@Anonymous wrote:
I know that credit utilization plays a role in your actual fico scores. I am curious as to how much over utilization may affect a score. I am at like 46 percent utilization overall but one of my cards is almost maxed out. I am wondering if paying down the highest utilization card by a sizeable amount reducing my utilization to 20 to 25 percent would have a meaningful affect on my score. I am in the very low 700 range with some 5 to 7 year old 60s and 90s holding me back.
The Fico score pie thats devoted to revolving utilization is 30% of your score. Fico calculates it overall, on each card and on how many of your cards have balances it also looks for individual cards that are maxed out (have a balance greater than 89% of the cards limit). Paying down your maxed out card first is advisable and then start paying off the cards until you only have 1 reporting a small balance no greater than 9% of its individual CL. You will have to experiment with the balance on that one card to find your sweet spot, everyone has a diff percentage between 1-9% that yields the greatest score possible. One other thing on utilization is this, there are buckets in Fico, carrying high utilization over long periods of time gets you bucketed in a lower scoring bucket, when you pay off the cards and get down to the one reporting it will take some time for you to get the most points possible as you have to be able to maintain that low utilization before Fico rebuckets you upward into a higher scoring bucket. In general you dont want a card to ever report more than 30% of its available credit to the CRAs.
