12-29-2012 09:11 PM
Wat is credit card utilization and how does it affect my score?
CC utilization is calculated by taking the balance and dividing it into the credit limit, expressed as a percentage. So, a $100 balance on a $300 CL CC is 33% util.
Utilization is big in FICO scoring. If you have a chance to pull your FICO report it'll list the top items that help or hurt your FICO. If one of the top neg. reasons is utilization, then you'll stand to see some large gains as util improves. Conversely, if util isn't listed as a negative item, then the gains are much less. Your mix of credit also has a play into that. Someone with 90% util going to 5% with only one CC won't see the same gains as someone with 90% util going to 5% across 5 CCs. IME, with a clean report I went from 89% util down to 1% and EQ FICO increased 125 points. TU also increased though by 80 or so.
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