CreditSmart Questions Answered

Will Using 90% Of My Credit Limit Hurt My Score If I Pay In Full Monthly?

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Paying Your Card Multiple Times Per Month Helps Your CIBIL

Ask CreditSmartWe got a great follow up question on a recent Ask CreditSmart post:

Does credit score affect if i use 90% of my credit limit but at the same time i pay fully before due date?

– Mr Sharma


This is a great question I’m sure many people are also wondering, and unfortunately the answer is a bit complicated.  Like we said before, it’s obviously not advisable to ever use 90% of your available credit limit. However we also understand people may find themselves in situations where nearly maxing out a credit card is necessary such as growing a business, family emergencies, or perhaps just an ongoing shopping addiction 🙂

The Affect Is Noticable

Will it affect your score? Maybe – and here’s why. It all depends on when your credit card issuer sends your credit data to the credit bureaus. Some card issuers update data once a month, some update more frequently. In much the same way, the credit bureau updates your score based on the data it receives on it’s own schedule as well. It’s almost impossible to know when each will report and update data.

Because of this, lets say you reached 90% of your credit limit on August 25th, and then your credit card reported this data on the 29th. Then lets say CIBIL updated your credit profile on September 1st. CIBIL is now using that most recent data to calculate your score. If you had paid off your card before the card company reported your new utilization, then CIBIL would never have known you reached such high utilization. Unfortunately it’s silly to try and play around with this timing, as reporting and updating times are subject to change. By frequently reaching high utilization you are risking CIBIL taking a “snapshot” of your balance when it’s at it’s worst instead of it’s best. If you frequently only keep your utilization around 30%, then no matter when they take a snapshot you will be looking good.

The Good News

Fortunately, there’s a strategy you can use to your benefit here that might actually improve your score. Instead of waiting for your monthly bill to arrive and paying it all off in one shot – it’s wiser and safer for your credit score to make payments twice or more per month. If you find yourself reaching 50% utilization, log into your account online and pay off some amount. Multiple smaller payments on your card not only make you look responsible in the eyes of the issuer, but it also ensures your utilization is low.


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