Understanding FICO® Scoring

[Busybee]

Hi Folks,

It seems the credit system is made in favor for the creditors not the consumers.  Paid down my credit card by $12,000 balance several months ago and kept the balance under 30% as recommended by the guideline.  Guess what, did a rescore for a mortgage and just got the score to go up by a measely 37 points total.  Then paid for next 2 months and scores went up an anemic 4 points per month.  Now just happen to used one of my lower limit cards ($500) to $425 for charges that I am going to pay off end of month.  Just receive an alert that score went down 12 points!  How fair is this?  It seems that the 30% ratio applys to all cards no matter what the limit is.  I guess having a high limit card is a better scenario vs a lower limit one because it hurts your credit like it did for me.  The computer sees it as nearly max out toward its limit and doesn't care if its only $500 limit.  All it sees is its near its max limit.  This was a momentary purchase just a few weeks ago that I plan to pay off in the next few days.  Hasn't even been a full month yet.  To me, it doesn't even make sense to have a low limit card like I have because if you use it, it's gonna hurt your score.  Had I known this, I wouldn't have use the card at all.  Am I wrong about this?   Just wanted to blow off some steam.  Have a great day folks.

[MidnightVoice]

A couple of suggestions.

Use your low limit card to pay for MyFICO products monthly, then it a small amount and can report as activity. PIF as soon as it reports  

Use online banking to pay of MOST of your CC debt BEFORE the card reports to the CRA, then PIF as soon as it reports the low balance and some activity.  That way - no finance charges

[ilovepizza]

Yea, I agree it doesn't make sense if someone has $10,000 in avl credit and they have 1 card with a $200 limit, and when they run up $180 they are hit for a few extra points when their UTL is below 2%. lol. The dip is small. Imagine all those people that don't know about UTL and keep all their high CL cards in the drawer because they are worried they will loose them, so instead they carry their $200 limit cards and max them out.