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Moderator Emeritus
beamMEup
Posts: 4,473
Registered: ‎12-31-2008

Re: CC util FICO thresholds?

Seems like any actions toward paying down to a low utilization will yield points - this may be the easiest way to manipulate points quickly.  Plus, it feels darn good.

 

tx - Are you talking overall utility or individual card utility?

Case in point:  DH reported balance on one card only.  Then he paid the reported balance down from 24% to 5% with no score effect.  (Overall utility 6% down to 1%.)  So, I guess, YMMV.  This is in a clean bucket.

 

I'm still a big fan of reporting one card at a low utility - but I'm glad to see you only get dinged a few points for reporting them all at 0.  That's probably easiest for me unless I'm fine tuning for some big event (don't know what that would be at this point).  I do know, however, if you let them all report at 0 for a length of time, you can get dinged for no recent activity.

 

And a definite +1 to JimB's post.

Just puttin' syrup on something, don't make it pancakes.
Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009

Re: CC util FICO thresholds?

Factors that may mitigate the impact of UTIL reduction:

  • Clean scoring bucket
  • Very high length of history/AAoA factor

 

You already get a pretty good boost for falling in these categories and reducing/increasing UTIL may have less of an influence with FICO. Higher UTIL is always bad with issuers!

Frequent Contributor
Karatz
Posts: 318
Registered: ‎09-25-2008

Re: CC util FICO thresholds?


txjohn wrote:

The "threshholds" that I have noticed differences (in score) are:

70% 

50%

35%

30%

20%

11%

9%

7%

0% (resulting in a few point loss)

 

Of course these percentages are also affected by the number of balances resulting in that percentage and in specific cards potentially being maxed or close to maxed out (individual percentages vs. overall percentages).

 

Therefore, the snowball (low balance card) pay off plan can result in quicker score gains because you reduce the number of accounts more quickly while you pay the overall percentages down.  This may result in a bit more interest though because your low balance cards may not be your highest APR. 

 

 


I saw a thread somewhere else, and it was mentioned repeatedly, that >74.99% is the place you don't want to be. I have one card, which with this current paycheck, I  will get under that threshhold. I may just attempt to get it to, say, 71% so that interest added does not put me over 74.99% - just to test this.

 

Of course, nobody here mentioned 100%:smileysurprised: 

TransUnion/Equifax
746/754
Date: 9/24/2009/10/02/2009
Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009

Re: CC util FICO thresholds?

Or > 100%!!

 

(ew)

Regular Contributor
spiritcraft1
Posts: 163
Registered: ‎08-15-2008

Re: CC util FICO thresholds?

Can someone define clean and dirty scoring buckets?

 

 

11/6/09 TU 724 / EX 739 (FICO from CU) / EQ 701
Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009

Re: CC util FICO thresholds?


spiritcraft1 wrote:

 

Can someone define clean and dirty scoring buckets?


Borrowing a post from the esteemed HTSU


haulingthescoreup wrote:

We do a lot of sniffing around with these things, and we think we figure something out. We strut proudly around for a couple of months, until we see something that blows all our guesses right out of the water.

We do know that there are 2 negative and 8 positive buckets.

My latest guesses: there's a negative bucket for a serious derog OR a public record, and a negative bucket for a serious derog AND a public record. Serious derog = CA, CO, 120-day, 90-day, 60-day less than 2 years. (The others count for the whole time they're on the reports.) Public record = BK, judgment, tax lien. (OK, what am I forgetting...)

Regular Contributor
Nonaii
Posts: 246
Registered: ‎06-02-2008

Re: CC util FICO thresholds?


JimB wrote:

jausanka wrote:

 

We have roughly $1k per month dedicated to paying down this debt, and we will have approximately $4k-$5k as a tax return dedicated to a lump sum payment in March.

 


Such a large tax refund suggests that your withholding is greater than it should be. Free up money now by filing a new W4 to reduce your withholding, & then apply that extra cash to your CC balances. Don't wait another 4 to 5 months.

 

You're lending the government money at 0% interest while paying double-digit rates to your creditors. That spread doesn't work to your advantage.

 

(FWIW, I try to manage my withholding so that I get back nothing when I file my return, although I don't mind having to pay a few hundred.)


 

good advice.

Frequent Contributor
jausanka
Posts: 483
Registered: ‎05-06-2009

Re: CC util FICO thresholds?

I'm all over it...

 

I use my tax return as a savings account.  I understand that I am giving the government a tax-free loan, but 0.25% on a couple thousand dollars for a couple months isn't that big a deal to me, especially since I am just now learning restraint with free cash flow.  At this point, now that we have consolidated some things and we have our goals set, it makes sense to maximize my paychecks rather than wait for a lump sum in the spring.

 

Felt very weird adjusting my W4 from 0 (plus $400 a month additional withholding) to 17 exemptions (single, no kids) for the rest of the year! 

Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009

Re: CC util FICO thresholds?


jausanka wrote:

I'm all over it...

 

I use my tax return as a savings account.  I understand that I am giving the government a tax-free loan, but 0.25% on a couple thousand dollars for a couple months isn't that big a deal to me, especially since I am just now learning restraint with free cash flow.  At this point, now that we have consolidated some things and we have our goals set, it makes sense to maximize my paychecks rather than wait for a lump sum in the spring.

 

Felt very weird adjusting my W4 from 0 (plus $400 a month additional withholding) to 17 exemptions (single, no kids) for the rest of the year! 


Just be aware of the fact that the IRS can compel you to explain taking more that 9 exemptions, I doubt it will come up, but it could.

Super Contributor
DI
Posts: 5,767
Registered: ‎01-28-2008

Re: CC util FICO thresholds?

If your revolving utilization stays under 10% you'll continue to earn almost all of the credit score points available in this category. As that percentage goes higher, your score will go lower. It's a common myth that you only need to keep your revolving utilization 50%. That's absolutely incorrect. 50% is better than 60% but not as good as 40% or 1%.

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