Reply
Contributor
MissKay
Posts: 111
Registered: ‎02-05-2012
0

Utilization question

[ Edited ]
Once you get your utilization to under 9%, will your score change if you go under say 5%? or does it remain the same after a certain point? TIA

Starting Score: 595 2/5/12
Current Score: 650 midscore lender pull 7/24/12
Goal Score: 640

Take the FICO Fitness Challenge
New Contributor
wmcodywilson
Posts: 61
Registered: ‎01-27-2012
0

Re: Utilization question

Under all the posts Ive read on here it varies for each person. The best advice I can give is to play around with the percentages month to month and see what gives you the best score jump. Im currently playing with this as well. 


Starting Score: EQ 489 1/2012 TU 493 1/2012
Current Score: EQ 547 5/2012 TU 562 5/2012
Goal Score: 700


Take the FICO Fitness Challenge
Moderator
LIGHTNIN
Posts: 4,189
Registered: ‎03-24-2008
0

Re: Utilization question

Good answer wmcodywilson.

 

I would also like to add. If you have 3 CC's, have 2 of them report $0 and the last CC to report about 9%.Some say that works the best.

FICO's Oct 2013 TU711 EQ713 EX723~~Live below your means and always keep an emergency fund -Love Everybody ~ Big Kenny ~ Big and Rich ~~~~~Credit Scoring 101 - Common Abbreviations - Freq Req Threads - Free Credit Reports - What Steps Do I Take?DV? PFD?
Contributor
MissKay
Posts: 111
Registered: ‎02-05-2012
0

Re: Utilization question

Thanks for the responses. I have 3 and I was at 8% and carrying a $20 balance on 1, $0 on the other and a $60 balance on the other. I paid down the $60 cc to $20 and was wondering if it will matter. By the end of this month I will carry a balance on just 1 cc and see how it helps. Do I need to charge $20a month on the other cards then pay before the statement to $0, or am I ok just not using them at all?

Starting Score: 595 2/5/12
Current Score: 650 midscore lender pull 7/24/12
Goal Score: 640

Take the FICO Fitness Challenge
Moderator
MarineVietVet
Posts: 14,953
Registered: ‎07-14-2009
0

Re: Utilization question


MissKay wrote:
Thanks for the responses. I have 3 and I was at 8% and carrying a $20 balance on 1, $0 on the other and a $60 balance on the other. I paid down the $60 cc to $20 and was wondering if it will matter. By the end of this month I will carry a balance on just 1 cc and see how it helps. Do I need to charge $20a month on the other cards then pay before the statement to $0, or am I ok just not using them at all?

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.




Valued Contributor
rckstrscott
Posts: 2,660
Registered: ‎04-25-2011
0

Re: Utilization question


MarineVietVet wrote:

MissKay wrote:
Thanks for the responses. I have 3 and I was at 8% and carrying a $20 balance on 1, $0 on the other and a $60 balance on the other. I paid down the $60 cc to $20 and was wondering if it will matter. By the end of this month I will carry a balance on just 1 cc and see how it helps. Do I need to charge $20a month on the other cards then pay before the statement to $0, or am I ok just not using them at all?

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.





+1

 

I saw my best scores when I had all of mine reporting zero with the exception of one reporting under 9 percent..

 

-scott

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 09/14: TU: 784 | EQ: 752 | EX: 784
Collections Removed: Hunter Warfield, CBE Group, Merchants Credit Guide, EOS-CCA, Enhanced Recovery, Portfolio Recovery, UCB, American Collection Company, Medical Business Bureau, Jefferson Capital, Credit Portfolio Associates, FCO, LVNV, Convergent, Armor Systems
Other Negative Entries Removed:Plains Commerce CO, HSBC CO, 2008 Judgment Santander Reposession


Positive Accounts:10/10: 0 | 07/12: 6 | Mortgage Closed 5/12, Macy's AMEX $13900, Citi/Home Depot $8500, Capital One Cash Rewards $3500, BOA $7500 Total Utilization: 3%. AAoA: 2yr, 9mth. INQS: 1 TU, 1 EQ, 3 EX

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}