Reply
Established Contributor
snowkitty
Posts: 985
Registered: ‎09-10-2012
0

Utilization Question

[ Edited ]

All of my credit cards are in except for the Old Navy one. I am still trying to understand the utilization. I've read 10% is good but to try and not go over 30%. So is the utilization the percentage of what you owe for all revolving credit cards against the total amount of credit you have or is it per card? For example....here is where I am at..

 

 

Card               Balance         Limit 

Discover             0                1500                  

BofA                    70                 500

Amazon              70                 600

Wal-Mart           130                600

Old Navy             0                   250

 

Total                 270               3450

 

If it counts all the balance together, the balances I have now against the total credit I have leaves me under 10% utilization.....is that right?

 

Are those ok balances to close with and then pay in full? I've read that it is better to have some sort of balance to hit to show you are using the cards instead of always having a 0 blance. This is my first month and I really want to do the right thing.....thanks

 

TU Fico 714 | Sesame 742 | Credit Karma 762 | Wal-Mart FICO 734 | EX FICO 695 (1/28/13) | EQ 740 (3-21-13)

Amex Blue Sky 7.2k | Amex BCE 13.1k | Citi Diamond Preferred 10.2k | CSP 5k | Bofa Cash 9k | Boa Travel 10k | Discover More 3k | Chase SW 5k | Wal-Mart 3.3k | Amazon 5k | Old Navy Visa 5k | Shell 1200 | BP 400 | VS 1500 | Sam's Discover 8.5k | FNBO Amex 16k | Chase Freedom 1.3k | Home Depot 5k | Brylane Homes 1600 | BML 2820

App free since 12/11/13*
Established Contributor
amercnchopz34
Posts: 839
Registered: ‎10-28-2011
0

Re: Utilization Question


snowkitty wrote:

All of my credit cards are in except for the Old Navy one. I am still trying to understand the utilization. I've read 10% is good but to try and not go over 30%. So is the utilization the percentage of what you owe for all revolving credit cards against the total amount of credit you have or is it per card? For example....here is where I am at..

 

 

Card               Balance         Limit 

Discover             0                1500                  

BofA                  110                 500

Amazon              70                 600

Wal-Mart           120                600

Old Navy             0                   250

 

Total                 300                3450

 

If it counts all the balance together, the balances I have now against the total credit I have leaves me under 10% utilization.....is that right?

 

Are those ok balances to close with and then pay in full? I've read that it is better to have some sort of balance to hit to show you are using the cards instead of always having a 0 blance. This is my first month and I really want to do the right thing.....thanks

 


the object is to get all cards to zero and let the 1 card report uder 9% for the best possible fico..2 types of utilization....


Established Contributor
snowkitty
Posts: 985
Registered: ‎09-10-2012
0

Re: Utilization Question

Should I always leave the balance showing on the same card each month or take turns with all the cards?

 

Thanks

TU Fico 714 | Sesame 742 | Credit Karma 762 | Wal-Mart FICO 734 | EX FICO 695 (1/28/13) | EQ 740 (3-21-13)

Amex Blue Sky 7.2k | Amex BCE 13.1k | Citi Diamond Preferred 10.2k | CSP 5k | Bofa Cash 9k | Boa Travel 10k | Discover More 3k | Chase SW 5k | Wal-Mart 3.3k | Amazon 5k | Old Navy Visa 5k | Shell 1200 | BP 400 | VS 1500 | Sam's Discover 8.5k | FNBO Amex 16k | Chase Freedom 1.3k | Home Depot 5k | Brylane Homes 1600 | BML 2820

App free since 12/11/13*
Senior Contributor
Wolf3
Posts: 3,197
Registered: ‎01-24-2010
0

Re: Utilization Question


snowkitty wrote:

All of my credit cards are in except for the Old Navy one. I am still trying to understand the utilization. I've read 10% is good but to try and not go over 30%. So is the utilization the percentage of what you owe for all revolving credit cards against the total amount of credit you have or is it per card? For example....here is where I am at..

