF your balances. If you are carrying balances, you are missing the point of this thread.

 

Edit: and you still generate reports and scores no matter what your utilization. This is just to get the most points possible awarded by FICO for utilization.

 

Sorry mendel- I got the terminology wrong. I meant that it was to get it to report the balance to the card issuer (and then on to the CRAs) instead of $0

 

I should have said generate a statement, right?

Edited August 7, 2015 by fangirlxILM

[mendelssohn]

To generate a statement with a balance.

 

Most creditors still generate a statement with activity and a $0 balance due.

[Vireo]

 

 

 

 

I have 3 cards with 80% util (avg CL $8k) and 6 cards 0% util (avg CL $6k)

Clean report. just high util on the 3 cards

would the $2 trick help on the cards not being used?

Or is this trick for people with 0% util on all cards?

The idea is to have the $2 report on only one of your cards, so that it would be the lowest possible utilization that would still generate a report.

To look at the bigger picture:

 

Don't think of this as a $2 trick. Think of it as keeping your entire profile at 1% utilization. So if you have a mortgage don't do this. If you have unpaid collections, don't do this. If you have a secured personal loan, don't do this.

 

If you report reflects that you owe anyone, anywhere some money.......don't do this.

This is just wrong. Installment loan balances and revolving credit utilization are two separate metrics in FICO scoring.

 

The only time this doesn't work is when you are carrying credit card debt. In that case, you should only let a balance report on the card(s) you have debt on. You should pay the other cards down to $0.

 

It's not that difficult.

[AZNewbie]

Trying this for the first time- waiting for USAA to report to CRAs. Interested to see how my scores change.

[earnestbunbury11]

OK, but remember, this is if you owe $0 on all your cards. You can't do the $2.00 thing on one card if you have a balance on another card. FICO looks at all your cards limits and how much you use on any of those cards. That's why I suggested not trying to do this with all your cards. Because paying the $2.00 off on one card is great; you pay off the 2 bucks after the statement cuts- say, on the 15th of the month. So that's it for that month. If you try it with all your cards it will show your utilization as $2.00 times however many cards you do it with. That's why I like the ability with some cards to change your 'payment due date'. I can change them all to the same day so I'm not staring at the calendar every day thinking I'm missing a payment.

 

From the service I use I don't think that a mortgage or personal loan factor into this. The service I use doesn't tell me anything about loan payments in my monthly utilization. I only have the loan because it keeps suggesting I should get an installment loan. I guess eventually it'll help me, once it's paid down.

[mendelssohn]

Let's not complicate things. It's very clear in the first post.

[AZNewbie]

Thanks, mendelssohn. Easy to follow, data-driven advice.

[Buy49Get1Free]

What would a typical score change be in the following situation?

 

One month I have about 10 cards out of 15 report balances, with overall utilization about 3% and each individual utilization below 10%. Suppose score is 750 at this point.

 

The next month I have about 1 card report balance of $2, and the rest report zero. Score would jump from 750 to what (typically, or on average)?

[Vireo]

Let's not complicate things. It's very clear in the first post.

This forum really needs the "banging head against the wall" smiley.

[Buy49Get1Free]

What would a typical score change be in the following situation?

 

One month I have about 10 cards out of 15 report balances, with overall utilization about 3% and each individual utilization below 10%. Suppose score is 750 at this point.

 

The next month I have about 1 card report balance of $2, and the rest report zero. Score would jump from 750 to what (typically, or on average)?

 

Anyone got a ballpark estimate of how much difference this makes?

[mendelssohn]

There is no way to ballpark estimate. Just do it and see how much you gain.

[kimbachelle]

The research only shows that this gets you the maximum score that your profile allows. Unfortunately, as each file is so unique, there is no way to tell "how much" difference you will see. You may see no difference, some have seen as much as a 20 point improvement.

 

I would think, if you've had 10 cards reporting balances, you should see at least some improvement.

[Buy49Get1Free]

I will experiment, but won't necessarily make that change in a single month, so I won't be able to isolate it from other effects. I'll first see what happens when I have many (say 10 out of 15) accounts report balances (with util<10%). Hopefully the effect won't be too drastic.

[Konrad2012]

This topic reverberates to me like people confused how their statement can cut after their due date.

 

Mendel, I give you props. I don't have it in me to participate in these particular subjects any longer.

[Konrad2012]

I will experiment, but won't necessarily make that change in a single month, so I won't be able to isolate it from other effects. I'll first see what happens when I have many (say 10 out of 15) accounts report balances (with util<10%). Hopefully the effect won't be too drastic.

If you cannot isolate it from other effects, it's not much of an experiment now then is it?