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you lose 1 point for every percent of your credit limit that you use.

Established Contributor

you lose 1 point for every percent of your credit limit that you use.

Can anyone validate this claim? I got it from CNN.com
http://money.cnn.com/galleries/2007/pf/0705/gallery.credit_score/index.html

There is talk here about keeping utilization between 1 and 9 percent. Would it be ideal then to keep balances most like 1-2% utilization?

It seems like you get the max points for having the absolute lowest utilization possible, and every point you add subtracts one point from the possible points you can earn in a month.

That also brings me to another question, which is how many points is your Fico Likely to earn per month if your utilization stays 5% or below vs 10% and below if you have no lates or anything else?
Message 1 of 8
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Established Contributor

Re: you lose 1 point for every percent of your credit limit that you use.

bump
Message 2 of 8
Moderator Emeritus

Re: you lose 1 point for every percent of your credit limit that you use.



rifleman wrote:
Can anyone validate this claim? I got it from CNN.com
http://money.cnn.com/galleries/2007/pf/0705/gallery.credit_score/index.html

There is talk here about keeping utilization between 1 and 9 percent. Would it be ideal then to keep balances most like 1-2% utilization?

It seems like you get the max points for having the absolute lowest utilization possible, and every point you add subtracts one point from the possible points you can earn in a month.

That also brings me to another question, which is how many points is your Fico Likely to earn per month if your utilization stays 5% or below vs 10% and below if you have no lates or anything else?

Yes, 1-9% is good but would 1-2% be better, I'm not sure. Maybe! No telling how many points though. FICO does not have a score for historical untilization%'s. What matters is your utilization% at the moment the score/report is pulled.
Message 3 of 8
Established Contributor

Re: you lose 1 point for every percent of your credit limit that you use.

As far as I know, the "1 point for each percent" statement is untrue. Those who have graphed their FICO scores report that score changes tend to happen at certain utilization index points (10%, 30%, 50%, etc.). I haven't seen any confirmation that utilization changes "in between" (such as paying down from 29% to 22% utilization) have any effect on scores. Plus, if inquiries and new accounts are added in order to decrease utilization, the benefit of the utilization decrease will be diluted. I think the CNN story was just trying to create an oversimplified guideline.

Message Edited by Revike on 07-31-2007 12:16 PM
Message 4 of 8
Valued Contributor

Re: you lose 1 point for every percent of your credit limit that you use.

I'd say one point per percent of utilization is a good ballpark estimate, once you go over 9%.  Your actual point gain or loss will vary based on the rest of your credit report, overall age of credit accounts, on-time performance, and African swallow migratory patterns.
- - - -
in a credit-scoring postnuclear Stone Age...
Message 5 of 8
Moderator Emeritus

Re: you lose 1 point for every percent of your credit limit that you use.



TheNewWorldMan wrote:
 
 African swallow migratory patterns.


Ohhhh boy, you're at it again!Smiley Tongue
Message 6 of 8
Regular Contributor

Re: you lose 1 point for every percent of your credit limit that you use.



TheNewWorldMan wrote:
, and African swallow migratory patterns.


 

(start really bad Monty Python voice)

 

'ere mate, ow's e able ta hold is FICO scores an a coconut husk in is little claws?
 
(end voice over)


Message Edited by KevKaos on 07-31-2007 12:59 PM
Message 7 of 8
Highlighted
Super Contributor

Re: you lose 1 point for every percent of your credit limit that you use.



KevKaos wrote:


TheNewWorldMan wrote:
, and African swallow migratory patterns.


 

(start really bad Monty Python voice)

 

'ere mate, ow's e able ta hold is FICO scores an a coconut husk in is little claws?
 
(end voice over)


Message Edited by KevKaos on 07-31-2007 12:59 PM

Not bad, not bad.  And that from someone who saw the first ever broadcast of a Python show with one of the Mrs. Pythons   Smiley Very Happy
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Message 8 of 8