Credit Card Utilization and Credit score

[quizzert]

I have 2 cards

Card 1 has higher credit limit - say 10K and is the oldest card but very less benefits

Card 2 has a lower credit limit - say 5 K but very good cash back and benefits

I use card 2 maximum like 1000-1500 and card 1 minimally say 200-300.

Is the utilization taken in total as (1500+300)/15000 or is it calucluated individually like 1500/5000 and 300/10000?

Based on the response I get, I will have one more question.

Thanks

[LS2982]

---

@quizzert wrote:

I have 2 cards

Card 1 has higher credit limit - say 10K and is the oldest card but very less benefits

Card 2 has a lower credit limit - say 5 K but very good cash back and benefits

I use card 2 maximum like 1000-1500 and card 1 minimally say 200-300.

Is the utilization taken in total as (1500+300)/15000 or is it calucluated individually like 1500/5000 and 300/10000?

Based on the response I get, I will have one more question.

Thanks

---

This.

[Walt_K]

---

@LS2982 wrote:

---

@quizzert wrote:

I have 2 cards

Card 1 has higher credit limit - say 10K and is the oldest card but very less benefits

Card 2 has a lower credit limit - say 5 K but very good cash back and benefits

I use card 2 maximum like 1000-1500 and card 1 minimally say 200-300.

Is the utilization taken in total as (1500+300)/15000 or is it calucluated individually like 1500/5000 and 300/10000?

Based on the response I get, I will have one more question.

Thanks

---

This.

---

Actually, it's a mixture.  FICO scores you both on overall utilization and on individual utilization.  Your overall utilization would be total balance divided by total CL.  But FICO will also score you based on how many cards are carrying a balance and it will consider, for example, whether any one card is at a high level of utilization or maxed out.

[quizzert]

Thanks to both for your response.

Is it a good idea then to make a payment on credit card 2 before the statement is generated?

The statement will be like 800/5000 on credit card 2 instead of current 1500/5000.

Will this improve my FICO score?

[Guava]

---

@quizzert wrote:

Thanks to both for your response.

Is it a good idea then to make a payment on credit card 2 before the statement is generated?

The statement will be like 800/5000 on credit card 2 instead of current 1500/5000.

Will this improve my FICO score?

---

Lowering your balance ergo utilization is always a good thing. But your Fico scores depends on many other things and they are weaved into the formula in such a mysterious and probably complex manner that it's hard to tell how it'll affect your score. Many people have found it's best for their scores to have util at around 9%, some at 5%. I think it's safe to say that the lower the better. It's kinda a shade of gray.

In the end, go with the route that save you the most money, try to avoid carrying balance is the ideal obviously (but you can control the balance reporting however), and eventually that will get you where to want to be in term of scores.

[Anonymous]

---

@quizzert wrote:

Thanks to both for your response.

Is it a good idea then to make a payment on credit card 2 before the statement is generated?

The statement will be like 800/5000 on credit card 2 instead of current 1500/5000.

Will this improve my FICO score?

---

To be honest it will increase your score by at least a few points since your UTL would go from $1,800/$15,000 (12%) to $1,100/$15,000 (7%) 

Either way you are doing great with UTL and if you are considering to apply for some PRIME cards in the near future once you reach your FICO score goal you won't have an issue being approved.

If you want to increase your chances of being approved for some PRIME cards in the next 6-12 months sign up for some local/regional/national Credit Unions and apply for their credit cards. 

Not only will you build more available credit while raising your credit score, the most important factor is you will be building a long term relationship with the CU and when you want to apply for a perosonal loan or even a house you would a high success rate of approval with favorable rates.

I believe Credit Unions are the #1 choice for credit and will supersede Banks over the next 5 years

[boomhower]

Unless you  are planning on applying for something don't even worry about.  With the high UT at 30% on the one card it's not enough to make a dramatic difference.  When you are going to apply for something then go ahead and make the adjustments for a max score but otherwise your worrying yourself over nothing.