Personal loan and utilization question

[fliphusker]

I made a really huge mistake two months ago and took out a balance transfer card.  I really did not need to.  My Citi double cash back card does not start charging me interest until November, but was just a way to take advantage of 0% interest and transfer rate.  The problem is now I need to put a new roof on my garage so I looked up my score on CK. Dropped from 738 to 669.  OUCH!   I took a 70 point hit because my utilization on the one card is 90%-1k limit.  My Citi is currently at 30%, 1100 with 3200 limit.  My total CC utilization is 15% and these are the only two cards I carry a balance on.  I do not pay fees. 

My big question is if I pay the 90% down, where does it need to get under, 30%, 15% or 10% for me to get my best jump?  On my Citi sitting at $1100, same question.  I just do not want to pay 15% interest when I do not have to.  And want to know where my utilization needs to be sitting on the two cards prior to them reporting next month, so I can get my loan shortly after

Thank you all for your time and advice. 

[Appleman]

90% is maxxed out. Not good for the score even if it seems good for the wallet.

There are certain utilization % that seem to improve scores, <90%, <70%, <30% and the gold standard of ONE card reporting less than 9%.

Good luck! But get that 90% down ASAP

[RonM21]

Agree. You want one card reporting a balance, and under 10%. Btw, I'm sure your score did take a hit, but find your true fico scores. CK uses something else and you don't really want to go off of that.

[fliphusker]

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@Appleman wrote:

90% is maxxed out. Not good for the score even if it seems good for the wallet.

There are certain utilization % that seem to improve scores, <90%, <70%, <30% and the gold standard of ONE card reporting less than 9%.

Good luck! But get that 90% down ASAP

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Ya, was a serious blunder on my part, that is for sure.  Another bad thing is that I figured a balance transfer would give me my Citi double cash, wrong there. 

I can pay off the 90%, just going to take some creative accounting.  Getting my Citi under 9% is going to be more difficult though.  15% is reasonable for next month or possibly August.  While you say "ONE card" I am going to assume that no other cards can show a balance, even if it is below the 9%?  Any idea of a type of hit if 3 cards were under 9%?  While I do not ever see interest charges, my Barclays will show a balance, just because of its use for groceries. 

I use CK as I know it is not a true FICO, but it also gives me a general picture and has not been that far off my FICO scores when I checked.  Also get ones from Disc., Cap One and think Chase. 

[takeshi74]

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@fliphusker wrote:

My big question is if I pay the 90% down, where does it need to get under, 30%, 15% or 10% for me to get my best jump?

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We really can't tell you that.  You'd have to monitor your scores to determine the impact.  What we can tell you is that 90% is maxed and you need to get it down ASAP.  30% is a suggested maximum but ideal is typically much lower than that.  Lower is generally better as long as you don't have all of your revolving accounts reporting 0 balances.  It's not just score that matters.  Your overall financial health matters and you want to eliminate debt.

Always make sure you consider revolving utilization -- not just for scoring purposes but for risk assessment purposes as well.  Creditors can take adverse action on risky actviity which includes things such as prolonged high utilization, maxed accounts, etc.  Next time you look at your reports note where 0% offers are indicated.

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@fliphusker wrote:

And want to know where my utilization needs to be sitting on the two cards prior to them reporting next month, so I can get my loan shortly after 

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We're not underwriting your loan and we don't have access to such details.  We can only provide general credit advice but we cannot tell you where the lines are drawn for the qualification requirements for any of your creditors and products.  You generally want revolving utilization as low as possible.  It's not an on/off switch.  Factors like revolving utilization not only determine approval but the terms that you qualify for.  If you can pay it all off then pay it all off.  It's not just the revolvinf utilization that matters.  While it has significant impact, your entire credit profile matters.

[fliphusker]

Such a funny thing about my 90% utilization.  I paid a simple $25, as not paying any interest on it, and utilization hit 88% and my score jumped 22 points.  Such a silly flawed system.  My overall utilization did not change as have 17k total credit and only 14% utiliaztion which did not change from last month to this month.  I am ok with my FICO jumping 20 points but over a $25 payment taking my balance from $923 to $898?

[Thomas_Thumb]

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fliphusker wrote:

Such a funny thing about my 90% utilization.  I paid a simple $25, as not paying any interest on it, and utilization hit 88% and my score jumped 22 points.  Such a silly flawed system.  My overall utilization did not change as have 17k total credit and only 14% utiliaztion which did not change from last month to this month.  I am ok with my FICO jumping 20 points but over a $25 payment taking my balance from $923 to $898?

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Thanks for the data point - This result is in agreement with the 90% utilization threshold for max out condition as categorized by Experian. Max out => significant score impact. It would be interested to see what would happen if you stepped down balance on this card to 78%, 68%, 48%, 28%, 18%, 8% but, that's a lot of work. 

By the way, the important factor is getting aggregate utilization below 9% and individual card utilization(s) below 30%- that's where the points are. On an individual card basis really not much difference between 9% and 29% utilization as long as aggregate is 9% or less. Test it yourself to see how your file reacts.

Not sure how many cards you have but for most profiles allowing up to 50% to report "small" balances typicaly won't impact score much (meaning less than 10 points) - again as long as aggregate is below 9% and individual cards are below 30%. As before, test to confirm how it works for you.

[fliphusker]

Actually what you discribe will happen next month, but it is going to get skewed a little bit though.  I will drop it below 60% but I will also be dropping my Citi card below 30%.  (Neither acrue interest).  I am just a bit torn on how I am going to go about this. 

Citi-$3200 limit-$1050 is what I will have total when I go to pay my bill

Chase slate-(was the 90% card) Current $713 of $1k limit.

I know I need to get Citi uner the 30% ($960 and starts acruing interest in November but not worried)

I am going to put down around $630 next month towards these two cards, just not sure what is the best way to attack the their seperate utilizations. 

Going to be applying for a HELOC next month.  Not sure if I can get another 20 point boost, but if possible would like a scenario that gives me what may be the best shot.  Taking my Citi under 30% and Slate under 30%, or another scenario?

I should have said that this is my CK scores.

Suggestions and feedback would be much appreciated.