What is the Recommended amount of use on Credit cards?

[myjourney]

---

@Themanwhocan wrote:

---

@Anonymous wrote:

---

@Themanwhocan wrote:

---

@HiLine wrote:

Can we all agree that 1% is definitely better than 10%? The lower while not zero, the better. The 10% rule is an urban myth (I would love to be proved wrong on this).

---

Not necesarilly. I recall someone on another credit card blog, who claimed he tested it out and for him, leaving about 3-4% on one card was better than 1% or 10%, etc. 

But the problem is, we don't know what Bucket he is in. We don't know what other factors might modify it. If you have no "prime bankcard accounts", then is 1% utilization best, versis someone with 3 Prime bankcard accounts (defined as 10K or greater credit limits) maybe 5% is best? Does the optimal usage depend on how many inquiries you have, or if the card showing the utilization is from a sub-prime company?

I think that once your one card is below 10%, that even though I expect there to be variance in how much the actual value affects your Fico score, the amount of variance is going to be relatively slight. But we just don't know. People with long credit histories and thus very high fico scores, have more to lose from minor dings. People with very short histories also see high impacts from minor dings to their credit. So, do we say that certain factors start out impacting your score a lot... then not so much... then start impacting it a lot again? And if so, how in the world do we quantify that?

I think we can all agree... to disagree.

---

You are saying this like is some impossible thing to test.  Today, with all the proliferation of free and cheap FICO scores, you can test different scenarios.  I did it, and in three months concluded that 1% reporting on one card was best.  Do it yourself!  It's not complicated.  It just takes a little discipline and a few months later, you will know what to do to maximize YOUR SCORE for decades to come, or until they alter the present algorithm.

---

I'm saying it like it is an impossible thing to advise others on. I do not know for certain if 1% is better than 3% for me. And If I do make that determination for myself, I cannot be certain that calculation will still be valid for me in another 6 months when my AAoA passes some arbirary multiple of 2 years or whatever. And I certainly can't be sure that my calculation holds true for those new to credit, or those with very low FICO scores due to various types of baddies, etc, etc.

By the way, have you tested your 1% calculation on FICO 04, FICO 08 and the new FICO 9 algorithms? Does it hold true for fico scores generated for morgages, and car loans, and student loans? And was each test done using the same average age of accounts, and same credit report age?

Hey, I think what you are saying makes logical sense. But I just have no way of proving it. I could prove that 1% was best for me, but not if it will still be in the near future.

---

+1

Let me weigh in on this from my results stretched over (2) 6 month periods 

Each persons file,/TL/scores/CR's are different thus so are the results ....what I call the sweet spot in UTL

For me before my last spree my sweet spot was 3% for best results and tried everything from 1-9%

The spree before that 5% for best results 

No two people or files are the same 1% may work for you but it certainly won't work for all 

[Anonymous]

---

@sedric7979 wrote:

you do not need to leave 1 to 3% on each credit card , but leave something on all four credit cards. To get the myfico high score, have between 1 to 4% Utilization balance reported to the credit bureau. I have 4 credit card and one loan account . what i do each months i add up all my card limit together. Say that each of my 4 credit card have 2,500 credit limit. I multiply 4 by 2,500 = 10,000.00 dollars so now my overall limit is 10,000 dollars, now i say 1% of 10,000 = 100 dollars , or 2% of 10,000 =200 dollars. Final step now. Of that two 2% what going to reported as a balance, divide 200 by 4 = 25.00 dollars, that's what you going to leave on each credit card, now you have all credit card have a balance on it and now you using 1 to 2%. If you leaving 1% do the same thing. The Credit Bureau add up your overall total credit limit and your overall total Debt or Utilization. to your questions NO.    MO5751

---

I like your rationale but thatis like waaay too much work. I use Credit Karma to figure out the Util rate. I update all alances and verify the util [ercentages - then make a move to pay in advance or let the balance ride.

[HiLine]

If there is a counterexample to the rule that less is better, I would love to see it. Keep in mind that utilization for each card matters more than overall utilization. It is possible for a 1% overall utilization to score lower than a 3% overall utilization if the one card with a balance has a low limit and hence high utilization.

[HiLine]

And thanks to those that shared their experiences. I monitored my score also, the EQ Fico 04, to confirm the rule that less is better.

[elegia]

Personally, I have not seen much/if any difference between letting one card report 1% overall (still <10% for the individual card) and letting two or three cards report 1% overall  utilization. As people have noted, though, YMMV depending on your credit profile. I have a relatively thin history, so any changes to my credit report tend to have a fairly significant impact, but it also makes it pretty easy to track score fluctuations.

I have noticed that 1-5% IS slightly better than 6-10%, but anything under 1% is much worse.

[CreditDunce]

---

@HiLine wrote:
If there is a counterexample to the rule that less is better, I would love to see it. Keep in mind that utilization for each card matters more than overall utilization. It is possible for a 1% overall utilization to score lower than a 3% overall utilization if the one card with a balance has a low limit and hence high utilization.

---

Not sure this is what you are looking for... 

Last month DCU said my EQ-04 score was 804.  1 CC reporting a balance of 0.1% and one reporting a balance of 22%.  Overall utilization was 3%.

The only changes from last month are:

1) Accounts aged 1 month - no major milestones, though.  I have 4 new CC's that will be 6 months old next week.

2) Minor CLI on one CC

3) CC reporting 22% is now reporting $0.   Overall utilization is now < 0.01%.

DCU says my EQ-04 score is now 802.

In my case lower utilization gives me a lower EQ-04 score.  I am hoping Barclay's updates my TU-08 score soon.  I don't know if it will go up or down. 

The numbers may be a little lower, but for all practical purposes 802 and 804 are the same.