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twt11
Posts: 102
Registered: ‎09-24-2007
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Utilization Calculation Used for Scoring

Does anyone know exactly how the utilization is used in the scores?  For instance does it just look at the TOTAL credit limit compared to TOTAL balance or does it look at each card individually?  I'm trying to pay off cards and I'm not sure if it would be more beneficial to take the money and spread out evenly on all cards to get the balances off of the limits or just pay it all towards one card to pay it off and then move on to the next.  My main interest right now is just to improve my score the fastest.  Thanks!
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haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Utilization Calculation Used for Scoring

It looks at both: total utilization of all your revolving credit, and utilization on each individual card. I believe that the advice I've seen says to first get each card under 50% (or 30%, or 10%), and then go after individual cards further. Once you've gotten overall util down, then there are lots of arguments as to whether to knock down the cards with the smallest balances first, so as to reduce the number of cards with balances above 9%, or go after the highest interest card, in order to save wasted interest expense.

But your revolving credit usage is being evaluated both ways: how much of your overall CL you've used up, and how well each card is paid down to the magic 1-9%.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

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