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Pangloss1980
Posts: 3
Registered: ‎08-14-2007
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FICO Scores and Utilization - Where are the cutoff points and how much do they matter?

This topic was created for those who are using their high credit scores to get attractive credit card offers involving 0% balance transfer periods, with the aim of using the available credit to "transfer" money to yourself and earn interest on the credit card company's money until the promotional (0%) rate expires and the loans must be repaid.
 
Everyone seems to agree that under 10% overall utilization (and absence of extremely high individual utilization) is a positive for your score; it also seems to be a conventional wisdom that FICO uses 50% as another benchmark worth staying under to avoid a score hit.  But for those looking to earn interest on their credit card company's money, the return for using 10% vs 50% vs 90% are obviously huge.  My question is what level of utilization anyone playing this game recommends, and how significant the consequences are for going from, say, 45% overall utilization to 85% overall utilization.
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smallfry
Posts: 4,831
Registered: ‎04-20-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?



Pangloss1980 wrote:
This topic was created for those who are using their high credit scores to get attractive credit card offers involving 0% balance transfer periods, with the aim of using the available credit to "transfer" money to yourself and earn interest on the credit card company's money until the promotional (0%) rate expires and the loans must be repaid.
Everyone seems to agree that under 10% overall utilization (and absence of extremely high individual utilization) is a positive for your score; it also seems to be a conventional wisdom that FICO uses 50% as another benchmark worth staying under to avoid a score hit. But for those looking to earn interest on their credit card company's money, the return for using 10% vs 50% vs 90% are obviously huge. My question is what level of utilization anyone playing this game recommends, and how significant the consequences are for going from, say, 45% overall utilization to 85% overall utilization.



Huge? How much money do you want to borrow? 500K? At 5% you'll make 25K. Eventually you have to repay the money. This BT game leaves me cold. Do yourself a favor. Stay out of debt.
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Brammy
Posts: 5,436
Registered: ‎03-10-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?



Pangloss1980 wrote:
This topic was created for those who are using their high credit scores to get attractive credit card offers involving 0% balance transfer periods, with the aim of using the available credit to "transfer" money to yourself and earn interest on the credit card company's money until the promotional (0%) rate expires and the loans must be repaid.
 
Everyone seems to agree that under 10% overall utilization (and absence of extremely high individual utilization) is a positive for your score; it also seems to be a conventional wisdom that FICO uses 50% as another benchmark worth staying under to avoid a score hit.  But for those looking to earn interest on their credit card company's money, the return for using 10% vs 50% vs 90% are obviously huge.  My question is what level of utilization anyone playing this game recommends, and how significant the consequences are for going from, say, 45% overall utilization to 85% overall utilization.


 
You just said yourself that 40% is one benchmark 75 is another and 90% can affect you as badly as a collection.  that being sai, it seems that the FICO scores utillization can be somewhat fluid as it does nothing more but compare your utilization against the general population.  If there are drastic changes in the general population, such as a mad ush to reduce the amoutn of credit card debt, the utilization factor will change.
 
It also depends on where you are in the scoring model.  For the longest time I was advised 30% utilization by the reports themselves but realized that this was only to get me to the next tier.  Once that was reached my reccommendations changed giving me the numbers to reach the highest teir, now 7%.
 
I would try NEVER to have utilization overall greater than 35% and moreover never to have a single card at 90% or above 50% if it can be helped.

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masdeocho
Posts: 2,050
Registered: ‎04-17-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?

I'm playing the game now.
 
I don't care about my utilization on the one card where I've taken the cash advance because I'm not planning to apply for credit before I have to pay back the balance.  There is no such thing as "historical utilization."
 
The only possible downside to having high util on this one card is that my car insurer may get nosy and hike the premium.  I think it's unlikely since I've been playing for 9 months and they haven't done a soft pull.  If they do, I'll tell them I'm paying off the balance shortly and they'll lose me as a customer.
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
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MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?



masdeocho wrote:
 
There is no such thing as "historical utilization."


But:
 


Tuscani wrote:

For example, lenders can see the progression of a person's credit score


???   :smileyhappy:

The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
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Brammy
Posts: 5,436
Registered: ‎03-10-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?

I dont believe lenders can see the progression of your scoring but what they CAN see isthe progression of your limits or lack thereof.  If a new creditor sees that you have had regular increases with another card, they are more likely to want you on their team because that alsoshows a hsitory of responsibility.  They can also see your historical balances if they eyeball it.
 
If you were maxed out for the year before you applied, they may be skittish about welcoming you to the team
Moderator Emeritus
masdeocho
Posts: 2,050
Registered: ‎04-17-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?

Lenders can see the progression of your balances, but I don't see how they could know the progression of your CLs.
 
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
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ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?

Lenders can see on cr's high balance to know if one pushes their limits. Also EX keeps historical data on bal/payments.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
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MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?



Brammy wrote:
I dont believe lenders can see the progression of your scoring but what they CAN see is the progression of your limits or lack thereof. 

How?
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Super Contributor
MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007
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Re: FICO Scores and Utilization - Where are the cutoff points and how much do they matter?



ilovepizza wrote:
 Also EX keeps historical data on bal/payments.


Where?
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid

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