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....
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.
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. 
Starting Score: 642hello 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.
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.
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.
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
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.
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