Effect of High Utilization on One Card

[ObieGrad]

I have a very high FICO score.  If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

[Anonymous]

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@ObieGrad wrote:

I have a very high FICO score.  If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

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A lot depends on your overall credit file but generally that high of a utilization on one card will lower your scores but they will recover in time as you pay the loan down.

[Anonymous]

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@ObieGrad wrote:

I have a very high FICO score.  If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

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I can only speak from my experience.  I had scores in the low 810's and total C/L in the 450k range.  In January 2014 I got the Arrival+ with a $22.5k limit.  Within a few months, I had it spent up to $21k, where it pretty much held until I paid it off January 2015.  For the entire time I had the Arrival+ pegged at $20k-$21k, my score dipped into the 780-790's.  Once I paid off the Arrival, my score sprang back into the 800's.  Of course, there are other factors, inquiries chief among them.  But there certainly seemed to be a punishment to having that balance on the Arrival+.

Chris. 

[Anonymous]

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@ObieGrad wrote:

I have a very high FICO score.  If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

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Perhaps your overall UTI won't be effected much, but the UTI on the BT card will be high. There's no escaping the FICO decrease that you will have if one card is nearly maxed out. But again, the overall UTI may not be effected, so it won't kill your score by any means, but keeping UTI spread out among several cards (below 30%) would be more ideal for your score. But also, doing that isn't exactly ideal either, because all cards have different rates and BT offers. I personally wouldn't think too much about it if there's no other way for you to do a BT and you need that service. That's what it's there for. 

[Imperfectfuture]

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@Anonymous wrote:

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@ObieGrad wrote:

I have a very high FICO score.  If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

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Perhaps your overall UTI won't be effected much, but the UTI on the BT card will be high. There's no escaping the FICO decrease that you will have if one card is nearly maxed out. But again, the overall UTI may not be effected, so it won't kill your score by any means, but keeping UTI spread out among several cards (below 30%) would be more ideal for your score. But also, doing that isn't exactly ideal either, because all cards have different rates and BT offers. I personally wouldn't think too much about it if there's no other way for you to do a BT and you need that service. That's what it's there for. 

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Agree.  Just don't do any apping until almost paid off.

[Revelate]

To add another datapoint from a mortgage score, I went from 660 to 646 to 660 to 646 to 660 when maxxing out tradelines on Beacon 5.0.  Does affect things, but if you're 800+ and the balance transfer makes financial sense to do so, I'd do it in a heart beat without thinking twice.  I'd do it even at other strata too, finances > FICO.

[cem13]

I had my NFCU  card report 37% (8% overall ) on 27JUN.  I try to keep it at 10 to 15%.  I had a 5 point drop on all 3 CRA.

[CreditGuy03]

So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.

[NRB525]

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@CreditGuy03 wrote:

So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.

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It's better to put the entire BT so the one card is 90% Utilization, because that's where the lowest interest rate is.

As noted by others, cash savings beats out FICO score games every day of the week. The score will come back. The balance pay down will go faster if there is 0% APR on that balance. Win-Win.

[Anonymous]

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@NRB525 wrote:

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@CreditGuy03 wrote:

So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.

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It's better to put the entire BT so the one card is 90% Utilization, because that's where the lowest interest rate is.

As noted by others, cash savings beats out FICO score games every day of the week. The score will come back. The balance pay down will go faster if there is 0% APR on that balance. Win-Win.

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^^^^ +1

Exactly! The points come back to you, but the money spent on interest payments does NOT.