Util 9% of available credit but also on an individual card???

[Varakai]

So, I know that to maximize FICO scoring you should never let your debt-to-credit ratio be more then 9%. I just paid everything down and now will be reporting 6% for December. That 6% is all on 1 card and the card balance is 33% of available credit.

In order to get the max FICO boost, should my card also report les then 9%???

[beb86]

you should pay all your card balances to 0 except for one card and that should have a very small balance like 2-3%  

[p-]

Lots of debate on that issue - and nobody really knows.  Maybe check your score at the current Utilization, then pay it down to bwetween 5-9 percent and see waht your score does. 

[JWatson0405]

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@Varakai wrote:

So, I know that to maximize FICO scoring you should never let your debt-to-credit ratio be more then 9%. I just paid everything down and now will be reporting 6% for December. That 6% is all on 1 card and the card balance is 33% of available credit.

In order to get the max FICO boost, should my card also report les then 9%???

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I was under the impression that while 6% overall utilization is good, 33% is still a bit higher than FICO likes for a single card's utilization.  I can't remember the sweet spot, but thought it was under 30%.  

[MarineVietVet]

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@Varakai wrote:

So, I know that to maximize FICO scoring you should never let your debt-to-credit ratio be more then 9%. I just paid everything down and now will be reporting 6% for December. That 6% is all on 1 card and the card balance is 33% of available credit.

In order to get the max FICO boost, should my card also report les then 9%???

---

I agree with p- that everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[wednesdayaddamsd]

The OP is asking if having over the 1-9% on "one individual card" is wrong? Versus total utilization among many cards, if I am understanding correctly. This is a question I've wondered myself.

If you have say, $10,000 in total credit, over four cards, your 9% would be $900.00.  Let's say you have one of your four cards that has just a $1,000 limit and you put the $900.00 on that $1,000 limit card.

Does this mean that FICO only scores you on the 9% of OVERALL utilization, or that it will ding you for having 90% of ONE credit card used?

thanks!

)

[MarineVietVet]

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@wednesdayaddamsd wrote:

The OP is asking if having over the 1-9% on "one individual card" is wrong? Versus total utilization among many cards, if I am understanding correctly. This is a question I've wondered myself.

If you have say, $10,000 in total credit, over four cards, your 9% would be $900.00.  Let's say you have one of your four cards that has just a $1,000 limit and you put the $900.00 on that $1,000 limit card.

Does this mean that FICO only scores you on the 9% of OVERALL utilization, or that it will ding you for having 90% of ONE credit card used?

thanks!

)

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Both overall and individual utilization are scored. So you need to try and manage each of them.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[p-]

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@MarineVietVet wrote:

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@wednesdayaddamsd wrote:

The OP is asking if having over the 1-9% on "one individual card" is wrong? Versus total utilization among many cards, if I am understanding correctly. This is a question I've wondered myself.

If you have say, $10,000 in total credit, over four cards, your 9% would be $900.00.  Let's say you have one of your four cards that has just a $1,000 limit and you put the $900.00 on that $1,000 limit card.

Does this mean that FICO only scores you on the 9% of OVERALL utilization, or that it will ding you for having 90% of ONE credit card used?

thanks!

)

---

Both overall and individual utilization are scored. So you need to try and manage each of them.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

---

Why not just use the highest limit card?  Then if you are 5-9 on that you'll be in good shape overall.

[RobertEG]

That appears to be the reason that FICO scores both overall % util and individidual card utilizations.  To pick up the greater risk on high util cards.

As utilization increases, so does negative impact.  If all utils were scored on the same linear scale, then it would make no difference.  If they average to the same numer, a high util card must be offset by a low util card.  However, if % uti is scored on a non-linear scale, meaning that higher utilization hurts more proportionally as util goes up, then a high util vs low util card that averge to the same util when scored for overall % util would not produce the same results when looked at individually, and summed together.    For example, a 80%20% split would score the same overall as a 50%/50% split, but due to the proportionally higher impact of the 80% card, they would not, when scored individually and combined, produce the same impact as if scored each at 50%.   That appears to me to be the reason for considering both overall and individ card utils.