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Valued Member
cowgirl79
Posts: 49
Registered: ‎02-07-2008
0

Utilization question...

I know it's best to keep utilization below 9%...does that mean for each account or overall? Right now I have about 11k in available credit with 1500 on a card with a 2500 limit with the others at 0. I'm doing this because it was interest free financing. Right now it's reporting at 0 but when the statement cuts am I going to get nailed? Will it look like 60%? Thanks in advance for the info.
Closed on first home 11/8/12 FHA 3.5%!!
Established Contributor
jimbo831
Posts: 977
Registered: ‎02-08-2012
0

Re: Utilization question...


cowgirl79 wrote:
I know it's best to keep utilization below 9%...does that mean for each account or overall? Right now I have about 11k in available credit with 1500 on a card with a 2500 limit with the others at 0. I'm doing this because it was interest free financing. Right now it's reporting at 0 but when the statement cuts am I going to get nailed? Will it look like 60%? Thanks in advance for the info.

It will hurt your utilization to have something reporting a balance and will lower your FICO score.  I will also soon have a Best Buy card reporting about a 90% utilization that is also interest free.  The key is to make sure you pay it down before you plan to apply for credit.  There is no memory in utilization, so it doesn't much matter unless you are applying for credit now.

 

As for amount to keep, most people say you want to keep a 0 balance on all but 1 card.  On that last card, you should keep anywhere from 1-9% of your total available credit across all cards.  Ie, you want your total utilization to be 1-9%, but that utilization should only come from one card.  FICO scores total utilization and also scores what % of accounts have any utilization.

Gardening with: PSECU Combo $1k, Chase Freedom $3.5k, Discover It $1.7k, Amex Costco True Earnings $2k, Capital One Platinum $500, Best Buy Store Card $2.7k

Starting Score: FICO: 587 EX, 594 EQ, 632 TU, 2/15/12; USAA FAKO: 525 EX, 541 EQ, 525 TU, 2/15/12
Current Score: FICO: 678 EX, 629 EQ, 658 TU, 3/27/12; USAA FAKO: 721 EX, 721 EQ, 576 TU, 3/9/12
Goal Score: 700 Across the Board and Amex Zync or Costco By The End Of 2012


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