"Number of accounts with balances"

[icyhot]

I've seen this on a couple of denial letters, mostly from Chase and Amex, so I have questions. Even if your overall UTL is in a decent range, and the balances arent that high in relation to credit liit, how many "accounts with balances" is too many? Granted, I have 3 accounts that are using over 70% of the CL, 2 of which are getting paid to zero this week, and one thats going to get large payments until its PIF. The rest of my accounts are at 0, except my QS and CSP which are under 10% UTL. My overall UTL would therefore be 7% after its all said and done. Would this be optimal conditions for applying for a new card? I'm looking at Marriott or Ritz. Maybe PRG but probably wouldn't get both at same time for bonus spend purchases.

[Anonymous]

Certainly it will help once you pay those 3 accounts down.  70% utilization on any accont, let alone 3 can be very problematic when applying for a new card.  Your scores will also go up, possibly quite a bit, once that utilization is dropped down.  What are your current scores looking like and number of inquiries?

As for your question of how many is too many.-that's difficult to tell.  Sometimes creditors will toss that one out just to conform to the FCRA

[Anonymous]

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@Anonymous wrote:

Certainly it will help once you pay those 3 accounts down.  70% utilization on any accont, let alone 3 can be very problematic when applying for a new card.  Your scores will also go up, possibly quite a bit, once that utilization is dropped down.  What are your current scores looking like and number of inquiries?

As for your question of how many is too many.-that's difficult to tell.  Sometimes creditors will toss that one out just to conform to the FCRA

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+1

[Anonymous]

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@Anonymous wrote:

As for your question of how many is too many.-that's difficult to tell.  Sometimes creditors will toss that one out just to conform to the FCRA

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Just another reason why I hate legislation that is done just for the sake of being done.

Why not just put a message:

'We declined you because your credit report did not meet our standards but we have to say something outlined by the FCRA even if it is not true so "Too Many Accounts with balances"

I mean why make legislation that requires creditors to lie. 

[RobertEG]

Utilization of revolving credit includes three factors:

1. Overall % util of all revolving accounts, combined

2. The % util of each revolving account, and

3. The number (expresses as a percent) of accounts reporting a balance.

Fair Isaac has stated that the number of accounts with balances is not as significant as % util in scoring, but it nonetheless is a factor.

It is thus not inaccurate to refer to number of accounts with a balance as a scoring or credit approval/disapproval criterion.

[icyhot]

Hopefully I'll be able to get the 3rd card at 70% to about 50%. Oh and I just got an Amazon card an financed a MacBook, the balance hasn't reported yet

[Thomas_Thumb]

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@Anonymous wrote:

Certainly it will help once you pay those 3 accounts down.  70% utilization on any accont, let alone 3 can be very problematic when applying for a new card.  Your scores will also go up, possibly quite a bit, once that utilization is dropped down.  What are your current scores looking like and number of inquiries?

As for your question of how many is too many.-that's difficult to tell.  Sometimes creditors will toss that one out just to conform to the FCRA

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+1

Wording on reason statements is pre-defined. Not sure if you really have too many accounts reporting a balance - but you have too many accounts rerporting a high utilization (70%). I don't think there is a specific statement for # accounts with high utilization and your overall utilization is not excessive. Perhaps the statement you were given is the closest match to your situation.

[takeshi74]

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@icyhot wrote:

I've seen this on a couple of denial letters, mostly from Chase and Amex, so I have questions. Even if your overall UTL is in a decent range, and the balances arent that high in relation to credit liit, how many "accounts with balances" is too many?

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Revolving utilization does have a significant factor but it is not the only thing that matters.  Your entire credit profile always matters and reasons are in relation to your credit profile.  I, for example, have about 8/12 cards reporting balanced and "number of accounts with balances" is never cited as a reason for me but my credit profile is probably more established and/or in better shape.  My FICO 8's are all in the low 800's.  I could probably squeeze out some more points if I had fewer balances reporting but it's not worth the hassle to me.  For your profile, however, the number of balances are a concern.  There are probably other bigger concerns as well that are not as clearly indicated by the reasons cited.

Don't assume that there's a fixed line that is "too many" or "too much" for everyone.  Again, one's credit profile will determine these things.

Inquiries are another example of this.  X inquiries can be too many for one and not a concern for another depending on credit profile.

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@icyhot wrote:

Granted, I have 3 accounts that are using over 70% of the CL

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It's not just overall revolving utilization that matters.  Individual does as well.  70% is very high.

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@icyhot wrote:

Would this be optimal conditions for applying for a new card?

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Again, it's not just revolving utilization.  Optimal is when your credit profile is in best possible shape.  All we can say is get overall revolving utilization and individual revolving utilization as low as possible.  You may want only one balance to report.  Definitely no derogs.  Your recent credit seeking activity matters as well.  You'd really have to do some testing to determine what's optimal for your profile.  We can't tell you that X% and Y balances is optimal specifically for you.  We can just provide some guidelines based on aggregated anecdotal evidence which is where the "one balance reporting at 10% or less" comes from.

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@icyhot wrote:

Maybe PRG but probably wouldn't get both at same time for bonus spend purchases.

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Are you running the numbers for your spend and considering how redemption methods you can use would impact rewards value for program like MR?  Do you have enough spend for both UR and MR?  Just one of them typically requires a large amount of spend.  Consider everything through the entire process from earning points through redemption and how long it takes you to accrue enough to redeem.

If you just want to churn for bonuses and long term benefit doesn't matter that's fine but from what you've provided it doesn't sound like you have the profile for chrurning.