When Does Capital One Report Credit Utilization to Bureaus?
by Eric Volkman | Jan. 21, 2019
Naturally, the three national credit bureaus -- Experian, TransUnion, and Equifax -- don't calculate your credit score from thin air. In order to do that, they need fresh and consistently updated data from your credit issuers.
If you're a Capital One credit card holder, you might be wondering when that occurs. Like many of its fellow creditors the company reports your information on a regular basis to the three bureaus.
In this article we'll first nail down when the issuer does this, and what it reports. We'll then zoom out to look at the hows, whens, and whys of issuer reporting. Finally we'll explore what's important about your credit utilization -- and what you can do to improve it.
How often Capital One reports to credit bureaus
According to Capital One, it "typically" provides your credit information to all three bureaus once per month.
The company doesn't specify the date or dates it does this; various postings in online forums by apparent cardholders don't clarify the matter. Some commentators say Capital One reports at the end of every month, while others assert this happens several days after each statement date.
Capital One also doesn't specify in its literature what exactly it reports, saying only that it "share[s] credit card account information." Again combing through online forums and financial media, it seems the company reports your card balance to the bureaus.
Regardless, Capital One says that your credit report will show when exactly the issuer provided your data to each bureau.
The key figure the credit bureaus are interested in is that balance. Armed with this information, plus your credit limit, a bureau can determine your utilization ratio. More on this all-important ratio in a moment.
Generally, how often do issuers report to credit bureaus?
Very broadly speaking, since all issuers have a vested interest in keeping credit profiles current, they tend to report on a regular basis -- Capital One's monthly rate is not out of the ordinary.
This does not mean, however, that they do so. There is no legal mandate to report cardholder activity, and there are issuers out there that don't bother. Additionally, the issuers that report don't necessarily ape Capital One by providing data to all three credit bureaus; some might opt for only a single one, or a select pair.
There is also no law stating that an issuer has to publicly reveal this schedule, or which agency/agencies it reports to, or even whether it's reporting in the first place. That said, most issuers aren't trying to be secretive about this. A quick phone call to your issuer or brief message via their online chat service will often draw this information out of them.
So at the end of the day, there is no single reporting standard. Different issuers report at different paces, and at different times. Nevertheless there are numerous situations in which you might want to know this information, like when you're:
- About to apply for a job that requires a credit check
- Trying to get a mortgage
- Thinking about applying for a new credit card
In such instances, it's good to know when those reporting dates occur (if your issuer reports in the first place, of course). Take a few moments to contact your issuer to learn these particulars, then try to pay off goodly chunks of your debt in advance of the reporting date if you have the means. This should help raise your score when you need it to move higher.
Why credit utilization is important
The credit utilization rate is simply the amount of your available credit currently being used. So, for example, if you have the following balances and limits on a portfolio of four cards…
|Credit card||Balance||Credit limit|
…your comprehensive utilization rate would be 25% -- $6,000 divided by $24,000.
Credit utilization indicates how much room you have for more borrowing. Less than 30% to 35% (opinions differ) is generally considered good and safe; a figure above this could negatively affect your credit score.
That's because credit utilization matters, as you can see by the five main factors that go into a credit score. We've sorted them according to their weighting, most to least:
Payment history -- 35%
Utilization ratio -- 30%
Length of credit history -- 15%
New credit accounts (i.e., credit instruments you've recently acquired) -- 10%
Credit mix (the variety of your overall credit) -- 10%
Utilization is the second-most critical component of the score, next to payment history, and its weight is nearly equal.
How can I improve my credit utilization?
If your credit utilization is above that 30% to 35% band (or at any level, really, where you'd like to see it come down), there are basically three ways to lower it:
In other words, you have to improve at least one side of the credit utilization ratio. It's best if you can somehow reduce your debt -- not only will this favorably tilt the ratio, of course, it'll also make your overall finances that much healthier.
Raising your credit limit isn't a particularly daunting task. Although methods vary from issuer to issuer, a few clicks within your account management portal can usually lead you to a limit raise request. You can also typically ask for an increase via phone, or with a written request if you desire to go the old-fashioned route.
Oftentimes, your issuer will offer a credit increase in exchange for a small piece of information or two. It's common for issuers to bump the limit for cardholders that update their annual income figure, for instance.
It probably goes without saying, but we'll say it anyway -- your account needs to be in relatively good standing in order to get a limit bump. Issuers aren't going to increase their exposure to you as a lender if you haven't demonstrated you can pay your statements on time, or be disciplined about your spending.
Finally, there's method three, obtaining a new credit card. As with a limit increase, you'll need to have shown somewhat prudent debt management in the form of the utilization ratio, timely payments, etc. in order for an application to be accepted.
When going for new plastic it's best not to be too greedy. Yes, it's nice to have a lot of cards, but many applications mean many hard credit inquiries (i.e., inquiries where the issuer scrutinizes your profile to some degree). And a swarm of hard inquiries at once could ding your credit score. It's wise here to apply for one, or at most two cards for this purpose.
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