It’s not as tough as you might think to improve your credit when you know how to hide credit card utilization strategically.
If you want to increase your credit score rapidly, one of the best ways to do that is to reduce the amount of total credit you owe.
This is known as credit card utilization. It makes up 30% of your overall FICO credit score, second only to payment history.
Let’s say that you have a total of 3 credit cards, and each one offers you a credit limit of $2000. Your total available credit to spend would then be $6000.
Holding an outstanding balance across all cards of $3000 would put you at 50% credit card utilization. If you can get that number down, you’ll be able to quickly increase your credit score.
Having a high credit utilization will ding your credit score, and after paying it off or increasing the amount of credit you have, you may see as much as a 30+ point increase for a substantial change in utilization.
In this post we’re going to give you 5 hacks to teach you how to hide credit card utilization. That doesn’t mean that you have to stop using your cards, but there are some things you can do to make your credit more attractive even with outstanding balances.
Let’s take a look at how to hide credit card utilization!
1. Pay Your Credit Card Bill More Often
Your credit card companies will generally report your credit card balances each month after your statement closing date. They inform the credit bureaus how much outstanding credit you have using your statement balance.
The credit bureaus then compare that to the total amount of credit you have in order to calculate credit utilization. Not all credit card companies send their data at the same time, though, so it may take a while for things to reflect the most recent billing updates.
One simple way to teach you how to hide credit card utilization is to pay more frequently. You’ll need to make sure you pay your monthly payments on time, but in addition, you can make a few small payments here and there to lower your overall credit utilization.
For example, imagine that you’ve charged up $1000 of your $2000 credit card limit. Even if you always pay in full, your credit card issuer will report your balance as $1000, which will harm your credit utilization at 50%.
Let’s say you decide that every time your credit card reaches $300, you're going to pay it off. This is a much better credit utilization rate at just 15%. Making small, frequent payments is one of the best ways on how to hide credit card utilization.
2. Pay More on Your Credit Card Payments
Another top contender for how to hide credit card utilization is to pay more every month on your payments. If you’re only making the minimum payment, it’s likely that your credit card issuer is reporting high balances, making your credit utilization rate (CUR) unfavorable.
If your CUR is over 30%, you are likely to be identified as a more risky borrower, so it’s a good idea to keep your utilization under 30% when possible. 50% is the max you should allow yourself, as anything over that will be flagged on your credit report.
When you make larger payments on your credit card, you’ll be able to have a lower credit card utilization as long as you keep your usage down and your payments consistent.
3. Ask for an Increase on Your Credit Limit
If making more frequent payments or larger payments simply isn’t possible for you at the moment, you may consider asking for a credit limit increase on existing cards. This is our third option on how to hide credit card utilization.
You won’t necessarily have paid down any of your debt, but it will appear as though you are using less of your credit. Technically, now you are.
If you get your $2000 credit card limit extended to $5000 with an outstanding balance of $1000, instead of using 50%, you’ll now be using only 20%, which is well in the clear. 20% is a favorable CUR.
This is how to hide credit card utilization in plain sight! Just be sure you don’t go crazy charging up your cards— you’ll then have a higher debt amount and also a higher CUR.
4. Open a New Credit Card
The fourth hack for how to hide credit card utilization is to open a new credit card. A new credit card will add a completely new line of credit to your limit, which increases your available credit and decreases your CUR.
It’s a simple hack to implement if you are able to qualify for a new credit card. If you already find yourself in a boat with too much credit utilization or aren’t able to obtain a new credit card, you should seek a credit repair company that can help you find a quick course of action and help build back your credit.
When looking for a credit card, keep in mind that many offer 0% APR to start. You could also find one with a 0% APR for balance transfers; you can transfer your debt from other cards to the new card, helping to save on interest in the long term.
One thing to note about opening a new credit card account is that it might ding your overall credit account age, which also factors into your credit score. The age of your credit is only 15% of your score, while the CUR is 30%, so it could be of benefit to you.
5. Get a Personal Loan to Pay off Credit Card Debt
Our final hack on how to hide credit card utilization quickly and easily is to consolidate all of your debt payments through a personal loan. You’ll be able to make fixed payments on a personal loan once a month, and taking out a personal loan can raise your credit score.
The great thing about this is that once you take out the loan, you can pay all of your credit cards, and you’ll bring your credit utilization to 0%! Woo hoo!
Keep in mind— you’ll still have to pay the monthly loan payment, and you will also need to keep your spending minimal and/or implement other hacks on this list to make sure your CUR stays at a favorable rate.
One of the worst things you can do is take out a personal loan to pay credit cards and then charge them all up again. You’ll end up in a worse spot. Debt consolidation is only effective if you pay off your debts and show restraint.
Final Thoughts: Hacks to Reduce Your Credit Utilization
So, now that you know how to hide credit card utilization using practical hacks, which one are you going to try out?
If you want to get more credit cards or loans to help you substantiate your available open credit but find yourself limited by previous credit score mistakes, it’s not too late to work with the best credit repair companies.
They can help you get started on the road to financial freedom by analyzing your credit report and offering a customized plan of action to increase your score as soon as possible. Check them out today!
You won’t regret it — having a healthy credit score is one of the best gifts you can give yourself.
And don't forget that once you know how to hide credit card utilization, you're not actually “hiding” anything! You're just using strategic action plans to keep your CUR in the right place. All of the hacks on our list are completely above board.
Do you have any tips for keeping your credit utilization low? Let us know in the comments!