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Utilitization?

Established Contributor

Re: Utilitization?

J,
 
Only because I like you Smiley Very Happy
 
Utilization:  how much of your available credit on your cards you're actually using.
 
So say you have just 1 CC with a $5000cl, and you're running a balance of $2500, that 50% util.  You're using 50% of your available credit.
 
The same principle is applied if you have multiple CCs.
 
Say now you have 3
 
CL CC1 = $5000
CL CC2 = $2500
CL CC2 = $1000
 
Total available credit = $8500
 
Now if
CC1 Balance is $2500 (50% util)
CC2 Balance is $500 (20% uitl)
CC3 Balance is$100 (10% uitl)
 
You overall util is 3100/8500 or approx: 36.5% 
 
What we've learned on here is that to max out your FICO points you have to look at both your overall Util and per card Util and keep both between 1-9%.  While 30% is good util, but you seem to get the most points with 1-9%.  Which is why you'll see it suggested on here that if you can't get them all to 1-9% through payments.  Say one is high and the other is low, one option is to shuffle them around.  That's a personal decision, and would depend on what you're objectives are and how much time you have.
 
So just remember this:
 
1-9, on time, all the time!
 
Hope this helps
 
-trini
 
 
Message 11 of 27
Frequent Contributor

Re: Utilitization?



trinigal wrote:
J,
 
Only because I like you Smiley Very Happy
 
Utilization:  how much of your available credit on your cards you're actually using.
 
So say you have just 1 CC with a $5000cl, and you're running a balance of $2500, that 50% util.  You're using 50% of your available credit.
 
The same principle is applied if you have multiple CCs.
 
Say now you have 3
 
CL CC1 = $5000
CL CC2 = $2500
CL CC2 = $1000
 
Total available credit = $8500
 
Now if
CC1 Balance is $2500 (50% util)
CC2 Balance is $500 (20% uitl)
CC3 Balance is$100 (10% uitl)
 
You overall util is 3100/8500 or approx: 36.5% 
 
What we've learned on here is that to max out your FICO points you have to look at both your overall Util and per card Util and keep both between 1-9%.  While 30% is good util, but you seem to get the most points with 1-9%.  Which is why you'll see it suggested on here that if you can't get them all to 1-9% through payments.  Say one is high and the other is low, one option is to shuffle them around.  That's a personal decision, and would depend on what you're objectives are and how much time you have.
 
So just remember this:
 
1-9, on time, all the time!
 
Hope this helps
 
-trini
 
 


thanks alot that was a big help, im in the process of building my credit now so im start with the BOA secured cared and a low balance. SO say i have a $1000 limit i would want to keep the balance at about $100?

Starting Score: 643
Current Score: 657
Goal Score: 700


Take the FICO Fitness Challenge
Message 12 of 27
Established Contributor

Re: Utilitization?



jenkins wrote:

thanks alot that was a big help, im in the process of building my credit now so im start with the BOA secured cared and a low balance. SO say i have a $1000 limit i would want to keep the balance at about $100?



Yup! At about $90 actually.Smiley Very Happy
Message 13 of 27
Frequent Contributor

Re: Utilitization?

ok thanks alot im hoping this BOA card and everything else im doing will help bring my scores up ive been sitting at 541 for a long time now Smiley Sad

Starting Score: 643
Current Score: 657
Goal Score: 700


Take the FICO Fitness Challenge
Message 14 of 27
Established Contributor

Re: Utilitization?

Honey, I'm just a few points ahead of you.  Just keep plugging at it and it'll improve.  You're here now, you'll learn and it'll improve.  Everything is a process.
 
 
Message 15 of 27
Frequent Contributor

Re: Utilitization?

another question whats a good method of paying off? should u pay the min? or pay as much as i can? i was told paying it all off at once doesnt help your score as much as making smaller payments

Starting Score: 643
Current Score: 657
Goal Score: 700


Take the FICO Fitness Challenge
Message 16 of 27
Established Contributor

Re: Utilitization?



jenkins wrote:
another question whats a good method of paying off? should u pay the min? or pay as much as i can? i was told paying it all off at once doesnt help your score as much as making smaller payments


Others will have to chime in here, but that doesn't make sense to me. If FICO is a snapshot of your credit profile at the point you pull it, then how you pay down should not matter.  If in January your util was 95%, your score will reflect that picture, if in February you're down to 5% your credit score will reflect that picture. FICO doesn't take into account what was you balance the month before.
 
So my suggestion, pay as much as you can every month.  If you stay at 1-9% that's should not be so much of a problem.
 
 

 
Message 17 of 27
Frequent Contributor

Re: Utilitization?

ok thank you very much!!

Starting Score: 643
Current Score: 657
Goal Score: 700


Take the FICO Fitness Challenge
Message 18 of 27
Established Contributor

Re: Utilitization?

dang you're quick!
Message 19 of 27
Frequent Contributor

Re: Utilitization?

haha it was luck caught you as soon as you posted, and the fact im bored with nothing to do some im on these boards like an eagle lol

Starting Score: 643
Current Score: 657
Goal Score: 700


Take the FICO Fitness Challenge
Message 20 of 27