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Established Contributor
EaglesFan2006
Posts: 544
Registered: ‎01-31-2008

High util on one low limit card?

I think I asked this originally in the wrong forum...

 

Right now, my util is between 25-60% on all of my major cards.  Obviously, i'm still looking to bring that down before doing anything.  However, I also have a Target card with a 200 limit.  Right now, the balance is 179 as reported to CR.  Once those reports update, the balance will be around 75.  Regardless, is having a high util on such a small card that big of a deal in the eyes of lenders, esp the type of store card that Target is (not Visa-branded or anything).

 

In other words, would a lender still penalize you for having one low limit card "maxed out"

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $4500
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Senior Contributor
myjourney
Posts: 25,241
Registered: ‎02-07-2013

Re: High util on one low limit card?


EaglesFan2006 wrote:

I think I asked this originally in the wrong forum...

 

Right now, my util is between 25-60% on all of my major cards.  Obviously, i'm still looking to bring that down before doing anything.  However, I also have a Target card with a 200 limit.  Right now, the balance is 179 as reported to CR.  Once those reports update, the balance will be around 75.  Regardless, is having a high util on such a small card that big of a deal in the eyes of lenders, esp the type of store card that Target is (not Visa-branded or anything).

 

In other words, would a lender still penalize you for having one low limit card "maxed out"


Any cards store or credit that reports to CR's and looks maxed out have a negative effect on your scores and does not look good

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Established Contributor
EaglesFan2006
Posts: 544
Registered: ‎01-31-2008

Re: High util on one low limit card?


myjourney wrote:

EaglesFan2006 wrote:

I think I asked this originally in the wrong forum...

 

Right now, my util is between 25-60% on all of my major cards.  Obviously, i'm still looking to bring that down before doing anything.  However, I also have a Target card with a 200 limit.  Right now, the balance is 179 as reported to CR.  Once those reports update, the balance will be around 75.  Regardless, is having a high util on such a small card that big of a deal in the eyes of lenders, esp the type of store card that Target is (not Visa-branded or anything).

 

In other words, would a lender still penalize you for having one low limit card "maxed out"


Any cards store or credit that reports to CR's and looks maxed out have a negative effect on your scores and does not look good


Thanks...so many complicated things to think about

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $4500
Super Contributor
enharu
Posts: 6,889
Registered: ‎02-27-2013

Re: High util on one low limit card?

Usually any maxed out card + relatively high utilization on other card(s) will prompt a manual review. Whether any AA happens as a result of a review is a different story however.

If you have high utilization but make payments in excess of minimum (i.e 10-25% of balance), you are generally going to be okay. Otherwise just becareful with whatever you are doing because you are somewhat treading on thin ice. Best not to poke the bear for no reason.
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Established Contributor
EaglesFan2006
Posts: 544
Registered: ‎01-31-2008

Re: High util on one low limit card?


enharu wrote:
Usually any maxed out card + relatively high utilization on other card(s) will prompt a manual review. Whether any AA happens as a result of a review is a different story however.

If you have high utilization but make payments in excess of minimum (i.e 10-25% of balance), you are generally going to be okay. Otherwise just becareful with whatever you are doing because you are somewhat treading on thin ice. Best not to poke the bear for no reason.


I mean I guess I'm not overly concerned about manual reviews (knock on wood).  Barclay's bumped up up 2k and my util was higher than it is now.  I do always make decent payments though, so i guess that's what is in my favor.  Since i'm not really seeking new credit for the time being, i'm not overly worried about the number now since I have time to lower it.  Sometimes reading posts on here about "any util above 10 percent is terrible" gets my stress levels up, but I understand the point.  The lower the util the better, and mine definitely has to be lower.  I still don't think that a lousy $200 card should carry such a major impact, but then again I'm not running the scoring system.

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $4500
Super Contributor
enharu
Posts: 6,889
Registered: ‎02-27-2013

Re: High util on one low limit card?

If u are not applying for any credit, don't worry about your utilization. As long as you make payments in excess of whatever you owe chances are you will be fine even during a manual review. Lenders can see your payment amounts across all your accounts and they do factor that in. I have several cards reporting extremely high utilization (>70%) most of the time but I haven't gotten any AA. I have probably been reviewed several times, seeing the SPs they have done on my files. I always PIF though but somehow just rack up charges again before statement cuts.
JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Moderator
Revelate
Posts: 8,313
Registered: ‎12-30-2011

Re: High util on one low limit card?

[ Edited ]

enharu wrote:
If u are not applying for any credit, don't worry about your utilization. As long as you make payments in excess of whatever you owe chances are you will be fine even during a manual review. Lenders can see your payment amounts across all your accounts and they do factor that in. I have several cards reporting extremely high utilization (>70%) most of the time but I haven't gotten any AA. I have probably been reviewed several times, seeing the SPs they have done on my files. I always PIF though but somehow just rack up charges again before statement cuts.

Absolutely.  For a one-time event a maxxed out card is a non-issue.  Where lenders start worrying in my opinion is if they see that balane being carried forward over some period of time without seeing some level of "progress" at repaying the debt.

 

Even someone who has a habitually reported maxxed out card but their payment volume is enough (lenders will typically know via EX or EQ) isn't going to trigger an issue.

 

I think the bigger concern is the simple ding that FICO makes.  Maxxing out one of my cards, both at 1K limit, and at 3K limit (12 and 27% utilization respectively at the time of the high balance) wound up being 14 points off both EQ '04 and TU '08, both times.  While it doesn't matter in the short term as I'm not applying for anything, if I were, those 14 points might be make or break with some mortgage lenders  for me.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 679, EQ 8 708, TU 711, EX 702* (07/14/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Valued Contributor
maiden_girl
Posts: 2,005
Registered: ‎12-29-2011

Re: High util on one low limit card?

I wouldn't worry eitiher. Especially if you aren't planning to apply for anything right now. I had high UTL at one point too. I had a Macys card at $100 limit and I had a balance of $75 bucks. Lol.

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