 

 

Card               Balance         Limit 

Discover             0                1500                  

BofA                    70                 500

Amazon              70                 600

Wal-Mart           130                600

Old Navy             0                   250

 

Total                 270               3450

 

If it counts all the balance together, the balances I have now against the total credit I have leaves me under 10% utilization.....is that right?

 

Are those ok balances to close with and then pay in full? I've read that it is better to have some sort of balance to hit to show you are using the cards instead of always having a 0 blance. This is my first month and I really want to do the right thing.....thanks

 


Utilization of the all the balances/limits together.   Although the highest utilization card is also factored in some.  It is a point in time calculation, no history involved, so it only matters when a score is pulled.   So you don't have to worry so much about the fluctuations.   

Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
0

Re: Utilization Question

I've seen people say, and somewhat observed this on my scores, that to maximize your score:

 

Have at least 2 or 3 bankcards (not store cards).

 

Keep total utilization below 10%

 

Keep each card individually under 50% (under 30% would be better)

 

Have "more than half" the cards at zero balances - but have at least one small balance reporting.  So with two, three or four cards have one reporting a balance, with 5 cards two can report balances, etc.

 

Everyone's mileage may vary, and the behavior may be different depending on where you're bucketed.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
Take the FICO Fitness Challenge
Community Leader
Valued Contributor
improvingmycredit
Posts: 1,402
Registered: ‎07-12-2011
0

Re: Utilization Question


amercnchopz34 wrote:

snowkitty wrote:

All of my credit cards are in except for the Old Navy one. I am still trying to understand the utilization. I've read 10% is good but to try and not go over 30%. So is the utilization the percentage of what you owe for all revolving credit cards against the total amount of credit you have or is it per card? For example....here is where I am at..

 

 

Card               Balance         Limit 

Discover             0                1500                  

BofA                  110                 500

Amazon              70                 600

Wal-Mart           120                600

Old Navy             0                   250

 

Total                 300                3450

 

If it counts all the balance together, the balances I have now against the total credit I have leaves me under 10% utilization.....is that right?

 

Are those ok balances to close with and then pay in full? I've read that it is better to have some sort of balance to hit to show you are using the cards instead of always having a 0 blance. This is my first month and I really want to do the right thing.....thanks

 


the object is to get all cards to zero and let the 1 card report uder 9% for the best possible fico..2 types of utilization....


hello snowkitty!

FICO takes into account both overall utilization and each individual account.  FICO also takes into account how many different cards are actually carrying a balance.  Most here have found that carrying a balance on one card of 9% nets the best results.  Also, typically this utilization is rotated through each of the cards to keep them active.  I think you should know- please don't put to much emphasis on this unless you are getting ready to app a new account or some big purchase like a house or car.  For many here it is a game to see how high they can get their score or to see what different affects of utilization can have on a score.  Me personally, I've found that I get dinged for carrying a balance on more then 2 cards.  Only a few points but I play around with it sometimes.  My best advice- don't go into to debt to maximize a FICO score and optimize your score when you are in need of the best rates.  Otherwise- use you cards as you see fit. :smileyhappy:


Starting Score: 642
Current Score: EQ 773, EX 780, TU 777 (All FICO)
Goal Score: 800+

Cards: NFCU Flagship 50K, DC 30K, BCP 28.6K, Arrival+ 25K, Citi DP 22.8K, CSP 20.5K, TotalRewards 20.5K, QuickSilver 20K

Established Contributor
snowkitty
Posts: 985
Registered: ‎09-10-2012
0

Re: Utilization Question



hello snowkitty!

