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Singular Card Utilization vs. Total Utilization

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Anonymous
Not applicable

Singular Card Utilization vs. Total Utilization

If one card has say 30%... or even 60% utilization but your total utilization on all cards is at or below 10% what is the effect of this on score/lending?

14 REPLIES 14
HeavenOhio
Senior Contributor

Re: Singular Card Utilization vs. Total Utilization

Overall utilization has the more significant impact. Individual card utilization, which has a lesser impact, is determined by the card with the highest utilization.

 

Keep in mind that to stay under a threshold, you need to be at 8.9% or below, 28.9% or below, etc. That's because all fractions round up. When 9.00000001% rounds up, you're no longer "under 10%."

Message 2 of 15
Anonymous
Not applicable

Re: Singular Card Utilization vs. Total Utilization

Nice response by Heaven.  Assume for a minute that total utilization is under 8.9% throughout this discussion.  Then as far as individual utilization goes:

 

9-28%.  Almost no one has reported a problem here, and if one is possible (doubtful) it should be 1-3 points.

 

29 - 48%.  More people have indicated a score problem but some people still see zero impact.  When the impact occurs it is low, perhaps 2-6 points?

 

49-68%.  Fairly universal score damage..  Still fairly low impact.

 

69-88%.  Much more pronounced effect.  Little precise data to establish how much, which likely varies according to profile.

 

etc.

Message 3 of 15
SouthJamaica
Mega Contributor

Re: Singular Card Utilization vs. Total Utilization


@Anonymouswrote:

If one card has say 30%... or even 60% utilization but your total utilization on all cards is at or below 10% what is the effect of this on score/lending?


When my total utilization is below 10%, individual utilization of 30% or more has a quite substantial effect. I would guesstimate 10-15 points in my profile and the higher it gets the worse it gets.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 4 of 15
Anonymous
Not applicable

Re: Singular Card Utilization vs. Total Utilization

Thanks so much, SouthJ.  I know you have followed this much more carefully than I have.

 

A key thing for our OP to remember is that utilization impact is always temporary.  So sure, you go on a vacation one month.  Your card has a 55% individual util and you lose some points.  Big deal.  You will gain them back once your card goes back to under 29%.

Message 5 of 15
Thomas_Thumb
Senior Contributor

Re: Singular Card Utilization vs. Total Utilization


@Anonymouswrote:

If one card has say 30%... or even 60% utilization but your total utilization on all cards is at or below 10% what is the effect of this on score/lending?


My universal recommendation is maintain aggregate utilization under 9% and individual card utilization under 29% for superior results. Some strongly advocate maintaining individual utilization under 9% as well and practice that religiously - I don't see where this tactic provides a benefit from a score point of view compared to under 29%. Key point financially is to PIF cards by due date to avoid an interest penalty.

 

If you have a 0% interest card and want to take advantage of the promotion nothing wrong in allowing a high balance (UT%) to report. However, I would advise having the reported balance to be under 69% and paying more than the minimum each month. I do believe there is increased risk of adverse action (AA), such as a CLD, if a card or cards repeatedly report high utilization.

 

Personally I did not experience any point loss when a single card reported 52% UT or when the same card reported 75% UT a couple months later. As said above, impact of individual card utilization is profile dependent. If you want to experience a substantial score penalty, allow your card to report a max out condition - over 89%. That can be hard to do while maintaing aggregate UT under 9% but it has beeen done and the impact noted by some posters

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 6 of 15
Anonymous
Not applicable

Re: Singular Card Utilization vs. Total Utilization

Many thanks TT!

 

In your case it may be hard to assess score impact, because your FICO 8 Classic score is already at 850.  Our OP may not realize this, but because there is a buffer at the top, your score might have gone from 859 to 851 and both scores would be rendered as 850.

 

That's an issue beyond the general issue of profile dependent impact and has to do with a scoring penalty being hidden from view.

 

On the other hand, if you saw zero score impact on a score that was already at less than the maximum, that would be much more striking.  For example, your Fico 8 Bankcard score from Equifax of 887 (maximum of 900).  If that 887 failed to budge at a 75% individual util, that would mean a lot.

