08-14-2012 03:43 PM
This is my first post here, hardcore Googling over the questions I'm asking led me to discovering these forums. As such, I do apologize if this is something that's been covered frequently - I'm just having a very difficult time finding answers.
I'm in the process of paying off my balances and will be going thermonuclear on them once I receive my next check, depleting the cash I have saved and hanging onto my check. I'm curious about how the credit card utilization percentage is calculated. I've always heard to keep at under 20%, but is that 20% of total balances or 20% on each individual card?
Also, I have a credit card that was closed by the lender about a year ago while I was still in college. Does the balance/limit that's left on that get weighted as part of my credit card utilization? I ask because on Credit Karma (not the most reliable source, I know) it lists as an installment account. Knowing one way or the other would help me decide which order to attack the cards.
Lastly, I tried to do the trial here to see my FICO score and see if the subscription was worth it, but it gave me an error. When I called, I was told to contact Equifax because they were apparently reporting no credit history for me, but when I called Equifax they had no problem pulling up my information. Has anyone been in a similar situation, and if so is there any advice for getting the situation resolved? Right now I can't even buy the subscription-based FICO products.
Thanks for any help!
08-14-2012 04:23 PM
Closed accounts factor into utilization only if the credit limit and balance are both still being reported. If one is missing then it doesn't count. I would definitely recommend paying your cards off in order of highest interest rate to lowest, saving money is almost always more important than a temporary score bump. If they're all the same rate, then getting them all below 20% is good, then pay them off one by one. Actually, anymore than 10% utilization on a card can hurt your score, so you could get them all below 10%, then pay them off one by one.