FICO takes into account both overall utilization and each individual account.  FICO also takes into account how many different cards are actually carrying a balance.  Most here have found that carrying a balance on one card of 9% nets the best results.  Also, typically this utilization is rotated through each of the cards to keep them active.  I think you should know- please don't put to much emphasis on this unless you are getting ready to app a new account or some big purchase like a house or car.  For many here it is a game to see how high they can get their score or to see what different affects of utilization can have on a score.  Me personally, I've found that I get dinged for carrying a balance on more then 2 cards.  Only a few points but I play around with it sometimes.  My best advice- don't go into to debt to maximize a FICO score and optimize your score when you are in need of the best rates.  Otherwise- use you cards as you see fit. :smileyhappy:


 

Thanks for the information. I am only in the first stages of building my credit up. My last FICO score was from last week and it was 721. The only thing hitting on my credit are the new cards I just opened. I am not trying for a house/car or any other credit lines right now and I have no baddies (they dropped off long ago) So, when you say that you take a few point hit, that is just for the month correct? Say I have the balances that I have now and it takes me down 2 points and then next month, everything is at a 0 balance, then the points come back up? If that is how it works, that is fine with me until I want/need something credit wise. I still want to pay my cards off each month or almost off anyways because all the cards I have are high interest.

TU Fico 714 | Sesame 742 | Credit Karma 762 | Wal-Mart FICO 734 | EX FICO 695 (1/28/13) | EQ 740 (3-21-13)

Amex Blue Sky 7.2k | Amex BCE 13.1k | Citi Diamond Preferred 10.2k | CSP 5k | Bofa Cash 9k | Boa Travel 10k | Discover More 3k | Chase SW 5k | Wal-Mart 3.3k | Amazon 5k | Old Navy Visa 5k | Shell 1200 | BP 400 | VS 1500 | Sam's Discover 8.5k | FNBO Amex 16k | Chase Freedom 1.3k | Home Depot 5k | Brylane Homes 1600 | BML 2820

App free since 12/11/13*
Community Leader
Valued Contributor
improvingmycredit
Posts: 1,402
Registered: ‎07-12-2011
0

Re: Utilization Question

[ Edited ]

snowkitty wrote:


 

Thanks for the information. I am only in the first stages of building my credit up. My last FICO score was from last week and it was 721. The only thing hitting on my credit are the new cards I just opened. I am not trying for a house/car or any other credit lines right now and I have no baddies (they dropped off long ago) So, when you say that you take a few point hit, that is just for the month correct? Say I have the balances that I have now and it takes me down 2 points and then next month, everything is at a 0 balance, then the points come back up? If that is how it works, that is fine with me until I want/need something credit wise. I still want to pay my cards off each month or almost off anyways because all the cards I have are high interest.


Exactly!  Each month there will be variances to the score based on what is reported and you can actually play around with it alittle to see how reporting affects your score and what cards are reporting what balance... But all in all, it makes no difference if you aren't needing to maximize your score for a large purchase.  A few months before a large purchase, start tweeking your score to get the best rates, otherwise... just do it for fun because it really doesn't matter.  :smileyhappy:


Starting Score: 642
Current Score: EQ 773, EX 780, TU 777 (All FICO)
Goal Score: 800+

Cards: NFCU Flagship 50K, DC 30K, BCP 28.6K, Arrival+ 25K, Citi DP 22.8K, CSP 20.5K, TotalRewards 20.5K, QuickSilver 20K

Valued Contributor
nicholasyud
Posts: 1,737
Registered: ‎08-13-2012
0

Re: Utilization Question

Calculating Credit Utilization

 

Credit utilization is the ratio of your credit card balances to credit limits as listed on your credit report.

 

 

For example, if your balance is $300 and your credit limit is $1,000, then your credit utilization is 30%.

 

To find out your credit utilization simply divide your credit card balance by your credit limit then multiply by 100.

The lower your credit utilization, the better. That shows you're only using a small amount of the credit that's been loaned to you.

Recomme : less than 9%.


Starting Score: 560
Current Score: 748 Wishlist: CSP, Simply Cash, SPG, BOLD, INK, United MP,
Goal Score: 800


Walmart: 10k |Usaa: 8k|BCE: 13k| Amex: NSPL|Dis: 9.4k|Cap: 5.5k|CAP: 2k|CSP: 13.4k| Pen:4.5k


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}