Message 7 of 15
SouthJamaica
Mega Contributor

Re: Singular Card Utilization vs. Total Utilization


@Thomas_Thumbwrote:

@Anonymouswrote:

If one card has say 30%... or even 60% utilization but your total utilization on all cards is at or below 10% what is the effect of this on score/lending?


My universal recommendation is maintain aggregate utilization under 9% and individual card utilization under 29% for superior results. Some strongly advocate maintaining individual utilization under 9% as well and practice that religiously - I don't see where this tactic provides a benefit from a score point of view compared to under 29%. Key point financially is to PIF cards by due date to avoid an interest penalty.

 

If you have a 0% interest card and want to take advantage of the promotion nothing wrong in allowing a high balance (UT%) to report. However, I would advise having the reported balance to be under 69% and paying more than the minimum each month. I do believe there is increased risk of adverse action (AA), such as a CLD, if a card or cards repeatedly report high utilization.

 

Personally I did not experience any point loss when a single card reported 52% UT or when the same card reported 75% UT a couple months later. As said above, impact of individual card utilization is profile dependent. If you want to experience a substantial score penalty, allow your card to report a max out condition - over 89%. That can be hard to do while maintaing aggregate UT under 9% but it has beeen done and the impact noted by some posters


T_T you are the leader of us all, but my experience has been quite different. My scores bounce around quite dramatically with fairly small utilization changes. Several of my FICO 8's are presently down over 60 points because my utilization has increased to 15.75 percent with 1 card at 49%, and another at 63%. But even when everything is at 28% or less, and overall utilization is 9% or less, which has been the case almost every month since I've been posting on this board, very slight changes have resulted in serious point gains and losses.  You have observed that this might be because my profile is relatively "young" and the FICO 8 and FICO 9 models give extra bandwidth to utilization for young profiles, but for this reason one should be wary of broad rules.

 

I have some good 0%, no-fee, balance transfer offers which I will be using, but will only be using 28% or less of it.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 8 of 15
MakingProgress
Senior Contributor

Re: Singular Card Utilization vs. Total Utilization

I recently had an individual util of 42% on one card and overall util under 8.9 the month that happened I lost 9 pts and the next month when both were under 8.9 I got my 9 pts back. 

FICO 8 Starting Score

Current Scores


Garden Goal is All Reports Clean – Achieved 11/26/20
Message 9 of 15
Thomas_Thumb
Senior Contributor

Re: Singular Card Utilization vs. Total Utilization


@Anonymouswrote:

Many thanks TT!

 

In your case it may be hard to assess score impact, because your FICO 8 Classic score is already at 850.  Our OP may not realize this, but because there is a buffer at the top, your score might have gone from 859 to 851 and both scores would be rendered as 850.

 

That's an issue beyond the general issue of profile dependent impact and has to do with a scoring penalty being hidden from view.

 

On the other hand, if you saw zero score impact on a score that was already at less than the maximum, that would be much more striking.  For example, your Fico 8 Bankcard score from Equifax of 887 (maximum of 900).  If that 887 failed to budge at a 75% individual util, that would mean a lot.


True - Buffer is a factor with my profile regarding Classic Fico 8. However, it did not prevet a score drop when my aggregate utiilization crept above 9% . Here's data from late 2016:

 

@EQ Classic Fico 8 = 850 @ 8.3% AG UT 

@Anonymous Classic Fico 8 = 845 @ 9.5% AG UT (was 848 before and 850 after)

@EX Classic Fico 8 = 850 @ 8.3% AG UT.

 

 TU score drop 10-2016.jpg

Discover Fico.jpg

* Negative reason code: Too many accounts (credit cards and loans) with balances suggest greater risk to lenders.

 

By comparison,  Discover card data on TU from 2014 shows Fico 8 Classic holding at 850 even though my BB card reported 75% utilization (AG UT was 6% rounded up). Buffer aside, this suggests an AG UT slightly above 9% influences score more than a single card UT at 75% with corresponding AG UT at 6%. If card UT had gone above 89%  (max out territory) I'm sure score would have dropped... to 835 or 840?

 

When my card reported at 75% UT I only had free access to TU Fico 8 Classic for checking scores regularly. Since tracking of EQ Fico 8 became available; I have reported balances on all my cards (and seen the impact). However, no card has been above 29% and AG UT has been maintained below 6%.

 

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 10 of 15
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