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Established Member
Posts: 14
Registered: ‎07-16-2008
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How much utilization is ideal?

[ Edited ]

We know low utilization is critical, but what is ideal utilization?

 

8% ?

 

Also, how many credit card accounts if ideal to owe money one even if its just $20 or so.


Hi Elloit0409.

 

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Posts: 909
Registered: ‎08-30-2007
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Re: How much utilization is ideal?


Elliot0409 wrote:

We know low utilization is critical, but what is ideal utilization?

 

8% ?

 

Also, how many credit card accounts if ideal to owe money one even if its just $20 or so.


Hi Elloit0409.

 

You hooked on to a thread nearly 4 years old so I moved your post to start a new thread. Hopefully more people will see it here. I only changed the title. If you want to change it to something else you can edit your post. To do so go to the post. To the right you'll see "Options." Click on "Options" and select "Edit Message" from the drop-down menu. If you need any help with anything, let me know.

--MarineVietVet, myFICO moderator

 

 


Ideal util. for Fico scoring purposes would be 1-9%, with less than 50% of revolving accounts reporting a balance.  So if you have 3 credit cards, you could only report a balance on one of them.  If you had four, reporting on two of them would still be 50% ,not less than 50%., so still letting only one of them report a balance, and only less than 9% of the available credit limit to be safe.


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Moderator Emerita
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Registered: ‎04-01-2007
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Re: How much utilization is ideal?


guydiver wrote:

 

Ideal util. for Fico scoring purposes would be 1-9%, with less than 50% of revolving accounts reporting a balance.  So if you have 3 credit cards, you could only report a balance on one of them.  If you had four, reporting on two of them would still be 50% ,not less than 50%., so still letting only one of them report a balance, and only less than 9% of the available credit limit to be safe.


And even more ideal that this would be only one CC reporting a balance of 1% or less, and then paying it off. This is if you want to torture the last few points off your FICO score. (It's possible that you won't see any score difference for say 5% vs under 1%, but you never know.)

 

If your scores are really high, as in 780's or more, TU "likes" seeing all CC's with $0 balances and rewards you with a score increase, but EQ knocks off points for the same thing. I usually let one report because I don't much care about my TY FICO (no TU-pullers in cards that might interest me.) <-- that's a very individual preference

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Established Member
Posts: 38
Registered: ‎06-06-2011
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Re: How much utilization is ideal?

For me, if I keep one card at less than 9% and all others reporting at zero then my TU score increases about 12 points. This has no effect on my equifax. My equifax score simulator told me if i had a zero balance my score would be where it is now, with an additional 20 points for adding 2% to one card. Well, I did this and it didn't move my equifax up at all. It stayed exactly the same.

 

So for me, one card reporting a small balance gives me extra points on TU. I also though have lower scores (mid 600s) with a BK 7 about a year and a half ago. I ran my utilitization up to 30% a few months back and my TU dropped 12 points, and my EQ dropped 20 points. I got them both back when I went back to 2% utilization. My equifax scores generally stay the same for zero balance, but TU deducts the same 12 points any month I don't have any balances posted. It will say I've "made recent use of available credit" if I have a small balance.

Established Member
Posts: 14
Registered: ‎07-16-2008
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Re: How much utilization is ideal?

I have never seen this before.  Does this mean that if someone has 11 credit cards, they can have balances on 5 of them as long as they are small low utilization balances?  Are there anything that says how many credit cards "with" balances Fico High Achievers have on average?

 

Ideal util. for Fico scoring purposes would be 1-9%, with less than 50% of revolving accounts reporting a balance.  So if you have 3 credit cards, you could only report a balance on one of them.  If you had four, reporting on two of them would still be 50% ,not less than 50%., so still letting only one of them report a balance, and only less than 9% of the available credit limit to be safe.

Valued Contributor
Posts: 1,413
Registered: ‎03-22-2012
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Re: How much utilization is ideal?

There is a thread here somewhere where a FICO high achiever with a score in the 800s did a test.

 

He has 5 CC with high limits. He pulled his score with ALL cards reporting zero then, $100 reporting on 1 card, then $100 each reporting on 2 cards, etc.

 

He found that having 1 card report $100 and all the rest of his cards reporting zero worked best for him.

 

Most people on these forums have seen similar results.


Starting Score: EQ 653 6/21/12
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Registered: ‎07-14-2009
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Re: How much utilization is ideal?


Elliot0409 wrote:

I have never seen this before.  Does this mean that if someone has 11 credit cards, they can have balances on 5 of them as long as they are small low utilization balances?  Are there anything that says how many credit cards "with" balances Fico High Achievers have on average?

 

Ideal util. for Fico scoring purposes would be 1-9%, with less than 50% of revolving accounts reporting a balance.  So if you have 3 credit cards, you could only report a balance on one of them.  If you had four, reporting on two of them would still be 50% ,not less than 50%., so still letting only one of them report a balance, and only less than 9% of the available credit limit to be safe.


Everyone's situation is different and there is no one size fits all approach to this and therefore no "ideal" number but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.




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