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New Member
Posts: 14
Registered: ‎03-15-2017
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Re: What actually is the "sweet spot"?

Now this I have not heard. What is a scoring step? I Googled it and didn't come up with much...

 

Thank you for the advice! I'll definitely check it out!

 

To be honest, I spend minimal. I have most of the bills everyone has (besides a massive rent), but  as odd as it sounds I have savings. I'll definitely check into it!

 

Haha, thank you!

New Member
Posts: 14
Registered: ‎03-15-2017
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Re: What actually is the "sweet spot"?

Do you think you could please show me the Alliant SSL thread? I can't find it...

Established Contributor
Posts: 760
Registered: ‎04-14-2016
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Re: What actually is the "sweet spot"?


Taggerung wrote:

Do you think you could please show me the Alliant SSL thread? I can't find it...


Yes, yes we can!






BK7 Discharged 4/27/2016 - Fico 8 as of 03/23/2017: EX 674 / TU 668 / EQ 681 - Follow my Journey Here
Valued Contributor
Posts: 4,263
Registered: ‎04-11-2016

Re: What actually is the "sweet spot"?

OP, 9% is simply the higher limit of a FICO scoring threshold with respect to utilization.

 

1%-9% is optimal.  Then comes 10%-29%, then 30%-49%, etc.

 

Every "step" from one threshold to the next results in a scoring change.  It's based on crossing a threshold, not a percentage of change.

 

For example, one would see a greater scoring increase dropping their utilization from 11% to 8% than from dropping their utilization from 48% to 33%.  Why?  Because in dropping from 11% to 8% you cross a threshold.  Dropping from 48% to 33% constitutes a paydown in dollars of 5X more which would seem like it would yield a greater score boost, but that is not the case as no threshold is crossed.  Hopefully this makes sense.

 

You say you use your debit card for a lot.  Consider using your credit card instead (for all you use your debit card for) and just paying the card of with your checking account.  You could literally pay the card every day if you wanted to in order to treat it the same way you would your debit card, but obviously that isn't necessary.  In time when your credit builds you'll likely acquire some cash back cards which, if used [as opposed to your debit card] will be giving you back free money.  So, it could be a good practice/habit to get into now flowing dollars through your credit card rather than your debit card.  Also in doing this you are showing your credit card company more usage and responsible credit behavior which could prompt them to better your terms (higher credit limit, lower APR, etc) or prompt them to offer you a newer, better product. 

 

As long as you are using your credit, making on-time payments (PIF is always best) and keeping your utilization in the single-digits, you will have a score in the 700's and be looking just fine for when it comes time to job hunt.  I agree also with whoever above suggested the SSL technique as it's an easy way to add 30 points to your score and keep them for a good 5 years.

New Member
Posts: 14
Registered: ‎03-15-2017
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Re: What actually is the "sweet spot"?

Thank you so, so much! I truly appreciate all of your help guys!

 

I was thinking the same thing about the cash back BrutalBodyShots. I'm definitely going to do that and I will look into the installment loans. Thank you guys!

Valued Contributor
Posts: 1,083
Registered: ‎03-23-2014

Re: What actually is the "sweet spot"?


TygerHawke wrote:

Taggerung wrote:

I'll be honest, I didn't even know you could make multiple payments.

 

Is this more of a good habit or will help build good credit? I do understand the synonymity, but honestly I just need to build good credit as quickly as possible.

I really don't even need a credit card. I've payed for every major purchase myself since 17. But I've either done it on a payment plan without credit history or payed it in cash.


In your case then - put a small autopay bill (Netflix?) on the card, setup automatic payment for balance in-full from your checking account, and forget about it


I honestly do not recommend autopay.  For one reason, it does not get a person into the habit of paying on time, simply because it is automatic.  Taggerung, until you are in the habit of paying your credit card in full every month, I recommend you manually pay it.

February 2017 Scores - EQ 831 | TU 808 | EX 801 | ~~Started Gardening Again on January 14, 2017
Established Contributor
Posts: 1,028
Registered: ‎08-12-2012
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Re: What actually is the "sweet spot"?


