@Thomas_Thumb wrote:
@Anonymous wrote:Very thoughtful, Sladyesq.
I think that when people use utilization % as a way of tracking the safety and wisdom of their debt and spending levels (my utilization is 5% so I must be behaving really responsibly) that's a big mistake, for the very reasons you cite. Basically it's really not hard to get a gigantic total credit limit. If you keep applying for enough cards and engaging in various well known tricks to create an artificially high credit score, you can eventually get a CL of 200k or perhaps much more, even with a comparatively low annual income.
Even the rule of "paying in full" doesn't really (in itself) assess whether a person's monthly spending is wise, since it doesn't take into account how much the person is managing to save each month (toward retirement, toward a house DP, toward a rainy day fund, etc.).
So my feeling is that utilization is something a person should largely ignore as a basis for deciding how to spend their money, since U% and CLs and FICO scores in general are so easily gamed. Rather, the best single metric (in my opinion) is looking at how much of your paycheck you are saving. It should be a whole lot. :-)
CGID - Controlling expenses to provide saving is paramount. This can and should be accomplished regardless of aggregate CL and UT%.The suggested CL range of 50% to 100% is predicated on aggregate UT% being maintained under 10% without "balance pay down tactics" before statements close. As income rises beyond middle income, reducing aggregate CL from 50% to 20% of income is advised. Really at a $5M income, do you really need an aggregate CL in excess of $1M?Also, as income falls below say, $50k, CLs in excess of 50% income represent increased risk for ability to pay. Again, throttling back aggregate CL would be prudent. These suggestions are also predicated on allowing full balances to report and maintaining aggregate UT under 9% [preferrably 6%].Example: combined CL = 60% and monthly UT = 5% => 3% of yearly income in CC expenses per month.I prefer not to pre-pay charges and to maintain aggregate UT between 1% and 3% month to month. A combined CL of around 80% works well for my situation.
This makes some sense. If the CL are high enough, then even with everyday spending, you should be under 10% without having to micromanage payments. I get that. It seems that your great explanation (which I agree with) get lost in the shuffle with folks looking solely at the percentage of their available credit, opposed to the percentage of their income and other obligations.
So in relation to the original post/question, where does this analysis factor into whether or not the lower AAoA or inquiry hit are worth the new account?
Edited to add: It's a balance that each must find for themselves.
I think it is vitally important that someone just starting out or rebuilding their credit get 5 to 8 quality CCs as soon as possible. It might take a person 2 to 3 years and maybe 10 CCs before they end up with 5 to 8 CCs that they actually want and can keep open for life. This will give them a rock solid AAoA for the rest of their lives. I think that having 5 to 8 credit cards has everything to do with a rock solid AAoA with CLs not being of much importance. You can change a CL with one good CLI or new app, AAoA takes time!
If you have clean reports and once your AAoA hits about 2 years you should be seeing scores around 760 and it will only get better from there. Most people would at most need to app for new credit to satisfy real life needs at most 1 to 2 times per year. By having those CCs aging away month to month, you won't ever have to worry about AAoA again. Now, if you hang out on the MyFICO forums that might be a different story. 
Now, I understand that most people that want their scores higher want it done quick because the need an auto loan or mortgage in the near future so they can't app that much in the first year or two, but they need to make it a priority to finish up getting the 5 to 8 quality credit cards after they get the auto loan or mortgage. That's what I am planning to do in my future. I have plans for a mortgage as soon as I get my tax liens paid and removed from my reports. (Almost there!) My last app was for a CC 9/14 so as soon as the tax liens are removed I'm ready for a mortgage app. As soon as the house closes I will app for 2 to 3 more CCs, close a couple of CCs and be done for quite some time.
Thanks for clarifying width, I wasn't sure how much the closed accounts helped/hurt except in helping by stretching my overall account history. There are more open installment accounts than I'd like, but I am grateful for the undergraduate experience and for the credibility the [consistently paid] loans will yield for years to come.
I just remembered this too! The 3 CB report said something to the effect of me having a diverse set of accounts, probably and most recently, thanks to these loans.
I've been so excited from all the empowering dialogues going on here, though upset at myself for not applying for more credit cards a few years ago -for the sake of AAoA if nothing else. Earlier, however, I had a much needed spinal tap reading through a lot of Chase Slate reviews, so thank you for confirming my thoughts about the waiting game. 
I claim this Test passed!