For reference: I (22m) am a college student and I currently have a $700 limit on my CC. I also pay a $300 monthly car loan. For both of these, I pay off in full, on time for every statement date each month.
I got my first CC when I was 18 and mainly use it for occasional yet fixed expenses such as gas, eating out, groceries, and the occasional entertainment ticket (sports, concerts, shows, etc) once every month or so. Given that I am on a meal plan and am housed in a dorm, I rarely find myself eating out and don't have to pay rent as well as driving around so my current and normally expenses have been low at school and as a result, I usually stay under $200 on my CC per month.
As I said earlier, I pay my card off in full on the due date every month since receiving my card and have built an 805 credit score which has been that way for a while give or take; sometimes it goes as high as to 808, sometimes it drops as low as 798. This past month, I ended up spending a little extra on a plane ticket to visit my family for spring break which was an additional $300 which ended up being a $366 final statement. Again, paid it off in full on the due date.
I usually get weekly credit reports through Mint, which is an intuit company for those unfamiliar. I got an alert that my credit score dropped a significant amount (more than 10 points). I checked and it decreased to 775; I know that's still good but I was confused.
I got a tip from Mint that because I used around 40% of my credit utilization, that has a high impact on dropping credit scores. I want to buy baseball tickets for opening week on Saturday and by doing the math, it seems like I'll go over 30% utilization on my next statement which apparently is a factor.
So I guess my question is why do credit companies penalize you if you spend a lot on a credit card, especially if you pay it back on time in full like I've always done? They always say that putting things on a credit card and paying it back on time builds credit and I am doing exactly that. I know this is a really stupid thing to be nervous about but as a young adult who wants to be able to qualify for loans and all that I want to know what effective tips I can use to make sure this doesn't happen. Any help, tips, or advice would be greatly appreciated!
Submitted March 30, 2023 at 01:00AM by New-Row7111 https://ift.tt/wypkheS