Taggerung wrote:

I just received my first credit card. After seeing my siblings and family struggle and have to deal with bad credit, I decided I'll be nothing like them.  I'm not much of a spender anyway.

I don't know any credit analysts and have gotten a few answers in person and online, so I decided to come here.

I've heard that 30% of your credit line is the sweet spot for optimal credit. I've also heard that 25% is. I want the best credit possible as soon as possible. What really is the sweet spot for optimal credit?


In order to answer your question as best as my understanding we need to consider what the score represents. The Fico 08 score range that reports is 300-850...do you ever wonder why it starts at 300 rather than 0. Well it is my understanding that the only reason you can not score under 300 is that even though you may actually have only enough points to score 200, the lowest that fico will report is 300, so if you had 200 points it might take a bit of time to get above 300 and actually start seeing an increase. My understanding is that there is enough points to actually score over 850 also...but likewise FICO nerds decided they would only report 850...even if you actually had say 900 points! So if you had over 850, you could probably have an inquiry and still have over the pre-determined 850 points. Now how much over 850 points there is I do not know. Now people on this forum say at least 3 cards and 1 installment loan 9% utilization overall, and no single card over 30% is optimal. I do believe this to be about right, but I also know some who have went over these optimal limits and still had an 850 credit score. Fico scoring is a proprietary system, so no one knows for sure how many points are actually there. I would be interested in hearing from someone else if my understanding is wrong.



TU fico08=817 3/24/17
EX fico08=809 3/24/17
EQ fico08=818 3/24/17
In the Garden until 2/11/2017
Garden since 8/11/2016


















Valued Contributor
Posts: 1,083
Registered: ‎03-23-2014
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Re: What actually is the "sweet spot"?

[ Edited ]

Taggerung wrote:

Thank you for replying!

To be perfectly honest, I am so confused about the utilization. Just because a banker told me 33%, a man on creditcards.com (http://www.creditcards.com/credit-card-news/credit-utilization-30-percent-rule-myth-1586.php) says 25%, you say 9%, some people say 20%, and so much more. This site says the 30% is a myth (http://www.creditscoring.com/myths/utilization-ratio/fair-isaac.html). It seems like it's 100% subjective. :/ But there must be objectivity in it somewhere. 

I have $750 credit line. I don't truly even need a credit card. I always pay everything with my debit card and I'm normally fine. I just need to build credit and build it fast. I'll graduate with my IE degree in 2019 and I need to have good credit for an engineering job. :/

 

I guess the truth would lie with the people who invented the new scoring or the people with 800+ scores.

 


I know from my own personal experience that using a debit card does not build a credit rating/score.  My suggestion is to use your credit card to pay for everything that you can, then pay it in full a couple of days before it is due.  This is what builds up "credit fast."

February 2017 Scores - EQ 831 | TU 808 | EX 801 | ~~Started Gardening Again on January 14, 2017
New Member
Posts: 14
Registered: ‎03-15-2017

Re: What actually is the "sweet spot"?

Thank you so much for replying Sarge12! 

And I definitely had no idea of that. That's incredibly interesting. Kind of sad in a way too.

I really wanted to know from someone who is at the very top of it all.

Do you have any advice for someone who is beginning credit? Or for someone very young...

Established Contributor
Posts: 1,028
Registered: ‎08-12-2012
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Re: What actually is the "sweet spot"?


Taggerung wrote:

Thank you so much for replying Sarge12! 

And I definitely had no idea of that. That's incredibly interesting. Kind of sad in a way too.

I really wanted to know from someone who is at the very top of it all.

Do you have any advice for someone who is beginning credit? Or for someone very young...


Then you need to search for Thomas_Thumb...he just may be the most knowlegable here...and his scores have been 850 for a long time.



TU fico08=817 3/24/17
EX fico08=809 3/24/17
EQ fico08=818 3/24/17
In the Garden until 2/11/2017
Garden since 8/11/2016


















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