Credit utilization calculation

[cpereyra1]

I have a fairly simple question.  As far as credit utilization goes I know that it is good practice and helpful to your score to have it below 30%.  My question is regarding how this is calculated.  Is it calculated per card or is it a calculation of all your credit available vs. credit used.  For example if I have 4 cards with a total spending limit of $6000, and I have $1800 in debt (30%).  Would it be the same as having for example $1000 on one card $300 on another two cards and $200 on the other one as having say the whole $1800 on just one card?

Thank you everyone here who has helped me improve my credit score with your knowledge!

[Jutz]

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Total revolving credit debt

Divided by

Total revolving credit line from all your reporting CC and store cards

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Example:

Credit Card1: $500 Balance, $1000 Limit

Credit Card2: $200 Balance, $500 Limit

Store Card1: $100 Balance, $500 Limit

$800 Balance Total, $2000 Limit Total = 40% UTIL

FYI, to maximize your score, pay it down to under 10%.  If you were planning on applying for new credit, pay down UTIL 2 months prior to allow time for it to report.

[cpereyra1]

awesome! thank you very much for your help, and the example.

[MikeC80]

I've read that they look at two factors and Jutz did list one of them which is a cumulative utilization %. Someone correct me if i'm wrong but I also remember reading that they also look at each card individuallly as well. If that is the case, then you want to have the exact same utilization on every revolving card you have. This should maximize the score. As far as the sweet spot, I know under 30% is good and someone listed to put them at 10%. I'm not sure which one is better, i've always used 20% as a good way to go but I would love to hear from someone else who has more experience with ideal utilization %'s.

[p-]

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@MikeC80 wrote:

I've read that they look at two factors and Jutz did list one of them which is a cumulative utilization %. Someone correct me if i'm wrong but I also remember reading that they also look at each card individuallly as well. If that is the case, then you want to have the exact same utilization on every revolving card you have. This should maximize the score. As far as the sweet spot, I know under 30% is good and someone listed to put them at 10%. I'm not sure which one is better, i've always used 20% as a good way to go but I would love to hear from someone else who has more experience with ideal utilization %'s.

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This kind of stuff is hard to pin down, but from what I've seen people seem to get their best scores when only one card has a balance, that balance is less than 10%, and the overall utilization is less than 10%.  But every situation is different.  If you really want to know, pull your fico's every month and try different utilization patterns for each month.  Then, let us know what you find.

[Jutz]

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@p- wrote:

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@MikeC80 wrote:

I've read that they look at two factors and Jutz did list one of them which is a cumulative utilization %. Someone correct me if i'm wrong but I also remember reading that they also look at each card individuallly as well. If that is the case, then you want to have the exact same utilization on every revolving card you have. This should maximize the score. As far as the sweet spot, I know under 30% is good and someone listed to put them at 10%. I'm not sure which one is better, i've always used 20% as a good way to go but I would love to hear from someone else who has more experience with ideal utilization %'s.

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This kind of stuff is hard to pin down, but from what I've seen people seem to get their best scores when only one card has a balance, that balance is less than 10%, and the overall utilization is less than 10%.  But every situation is different.  If you really want to know, pull your fico's every month and try different utilization patterns for each month.  Then, let us know what you find.

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+1 to p-

10% total, 1 card w/ balance.  This is of course micromanaging, and you'll live as long as it doesn't get too high, and you get it to the optimum by the time you apply for something.

There are probably far more nuances to FICO scoring than we'll ever know, so as always, YMMV