How to keep 9% utilization ?

[red259]

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@Eduardo wrote:

Sorry for my stupidity but I am still confused(

If I have 10 cards with the same limit and only one will report 1-9% utilization the total utilization will always be less than 1%. And FICO doesn't like <1%. How can it be the best strategy then?

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Say you want a credit utilization of 1% (or whatever number you want). You want to get your overall utilization to be 1%, so 1% of the total available credit across all your cards. You don't need to have your total utilization be 1% and the one card you are showing a balance on to also be 1%. This isn't even possible if you have ten cards. You just don't want the one card that your using to show a balance to be maxed out. So if you use up tp 15% of your credit line on one card to make 1% of overall utilization that's fine. 

[takeshi74]

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@Eduardo wrote:

Sorry for my stupidity but I am still confused(

If I have 10 cards with the same limit and only one will report 1-9% utilization the total utilization will always be less than 1%. And FICO doesn't like <1%. How can it be the best strategy then?

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Keep in mind that these are just guidelines.  We don't know FICO's exact algorithm.  You'd really have to monitor your scores and do quite of bit of testing over a period of time to see if <1% is really all that detrimental to your scores.  As mentioned above, the real takeaway from these guidelines is to consider individual utilization as well as total utilization as maxed out cards are detrimental.

Have you checked your scores for how you're currently using your cards?

[navyox]

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@Eduardo wrote:

Sorry for my stupidity but I am still confused(

If I have 10 cards with the same limit and only one will report 1-9% utilization the total utilization will always be less than 1%. And FICO doesn't like <1%. How can it be the best strategy then?

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So let's say you have 10 cards with $5000 limits. Cards 1-9 have 0% utilization.   Card 10 has $50 balance reported (1%), so your overall utilization would be 0.01%.    Your concern is that this would result in less than 1% overall utilization? 

My understanding is that this would get rounded up to 1%.   But even if that isn't the case, the right answer would never be go buy a flatscreen to make sure your utilization is at "sweet spot".

E: Not saying you would do that, but just want to make it absolutely clear that spending for utilization is never good.

[Walt_K]

+1.  There is no <1%.  Utilization always rounds up.  Any reported balance is at least 1% for utilization purposes.  

[parakleet]

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@navyox wrote:

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@Eduardo wrote:

Sorry for my stupidity but I am still confused(

If I have 10 cards with the same limit and only one will report 1-9% utilization the total utilization will always be less than 1%. And FICO doesn't like <1%. How can it be the best strategy then?

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So let's say you have 10 cards with $5000 limits. Cards 1-9 have 0% utilization.   Card 10 has $50 balance reported (1%), so your overall utilization would be 0.01%.    Your concern is that this would result in less than 1% overall utilization? 

My understanding is that this would get rounded up to 1%.   But even if that isn't the case, the right answer would never be go buy a flatscreen to make sure your utilization is at "sweet spot".

E: Not saying you would do that, but just want to make it absolutely clear that spending for utilization is never good.

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Good advice.