Utilization Rules, Redux

[Anonymous]

Okay, one more time to make sure I've got this straight. What I think I've learned over the last few months is:

-At least half of your tradelines should have a $0 balance. This includes installment.
-Conversely, less than half of you tradelines should have a positive balance. This includes installment.
-Keep overall revolving balances under 10% of your total available credit. This does not include installment.
-Keep all cards with balances under 10% for that card. This does not include installment.

So in my case, the picture looks like this:
Auto Installment: $7K
Amex Green charge card: $0 balance, no limit
BofA Accolades card: $0 balance, $30K limit
BofA World MC card: $0 balance, maybe a $21K limit, maybe no limit (this was a product change and hasn't reported yet, so no idea how it will report)
BofA Visa Signature: $400 balance, $20K limit (not reported), highest reported past balance was about $8K

If I'm doing this correctly:

4 tradelines
2 tradelines at $0, 2 with balances = good
Over all utilization under 10% = good
Utilization on card with balance = 5% of reported past balance = good

Did I calculate this right, or did I miss something?

Thanks!

[Anonymous]

Looks good to me, except for a couple of minor points:  The general consensus is that it's best to have a balance on less than half of all open accounts.  That means that your...

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watchnerd wrote:

4 tradelines
2 tradelines at $0, 2 with balances = good

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...is not quite ideal, since 2/4 is not less than half.

Also, when you say "less than 10%" for revolving utilization (both overall and on individual cards), keep in mind that FICO rounds up.  So to achieve "less than 10%", you really need 1-9%, which is the advice you see repeated so often on these forums.

Nice work!

Message Edited by cheddar on 04-12-2008 08:42 PM

[Anonymous]

Sorry, my bad. 4 credit cards, 5 trade lines.

2/5 report a balance.

Does that change things?

Message Edited by watchnerd on 04-12-2008 09:42 PM

[haulingthescoreup]

yep, that (2/5) makes it work!

Congrats, this can be maddeningly difficult to do with few cards. Having just the one installment does help.

[Anonymous]

Okay, I've shuffled some things around.

I've added a Citi Diamond Preferred MC to the mix.

I've moved some of the credit from the BofA Visa Signature to elsewhere, as the $20K CL was wasted, in some respects, due to the fact that it wasn't reporting.

The mix now looks like this:

Auto Installment: $7K
Amex Green charge card: $0 balance, no preset limit
BofA Accolades card: $180 balance, $30K limit
BofA World MC card: $0 balance, $30K limit
BofA Visa Signature: $400 balance, $11K limit (not reported), highest reported past balance was about $8K
Citi Diamond Preferred MC, $0 balance, $6.4K limit

6 tradelines, including auto
3/6 reporting balances
Revolving utilization = .008

Is that better?

Is there any point in adding another TL to the mix?

Message Edited by watchnerd on 04-19-2008 01:12 PM

[athensguy]

I thought the rule was half or fewer overall accounts showing a balance and less than half of revolving showing a balance with less than 9% uti on revolving and any non-mortgage installment accounts having been paid down by at least 35%.

[Anonymous]

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@erchambers wrote:
I thought the rule was half or fewer overall accounts showing a balance and less than half of revolving showing a balance with less than 9% uti on revolving and any non-mortgage installment accounts having been paid down by at least 35%.

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Except for the installment portion, I thought I was meeting those criteria?

[islandchild82]

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watchnerd wrote:

6 tradelines, including auto
3/6 reporting balances
Revolving utilization = .008

Is that better?

Is there any point in adding another TL to the mix?

Message Edited by watchnerd on 04-19-2008 01:12 PM

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As Cheddar stated above, less than half of the TLs should be showing balances. So, wouldn't 2/6 be better since you are at half now with 3/6?

[haulingthescoreup]

My understanding of the half versus fewer-than-half question (confirmed by snotty comments from TU on my reports is:

Half or fewer of all TL's with balances. This includes mortgages, loans, CC's, everything.

Fewer than half of revolving accounts. This includes CC's and unsecured lines of credit.

So for OP, that's six total TL's, 3 with balances; OK there.

3 reporting CC's, one with a balance; OK there, IF the Signature doesn't factor in.

If the Signature card is factored in (unfairly), then there's 2 of 4, which is half, not fewer than half.

About all you can do on this one is let everything update and pull the scores, especially TU, which seems particularly picky and obsessed on this subject.

My guess is that this will be fine, and there's more to life than making TU happy.

[Anonymous]

Since the amount of money on the CC's is just a few hundred bucks and can be PIFed at any moment, let me reverse the question:

Which tradelines should I *allow* to report a balance for best results?

The installment is obviously fixed, but the rest are flexible.

The other question is: is there any point in adding any more CC's? I don't need any more credit, so doing so would purely be for score manipulation.

Message Edited by watchnerd on 04-20-2008 08:34 AM