I've read that keeping one's credit card utilization below 20% improves your credit score.

If for some reason I have an expense that is greater than 50% of the credit limit and I pay by credit card, and then transfer the money to the credit card account immediately, will the higher utilization still affect my credit score?

5 Answers 5


No, it won't affect your score until your statement is posted. Paying your bill before your statement is posted is actually a good way to keep your credit utilization low. If you're worried about high credit utilization negatively affecting your credit score, consider paying your bill several times a month to ensure that when your final monthly statement is posted, your utilization is still low. When my credit limit was very low while I was in college, I did this almost every month, and I've seen other sites recommend this practice as well.

From creditkarma.com:

The easiest way [to lower credit utilization] is to make credit card payments more than once a month so that your balance never gets too high.

and creditcards.com:

Consider making payments to creditors more than once each month. Otherwise, if you put a major expense -- like a new appliance -- on a credit card, even if you plan to pay it off, your FICO score may take a hit. The reason is that credit scores are calculated as a snapshot in time, so if that happens to be right after you charged a new $700 washing machine, your utilization ratio will look worryingly high.

Remember, though, that it's best to have some balance on your card when your statement is posted (assuming you pay it off in full each month), because as the chart shows, 0% utilization is about as bad as utilization > 31-40%:

credit utilization - credit karma

Also, remember that credit utilization affects your credit score in real time, so if you have high utilization one month but a lower utilization the next month, the hit to your score will disappear once a statement with low utilization is posted.

  • 2
    Something I have found useful: a lot of credit cards allow you to set up an e-mail alert when your balance gets too high. But you can usually specify any amount as a threshold, thus you can use it to help keep credit utilization low by setting the threshold to 20% of your limit :)
    – Kevin K
    Jul 30, 2013 at 1:57
  • @KevinK Great point. I recall using that feature with my first credit card, I think. I definitely remember that my first student card had an option to notify me if a purchase was made above a certain amount, but that's more of a fraud prevention mechanism. Jul 30, 2013 at 2:03
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    That graph is interesting, but it seems horribly misleading to me. It's a graph of survey responses; having 0% utilization doesn't necessarily hurt your score much (if at all). People with 0% utilization have lower scores for other reasons - many of them probably have nearly no available credit, in many cases because they can't qualify for any credit. At most 0% utilization hits you a couple of points - in the CK simulator it seems to knock 5 points off or so compared to relatively light utilization.
    – Joe
    Apr 5, 2016 at 16:10

No. It's the total on the bill statement that's reported, not the daily value. Pay before the bill is cut and you are fine. This is a great strategy for those who find their line to be too low.

Update - when I answered this, it was true, and pretty much went unchallenged. Some months back, a card I use changed banks. And my score blipped down. I had been on the habit of paying most of my balance in full the day of, or day before the statement was cut. I saw the balance reported on this card was as of the last day of the month, not the amount billed. I started paying the card's full balance on the 30/31 and the score returned to normal. This was the first I'd ever seen this, and no other member here has shared the same experience, yet.

  • This is a good answer regardless, but I feel obligated to upvote it because I linked to another answer of yours on the same subject in my answer... Jul 29, 2013 at 21:16
  • 1
    Here's a statement which backs up your observation: "...some banks use a cutoff date unrelated to the statement date to send the data about your account as of that point in time." From creditcards.com/credit-card-news/…
    – TTT
    Sep 27, 2017 at 21:46

Paying weekly to be able to have maneuver room under your credit limit is a way to handle low credit limits. Doing it to boost your credit score when you have no immediate need for a loan is wasting energy.

A few months in advance of buying a car or house, you can start to worry about your utilization rate. When you apply for the loan they will pull your credit file, and that will lock in your utilization rates. Then make sure that you pay the balance quickly, and if you need to make a big purchase pay the bill before the account closes for the month.

Keep in mind that if you pay the balance every month the highest utilization rate will occur the day the payment is due. This is because it not only has all the purchases from the previous bill, but all the purchases you have made since that bill closed. For example if you have a credit limit of 10K and you spend 2K a month on the credit card, on the day the payment is due it is not unusual to see the total owed to be above 3K. If they pulled your file on that day, your utilization rate would appear to be above 30%.


Paying up in full before the statement is posted does not seem a good idea. I feel you should keep some small amount to be posted as a statement balance and pay that in full each month. If you keep your statements as always 0 will give creditors an impression that you have cards and you don't utilize them, so they cant really gauge how you preform being debt, whether you are able to manage your debt well etc. I always keep <100 dollar in every credit card I have to be posted a statement balance. I have >100k credit line over 3 cards. So if I take air ticket to SE Asia runs into 3000$ for my family, I pay 2900.00 a day before statement generates and keep 100 for statement to be posted. pay 100 the next day or as auto debit. This way you have some utilization + lower credit card outstanding at any point make your utilization right in single digits.


Since recent changes to credit scoring (July 2017) it may not be necassary to do this, as more emphasis is placed on having a timely payment history and less emphasis is placed on having a low credit utilization ratio.

Using what’s known as trended data is the biggest change. The phrase means credit scores will take into account the trajectory of a borrower’s debts on a month-to-month basis.

In fact, having a low credit utilization ratio may even negatively effect you (if your available credit line value is high):

... VantageScore will now mark a borrower negatively for having excessively large credit card limits, on the theory that the person could run up a high credit card debt quickly. Those who have prime credit scores may be hurt the most, since they are most likely to have multiple cards open. But those who like to play the credit card rewards program points game could be affected as well.


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