Optimal Credit Card Utilization Ratio?

[RKintaudi]

Hey All,

I'm new to these forums after lurking in the weeds and reading posts by others. I'm 21 and just recently graduated from CSUF in California. Now residing in Utah.

My question is, what is an optimal credit card utilization ratio? Currently, my Experian credit score is 691 as of my last check a week ago. I'm considering doing the 3-branch thing if I can fit it into my budget. I'm nearly maxed out on my $900 CL BofA Cash Rewards card due to me having emergencies in school last semester. I would like to get it down to around about a $100 balance by the end of december. Additionally, I have a GO GE Capital card that I really didn't want to get, but I guess i'm stuck with it. Anyway, I'm hearing that 25% is a good utilization ratio if the balance is paid off every month before the statement close date. Do you guys agree? 

Lastly, when should I consider increasing my credit limit with BofA?

Thanks.

[Creditaddict]

9% on 1 card

But pay down that BofA and apply for a couple new cards with chase, citi, Amex then go to BofA for a big cli because I bet your new approvals will be much higher

[RKintaudi]

So the whole 25% total utilzation ratio was just another theory, eh? I got approved for a $3,000 CL card from RC Willey here in Utah, as I'm buying new furniture, however,  I declined that as I'd rather have more freedom to use credit with that much of a limit. Should I apply now for a newer card or wait until my BofA card is down to 9% of the balance?

[coldnmn]

Welcome to the forum unfortunately if you took a hp on your credit for RC Willy it hurt your credit score a little. You would have increased your utilization by accepting the $3000 card. Plus in the future creditors would have been more willing to extend you larger limits by showing you can handle larger limits responsibly. Follow the other posters recommendations and get your utilization < 9 % on one card for optimal score. Follow the peoples advice on this forum, most of us have been there and more then willing to pay it forward.

[Darrell82]

---

@coldnmn wrote:

Welcome to the forum unfortunately if you took a hp on your credit for RC Willy it hurt your credit score a little. You would have increased your utilization by accepting the $3000 card. Plus in the future creditors would have been more willing to extend you larger limits by showing you can handle larger limits responsibly. Follow the other posters recommendations and get your utilization < 9 % on one card for optimal score. Follow the peoples advice on this forum, most of us have been there and more then willing to pay it forward.

---

I agree with you on this as well. You already took the hit with a hard pull on your credit report for the 3k. I would go back and see if they can use that same pull and go ahead and accept that offer from them. It will def help you with the utilization and I started getting approved for higher limits ounce i had a high limit card on my report, Good Luck. Oh and yes being under 9% is a good number to stay under.

[RKintaudi]

Had I taken that credit card, I would've maxed out on my credit, something I really don't want to do since I'm close to paying off my BofA card. If I wanted to I could pay it all by this month, I'm strongly considering it actually. I'm just wondering how much it would improve my score.

[RKintaudi]

Hmm, I suppose the hard credit will show up on Monday, anyway, the reason why I'm asking about utilization is that, I do want to pay off that balance by this month, then apply for a new card at the beginning of next month. Perhaps with Discover or Capital One. I wouldn't want to have a balance such as $2993/$4400 outstanding at the end of the month. That would have been the case had I accepted that credit card.

[Darrell82]

---

@RKintaudi wrote:

Had I taken that credit card, I would've maxed out on my credit, something I really don't want to do since I'm close to paying off my BofA card. If I wanted to I could pay it all by this month, I'm strongly considering it actually. I'm just wondering how much it would improve my score.

---

Maybe take the offer now and have that trade line on your report but just not use it right now.

[RKintaudi]

So you recommend that I take the $3,000 credit card off from RC Willey Furniture and immediately max out on it? As I would be purchasing $2993 worth of furniture. That would be the case if I took the offer. I've read that the weight of credit utilization is much greater than hard inquries.

[Darrell82]

Capital one is Def a easier card to get if you are still building your credit. I would shoot for that one and hold onto that for awhile before applying for the discover. Good Luck... You would def be better off like you said in getting the regular credit card that you can use anywhere.