Credit Card Paid in Full but Does Not Show Zero Balance

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Dear Experian,

I pay my credit cards off in full before the payment is due, yet my report shows a 60 percent utilization ratio. Why is this happening and how can I prevent this besides getting more available credit or not using my cards?


Dear RBR,

Your credit report shows the balance on your credit card at the moment it is reported by your lender. Typically that is at the end of the billing cycle and is usually the balance that appears on your monthly statement. If you used your credit card during that billing cycle your credit report will show a balance, even if you pay the balance in full after receiving your monthly statement.

Even if you have always paid it in full in the past, you are not required to do so and may choose to pay only the minimum payment this month. So, the balance reported is the amount due.

The way to have a zero balance appear in your credit report is to pay the balance in full and then not use your credit card at all during the next month. At the end of the billing cycle the lender will report a zero balance. The utilization ratio reflects the percentage of credit you were utilizing based on the balance reported by the lender when you request your report.

One option to reduce your utilization ratio is to use your cards less throughout the month. Another option might be to pay off the balances and then use them only sparingly when you know you will be applying for a loan. Or, you may make an early payment to reduce or eliminate the balance, but it must get processed before your statement is generated. Doing so will allow your creditors time to update your balances to show zero, or at least a much lower utilization ratio before you apply for new credit.

If you have a positive credit history, you may be able to open an additional credit card account or ask your current lenders to increase your credit limit. Either could make your utilization percentage decrease.

But, but having more available credit could have a negative impact if you are tempted to make more purchases. Not only would your utilization not improve, you would have a higher total debt load.

Thanks for asking.
The "Ask Experian" team