Percentage of cards usage rule

[Anonymous]

What's a good usage rule to avoid big score penalty or scaring other lenders?  This would be on non app months which I know the one card at 1-9% rule is best for scoring.  Say you have a bunch of cards and want to use them to grow within the lender, points, etc.  Say keeping any used cards under 30% util at most and overall under 30% utilization at most, what's a safe percentage of cards to let balances report on?  30%?  50%?  Most are PIF most of the time.

[Anonymous]

100%.

Assuming you have a decent score, I have never heard of anyone frightening his other creditors (i.e. receiving AA) by having all of his cards reporting a positive balance.  Indeed, there's been some question as to whether FICO 8 as a model cares that much about that factor.  Some people have carefully tried to show a difference in FICO 8 between exactly 1 card out of several vs. 100% of his cards showing a balance, and with limited success.  I am not saying that it never matters even slightly for anyone, but its fair to say that it doesn't matter that much -- assuming that the person is keeping his other factors under control (as you describe).

So if your own personal style (in an ideal world) would be just to use your cards naturally and let however many report as they are going to (possibly using autopay to handle it) then I can only encourage you to move ahead with that and not worry about it.

[Anonymous]

Thanks man, sounds good

[Anonymous]

As far as scaring lenders, based on the responses I got in another thread regarding someone I know that's been at 93%-99% utilization on 5 major cards (3 Chase, 2 Capital One) for the last 3-6 months, utilization and maxed out credit lines in and of themselves don't necessarily do it.  At least not with Chase and CO.  I can't speak of all lenders.  They'll gladly let you keep paying them interest, so long as you don't miss any payments.  Where the problem comes in is when you miss even 1 payment... and it doesn't have to be a payment with that particular creditor.  It could be an auto loan payment, but once Chase / CO sees that they may take AA and either close your account or dramatically reduce your limit. 

I'm in no way suggesting anyone should ever roll with maxed out credit cards, by the way, just offering the feedback that was relayed to me by several people in another thread.

[CreditMagic7]

Well i am no expert (yet) in fractional ratings employed by FICO Wizardry but at least in my own profile it's now determined from recent discovery that anything beyond reporting 1/3rd card balances from a total of 27 National Revolving/Bankcards incurs a scoring penalty.

On my profile with deliberately revolving balances and trying to hash things out i "WAS" under the mistaken impression that 50% might be a cut-off point but no dice.

What i am measuring now (trying to anyway) while i'm at is something of another mystery in that i am allowing certain of these balances, since i am already past the 1/3 percentage threshold and still in FICO Penalty Phase for this, to linger while trying to capture a Data Point if there is an additional loss of points for letting balances continue unabated (but well under 25% individually).

For example 90 days 120 days 6 months etc. Daunting task but i am determined to catch it when that needle budges a single increment due to Time Limitation (if there even is such a thing) 

Good Topic OP and thanks for opening this.

There is a "Percentage of cards usage rule" at least where concerns balances from one month to another and how many.

[Anonymous]

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@Anonymous wrote:

As far as scaring lenders, based on the responses I got in another thread regarding someone I know that's been at 93%-99% utilization on 5 major cards (3 Chase, 2 Capital One) for the last 3-6 months, utilization and maxed out credit lines in and of themselves don't necessarily do it.  At least not with Chase and CO.  I can't speak of all lenders.  They'll gladly let you keep paying them interest, so long as you don't miss any payments.  Where the problem comes in is when you miss even 1 payment... and it doesn't have to be a payment with that particular creditor.  It could be an auto loan payment, but once Chase / CO sees that they may take AA and either close your account or dramatically reduce your limit. 

I'm in no way suggesting anyone should ever roll with maxed out credit cards, by the way, just offering the feedback that was relayed to me by several people in another thread.

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Hi BBS.  The OP isn't asking about what percentage utilization he should have to avoid adverse action.  He's already decided that he's going to always keep each card below 29% of its individual limit.

The percentage he's asking for help on refers rather to the total number of cards he has.  For example, if he has ten cards, how many of those can report a balance (even a tiny one) without scaring his creditors?  If our answer is "80%", for example, that would mean in that example he could have 8 out of 10 cards showing a balance.

My feeling was that he could let them all show a balance (100%) and the other creditors wouldn't care.

[Thomas_Thumb]

As CGID said, when it comes to concerns regarding AA, % cards reporting a balance is not an issue. No problem allowing 100% to report if optimizing score is not a concern. 

On the otherhand, I would caution against maxing out multiple cards and doing so month over month as that behavior may result in AA and likely will influence decisioning on new credit/new CLs and CLIs on existing accounts.

I am an advocate of using cards and allowing balances to report naturally as long as aggregate utilization is maintained at a "reasonable" level. By reasonable I mean that you can PIF all reported balances even though you may choose not to due to a 0% promotional APR.

[Revelate]

Dirty file, 1/3 on EQ FICO 8 was -3, 1/2 was -4 for a total of -7.  /yawn . EX/TU were both around -7 at 1/2 when I tested this a while ago, I see the 1/3 over and over on EQ though just with my natural use case like CreditMagic suggests.

Probably higher on clean files but end of the day it's not material when you aren't applying for anything.  I've never done full monty everything reports a balance, our swiss flag flying friend tried it once on a clean file (800ish) and dropped a lot, but I never really saw any good confirming data... we know the penalties exist and likely across most if not all scorecards, but not their magnitudes which almost assuredly do vary by scorecard.

I may try it for giggles after this months no balances testing. 

[SouthJamaica]

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@Anonymous wrote:

What's a good usage rule to avoid big score penalty or scaring other lenders?  This would be on non app months which I know the one card at 1-9% rule is best for scoring.  Say you have a bunch of cards and want to use them to grow within the lender, points, etc.  Say keeping any used cards under 30% util at most and overall under 30% utilization at most, what's a safe percentage of cards to let balances report on?  30%?  50%?  Most are PIF most of the time.

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In my opinion it has some downward effect on scores to have more than 1/3 of one's cards reporting balances, even small balances, and even more of a downward effect to report balances on more than half.

But I can't prove it.