Is utilzation scored by each account or overall?

[jbishop1001]

I am wondering if FICO scores utilization per each individual account - OR if it's scored overall?

Does it lump your credit limits all together and divide it from your balances?

Example: I now have 3 accounts. $1700 of total credit, with $600 being used. 2 of those accounts are maxed. And one has $1100 of available credit.

Does the overall credit limit help with utiliztion when other accounts are maxed? Or does FICO score each account's utilization?

[Revelate]

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@jbishop1001 wrote:

I am wondering if FICO scores utilization per each individual account - OR if it's scored overall?

Does it lump your credit limits all together and divide it from your balances?

Example: I now have 3 accounts. $1700 of total credit, with $600 being used. 2 of those accounts are maxed. And one has $1100 of available credit.

Does the overall credit limit help with utiliztion when other accounts are maxed? Or does FICO score each account's utilization?

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It does both: aggregate utilization, and individual tradeline utilization.  There's even a third portion where it takes a ratio of the number of cards reporting a balance to the total number of revolving accounts.

Conventional wisdom (though this doesn't hold for everyone but it's close for me at any rate) is to have one card report <10% of it's limit and the rest $0, though in reality my breakpoints on individual card utilization seem to be a lot higher but it's an easy line to draw.

[jbishop1001]

So, it's not good to have balances on all cards even if they're small? It's better to use 1 primary card than a few? I thought reporting at 0% could hurt more than help?

[lhcole77]

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@jbishop1001 wrote:

So, it's not good to have balances on all cards even if they're small? It's better to use 1 primary card than a few? I thought reporting at 0% could hurt more than help?

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Though "good" is subjective, ideally the fewer accounts that report a balance, the better.

ETA: If all accounts are reporting 0 then that can ding your score. If all but one are then you stand a good chance of seeing improvements in score.

[masscredit]

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@Revelate wrote:

It does both: aggregate utilization, and individual tradeline utilization.  There's even a third portion where it takes a ratio of the number of cards reporting a balance to the total number of revolving accounts.

Conventional wisdom (though this doesn't hold for everyone but it's close for me at any rate) is to have one card report <10% of it's limit and the rest $0, though in reality my breakpoints on individual card utilization seem to be a lot higher but it's an easy line to draw.

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I've been under the impression that it was <10% of the total of all of all card's avaialble credit. I've been playing around with my utilization recently. Had it down to .002% and then let it increase to 3%. My EQ08 score lost 6 points. That amount is 13.9% of that card's available credit. I didn't think my score would change because it was still way under 10% total utilization but maybe it did because it was more than 10% of that one card's utilization? 

[bobebob]

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@Revelate wrote:

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@jbishop1001 wrote:

I am wondering if FICO scores utilization per each individual account - OR if it's scored overall?

Does it lump your credit limits all together and divide it from your balances?

Example: I now have 3 accounts. $1700 of total credit, with $600 being used. 2 of those accounts are maxed. And one has $1100 of available credit.

Does the overall credit limit help with utiliztion when other accounts are maxed? Or does FICO score each account's utilization?

---

It does both: aggregate utilization, and individual tradeline utilization.  There's even a third portion where it takes a ratio of the number of cards reporting a balance to the total number of revolving accounts.

Conventional wisdom (though this doesn't hold for everyone but it's close for me at any rate) is to have one card report <10% of it's limit and the rest $0, though in reality my breakpoints on individual card utilization seem to be a lot higher but it's an easy line to draw.

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My recent score changes since the new FICO 08 model was adopted by myFico seem to show that two cards posting balances is "Prefered" by 08.

With posted balances consistantly in the low single digits(%), I now lose points if I only have one card showing a balance.  My score just dropped to 820 from 833 when my second card balance went from $11 to $0. Previously it had gained those points when I let the second card post the small $11 balance.

The old 04 version (which I now only see once a month from my DCU account) penalizes me for having more than one card post a balance.

[Anonymous]

So I currently PIF on 3 of the 4 cards listed below with the exception being my Fingerhut account which has about 10% or $150 report monthly. Should this be fine in keeping with the 1 card report 10% approach or should I maybe do same for the QS1 and report a $5 balance or 1% on that as well? Trying to maximize my scores as well and dont want to step back instead of forwards. Thanks in advance.

[jamie123]

I have 7 credit cards and a score that is around 696. For every creit card more than one that reports even a minor balance I loose 4 points.

I sometimes have paid the balance down to $0 too early and then an autopay like Netflix gets charged to the account. If the $8 Netfix charge is reported I loose 4 points. Same goes for a couple of cell phone bills on other accounts.

[Anonymous]

In my experience. Whenever I let a 2nd card post a balance even s minuscule amount I've Always seen a corresponding drop in score. This is 08 scoring.

[Revelate]

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@Anonymous wrote:
In my experience. Whenever I let a 2nd card post a balance even s minuscule amount I've Always seen a corresponding drop in score. This is 08 scoring.

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This happens with me as well according to the upgraded Scorewatch and presumably from the newer 3b monitoring though I haven't been tracking my scores much recently I can go back and do a historical analysis pretty easily.

Gained points going from 2->1 card (out of 9) reporting a balance, then lost the same amount when another reported.

I will say though that I did have a data point where I went from 8% to 44% utilization on that one card and the score didn't budge (still <10% of my aggregate) but I think the primary take away is that there's conventional wisdom which doesn't hold for every single individual.  We know that people have variations in optimum balance amount based on their individual report, it's entirely possible that some data prefers 2 accounts with balance than one (I'm assuming you're not involving AU tradelines in this bobebob, AU discounting may be the source of the issue otherwise as a difference between FICO 8 and FICO 04)

The changes though are pretty small between 1 vs 2 cards reporting if you have call it 5+ credit cards regardless, and as such I think the base recommendation of only have 1 card reporting a balance is close enough to optimal that it's a legitimate recommendation... if someone wants to do better, then they can subscribe to a FICO monitoring service and figure out explicitly what the prettiest reported balances are for their individual report.