@Anonymous wrote:
After living in Canada for 5 years, I have returned to the US and have just been approved for my first US CC in several years. It only has a CL of $320. What is the optimum credit utilization for building credit? Also, I assume that credit utilization is the ratio of balance to available...? Is that right?
Thanks for any input!
Geobrian
Current FICO EQ 661, FICO TU 675
Hi there.
There really is no one size fits all approach to this. You might have to play around with the percentages over a few months to see what works best for you. Some say 1% works best for them, others 3-5%, while still others the "sweet spot" might be 7-9%.
Remember that you can use the card as much as you want during the month but that the amount reported on your monthly statement is what is used to calculate utilization for that month. Once you know when your statement posts just time your payments so that the desired utilization is achieved several days before the staement comes out. And then of course pay any balance before the due date to avoid any interest charges.
In your case try and make sure the reported amount on your statement is no more than $29 (9% of the CL of $320).
From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782
"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".
Starting Score: 583 EQ, 612 EX, 569 TU