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Question about 30% limit on credit card

New Member

Question about 30% limit on credit card

I've heard that you can use up to 30% of your credit before your credit score starts dropping.  Is this 30% talking about per credit card or TOTAL credit limit?  I'm currently using about 11% of my total credit but a majority of that is from one credit card (that is 0% interest and maxed out) that will be paid in full before the offer ends and the interest is accrued.  I want to know if it's hurting my credit score that I have a "maxed out" credit card, even though I am only using 11% of my total credit card limit.  If it is, then I will pay it off as soon as possible as I'm trying to raise my credit score so I can get approved for a mortgage loan within the next year.  Thanks in advance.

Message 1 of 11
10 REPLIES
Moderator Emeritus

Re: Question about 30% limit on credit card


felixgun wrote:

I've heard that you can use up to 30% of your credit before your credit score starts dropping.  Is this 30% talking about per credit card or TOTAL credit limit?  I'm currently using about 11% of my total credit but a majority of that is from one credit card (that is 0% interest and maxed out) that will be paid in full before the offer ends and the interest is accrued.  I want to know if it's hurting my credit score that I have a "maxed out" credit card, even though I am only using 11% of my total credit card limit.  If it is, then I will pay it off as soon as possible as I'm trying to raise my credit score so I can get approved for a mortgage loan within the next year.  Thanks in advance.


Welcome!

 

If you were to track util out over time, you'll find that your scores will start dropping at 10% and onwards. YMMV of course on your credit and credit profile. 

 

Even if overall util is low, a maxed out CC provides an extra score ding per FICO. FICO looks at individual and overall util.

Message 2 of 11
New Member

Re: Question about 30% limit on credit card

Thanks for the quick response! My score is at 699 and I'm trying to get it into the mid 700's before applying for a mortgage loan.  I figured since I was only using a low percentage of my credit limit that I would be OK but I guess I was wrong haha.  One last question, what does YMMV stand for?

Message 3 of 11
Moderator Emeritus

Re: Question about 30% limit on credit card

YMMV = Your Mileage May Vary....aka, different stroke for different folks.

 

For max FICO scoring per util, get all CCs but one to report $0, and get the remaining CC to report a balance of under 9% of the CL.

Message 4 of 11
New Member

Re: Question about 30% limit on credit card

Thanks for the advice! So basically I need one card to be < $2880 (CL is $32000) and all other cards at $0 and my credit score will go up?

Message 5 of 11
Frequent Contributor

Re: Question about 30% limit on credit card

I think he means the one card that reports should be <9% of THAT CARD's CL, not the sum of all your cards' CLs.



09/30/2017 - EX 811 (Credit Scorecard EX FICO® Score 8, range 300-850)
11/20/2017 - TU 842 (Discover TU FICO® Score 8, range 300-850)
10/24/2017 - EQ 845 (Citi EQ FICO® Bankcard Score 8, range 250-900)
GOAL - 800! - App free since 11/22/2017
Message 6 of 11
New Member

Re: Question about 30% limit on credit card

Ah I see thanks for the clarification... so that one card has a $2500 credit limit so I need to be < $225 on that card, and $0 on all other cards?  

Message 7 of 11
Moderator Emeritus

Re: Question about 30% limit on credit card


felixgun wrote:

Ah I see thanks for the clarification... so that one card has a $2500 credit limit so I need to be < $225 on that card, and $0 on all other cards?  


For max points. Again, YMMV. You can micromanage even further. Some have posted a point or two extra by edging that 9% down to 5% or even less. Others see no change between 5% and 10% as an example. YMMV. 

Message 8 of 11
New Member

Re: Question about 30% limit on credit card

Awesome again, thanks for the clarification.  Looks like I will be paying off that CC in full this month instead of waiting until february '13 when the 0% interest ends on it! Thanks again guys I'm glad I asked...

Message 9 of 11
Established Contributor

Re: Question about 30% limit on credit card

If you are apping for a home mortage, try to get as many accounts down to zero as possible. Allow about six weeks for that to happen due to reporting times vary with cc companies. Near or at application time, you can show proof of a canceled check/money order/cashiers check  to show the current (last statement reported balance) has been paid on all other accounts.  It makes you look more favorable in the lenders eyes.

Starting scores 01/02/2012 EQ 707(Fico) TU 733(Fico)XP 735 (FAKO)
Updated scores 05/01/17 EQ 824, TU 812 EXP 810 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience
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