Understanding FICO® Scoring

[jwills1218]

What % of Utl does the scoring model consider it maxed out?

[jwills1218]

Found it, 90%.

Feel free to delete. I can't do it on my phone.

[Shogun]

I have it at 90% also.

[RobertEG]

+1

As an aside, in my opinion, the more significant impact of a maxed-out card is its potential to generate an internal review of your account by the creditor, with possible reduction of credit limit to lower their risk.

The FICO impact will "go away" once the util is paid down, as % util of CL is not based on prior util levels.

[jwills1218]

Agreed! My Amex once had a $8100 CL. I had $7800 on it and my other cards were 90%. When I paid 1k to Amex they immediately lowered my cl. This happened a few times. I've paid off most of my other debt to this point. Hoping as I make 500-600 payments they don't continue to lower it. (prib did it 4 times on my delta and once on blue from 2500 to 1k)

[Revelate]

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RobertEG wrote:

+1

As an aside, in my opinion, the more significant impact of a maxed-out card is its potential to generate an internal review of your account by the creditor, with possible reduction of credit limit to lower their risk.

The FICO impact will "go away" once the util is paid down, as % util of CL is not based on prior util levels.

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Is this particularly common from what you've seen on a card that is maxxed yet paid down fairly quickly?  

I can understand that if it's at a maximum balance and a minimum payment is made month after month; however, I don't think a singular datapoint is enough to justify that unless your reported income isn't sufficient for their risk model (which begs the question why they extended you that limit anyway)?

[my-own-fico]

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jwills1218 wrote:
Agreed! My Amex once had a $8100 CL. I had $7800 on it and my other cards were 90%. When I paid 1k to Amex they immediately lowered my cl. This happened a few times. I've paid off most of my other debt to this point. Hoping as I make 500-600 payments they don't continue to lower it. (prib did it 4 times on my delta and once on blue from 2500 to 1k)

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Paying off credit card debt is often a choice between the card with the highest interest rate and the card with the lowest balance (debt snowball). But yes there are other factors, and a maxed-out card can certainly result in balance chasing. You may also want to protect cards that have low interest rates or high credit limits, especially when no annual fees.

[colnagoflight]

Here is a link to an article that I found on credit utilization and score:

http://www.creditkarma.com/article/CreditCardUtilizationAndScore

From personal experience, i am tracking the previous balance, payments/credits, fees and interest, transactions, new balance, credit limit, available credit and then i have an column that calculates the utilization of balance to limit at the time the bill prints the statement.  i would recommend tracking your statements in excel and see what your balance is to what your credit limit is and tracking if your score goes up or down.  i have a $3,000 credit limit and i had a balance of $1795.00 the other month.  now that created a 59.83% utilization which caused my credit to tank all the way down from 664 to 634 in month but i paid it in full and my score went back up to 657 as of this month.  

from what i have gotten from capital one is to keep your card balance maximum of 30% or under.  from my research i think it is 10% increments.  

Thoughts?  anybody have any other data to add?

less than 10% = excellent   / Grade A

less than 20% = good          / Grade B

less than 30% = fair              / Grade C

less than 40% = bad             / Grade D

less than 50% = really bad  / Grade F

the summary is that every time my utilization goes over 30%, i go down in credit score.  My personal rule is pay the card before the card statement is due down below 9% if at possible.  When I do that, my score seems to go up.  According to the chart that (link above), people that keep their cards 10% or lower have the highest credit scores.  means their risk is lower

[Richie01178]

Maybe you can help me out then?

When i was originally prequalifying for an FHA loan with my fiance in September 2012, my TU- 664, EQuifax-644, and EX- 637.  At the time I had $699/3,000 utilized on a Capital One card, and $295/300 utilized on an Orchard Bank Card.

I knew nothing of UTIL at the time adversely affecting credit scores.  When my credit score was run again in December 2012 I had $2,997/3,000 and $297/300 utilized.  Now TU-654, EQ- 623, and EX- 621, which is unacceptable for the loan.  

We were able to proceed using the original scores, but the credit report WILL be re-run before the application is accepted or rejected at the end of the month.

When it is re-run, I will have balances of $0 on both cards (which report this week).  What kind of scores can I expect in a few weeks?

Thanks in advance.

[my-own-fico]

Have you tried myFICO's own FICO® Score Estimator?