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Contributor
Eiso
Posts: 123
Registered: ‎03-29-2009
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Credit Utilization Ratio applies to all cards combined or by each one?

Let's say I'm using...

 

1st card - $400 of $2000 credit line -20% of this card

2nd card - $1000 of 2000 credit line - 50% of this card

3rd card - $ $400 of $1000 credit line - 40%of this card

 

I'm using one of them at 50% of my credit but overall I'm only using 36%. Does that still consider that I'm using 50% of my available credit?

 

If I'm confusing anyone of you, my question really goes back to the title.

 

(I'm also wondering does auto loan or lease takes account into the credit utilization ratio over at the Auto Loan forum)

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FICO pulled by loan officer on 8/3/2009
EQ: 724
EX: 740
TU: 742
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
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Re: Credit Utilization Ratio applies to all cards combined or by each one?


Eiso wrote:

Let's say I'm using...

 

1st card - $400 of $2000 credit line -20% of this card

2nd card - $1000 of 2000 credit line - 50% of this card

3rd card - $ $400 of $1000 credit line - 40%of this card

 

I'm using one of them at 50% of my credit but overall I'm only using 36%. Does that still consider that I'm using 50% of my available credit?

 

If I'm confusing anyone of you, my question really goes back to the title.

 

(I'm also wondering does auto loan or lease takes account into the credit utilization ratio over at the Auto Loan forum)


Utilization is based on each card and overall usage across all revolving lines.

Contributor
Eiso
Posts: 123
Registered: ‎03-29-2009
0

Re: Credit Utilization Ratio applies to all cards combined or by each one?

No wonder it says one of my negative impact was that I have more than 50% debt on my revolving account. Now I get it, I thought it was overall.
-----------------------------------------------------
FICO pulled by loan officer on 8/3/2009
EQ: 724
EX: 740
TU: 742
Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007
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Re: Credit Utilization Ratio applies to all cards combined or by each one?

[ Edited ]

From what I have seen from my reports:

 

You are getting dinged for one account being at 50% IF that puts you into the next BUCKET.

 

You are getting dinged for the overall being at 36% IF that puts you into the next BUCKET.

 

Examples of "buckets" that seem to be reported are: 1-9% utilization and 80-100% utilization. I don't know where the buckets are in between 10 and 80 but there seem to be "several" but not "many". Perhaps someone has kept track of this?

 

A perfect example is when I had an $800 balance on a $12K limit card. I paid the balance but they generated a statement with $3.40 interest. ANY balance gets rounded up to the 1-9% bucket. My score didn't jump up until I paid off the $3.40 and the CC reported $0.00 balance next month.

 

Also the answer to your question of "Either" or "Or" is "Both".

Message Edited by GregB on 04-01-2009 08:03 AM
Established Contributor
YoungEntrepeneur
Posts: 586
Registered: ‎03-03-2009
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Re: Credit Utilization Ratio applies to all cards combined or by each one?

Utilization is based on all your revolving lines combined, not individually.
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Scamp
Posts: 2,791
Registered: ‎03-18-2007
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Re: Credit Utilization Ratio applies to all cards combined or by each one?


YoungEntrepeneur wrote:
Utilization is based on all your revolving lines combined, not individually.

 

When it comes to scoring, this is not the case; FICO takes into account both overall util and util on individual cards.
_____________________________________________________________________________
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02/12/09 EX: 701 / 02/08/10 EQ: 719 / 02/08/10 TU: 723

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Contributor
Eiso
Posts: 123
Registered: ‎03-29-2009
0

Re: Credit Utilization Ratio applies to all cards combined or by each one?


Scamp wrote:

YoungEntrepeneur wrote:
Utilization is based on all your revolving lines combined, not individually.

 

When it comes to scoring, this is not the case; FICO takes into account both overall util and util on individual cards.

Yea, thats why i was so surprised when I see my credit analysor, it said that I'm using over 50% of my revolving account. I immediately noticed one of my account. I originally thought it counts the overall.

-----------------------------------------------------
FICO pulled by loan officer on 8/3/2009
EQ: 724
EX: 740
TU: 742
Established Contributor
YoungEntrepeneur
Posts: 586
Registered: ‎03-03-2009
0

Re: Credit Utilization Ratio applies to all cards combined or by each one?

I didn't know that. I know for a fact that they if you have too many accounts with balances, it will lower your scores.
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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
0

Re: Credit Utilization Ratio applies to all cards combined or by each one?

[ Edited ]

GregB wrote:

From what I have seen from my reports:

 

You are getting dinged for one account being at 50% IF that puts you into the next BUCKET.

 

You are getting dinged for the overall being at 36% IF that puts you into the next BUCKET.

 

Examples of "buckets" that seem to be reported are: 1-9% utilization and 80-100% utilization. I don't know where the buckets are in between 10 and 80 but there seem to be "several" but not "many". Perhaps someone has kept track of this?

 

A perfect example is when I had an $800 balance on a $12K limit card. I paid the balance but they generated a statement with $3.40 interest. ANY balance gets rounded up to the 1-9% bucket. My score didn't jump up until I paid off the $3.40 and the CC reported $0.00 balance next month.

 

Also the answer to your question of "Either" or "Or" is "Both".



Util doesn't determine buckets. If it did, we would be getting poured in and out of buckets every time another CC updates.

Buckets are driven by presence of a serious derog or public record, presence of a serious derog AND a public record (hope I've got that right), and varying ages.

There are different tiers, for lack of a better term, for revolving util. Under 10%, 10 - 19%, 20 - 29%, 30 - 49%, 50 - 84% or so, and then above that, which equals maxed.

I wouldn't give you a nickel for the accuracy of these ranges, but it's something like that, from what we read when we compare notes. And many of us (who obviously have absolutely nothing better to do with our lives) spend way too much time figuring our own personal sweet spots, which might be 1%, 2%, etc.


caught a typo too late: I meant to type 49%, not 45%
Message Edited by haulingthescoreup on 04-03-2009 04:00 PM
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007
0

Re: Credit Utilization Ratio applies to all cards combined or by each one?

Call the utilization steps "buckets" or "tiers", I wonder what FICO calls them. I do feel that the ranges are a bit coarser than your suggestion. Or possibly the "steps" are that fine but it takes more than one "step" to change your score. Wait, that means there is no reason to have three digits in your FICO score.......... I guess we will never know reality as dictated by the FICO gods....

 

I can tell you that a few months ago my Kohl's charge went from $54 to $360 against a $1500 limit. That changed my FICO score a few points according to Scorewatch.

I recently got an alert that my Advanta went from $1692 to $6525 against a $18000 limit. The alert said "The balance on one of your accounts has increased by $4833. Your score is 734 and has not changed since March 1, 2009". I have noticed a similar pattern in the past where small changes sometimes affect scores and large changes sometimes don't. I'm tossing out the ones where the number of accounts with balances changes as that throws in another variable.

 

The score changes that I am noticing on individual CC accounts seem to be caused by 0%, 1-10%, 10-80%, 80-100% or something similar. The overall utilizations seem finer than that, of course.

 

 

Opinions?


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