Understanding FICO® Scoring

[tcbofade]

I have learned SO much from these forums...mostly on the credit card threads, but lots here as well.

I'm just starting what looks to be a 30 dayish "science" experiment...because I CAN, and I WANT to....

While I have always known that "high utilization" is a bad thing, I've only recently discovered just how many slices that gets cut into and how it applies...

...for instance...

DW's util is somewhere around 38%....not terrible, but not great, I know.

What I didn't know (until recently) is that because some of her accounts are at 0 balance, and some are "maxed out" her score suffers for THAT as well...

she has 12 accounts solely in her name, and we have 7 that are joint...in other words, she has 19 credit card accounts reporting on her credit report.

Four of them have a zero balance. Eight of them are "maxed out"  (over 80% util.)

(The rest are somewhere in between, and three of THOSE have zero percent interest...)

Over the next 30 days, I'll be changing where I send dollars to make sure that NONE of her cards are reporting over 80% on 21 July.  (One of the statements just cut today...oops.)

Assuming that her total utilization stays roughly the same, it may drop slightly...how many points do you think she can gain by having NO accounts over 80%?

I am interested in others opinions, and will report the results as soon as I have them. 

[llecs]

If the goal is to get 80%+ utilized CCs below 80%, what will her overall util be after the changes? Are any of them over 100%?

[tcbofade]

roughly 32%, and no...none of them are currently over 100%

[llecs]

If she's going from 38% to 32%, I can't foresee too much of a gain. Maybe a few tops.

[cassembler]

As per llecs' comment above, actual score gain will probably be minimal...

As a side note, I'd definitely be more focused on dropping the collective balances; managing 18+ accounts sounds like more trouble than it's worth, esp. if there are any AFs and what not. But, 38% util overall is not too awful, sounds like you've got it covered.

[RobertEG]

I think your plan of attacking the highest % util cards is right on point, at least from a FICO perspective.

Higher utils are scored proportionally higher, but aside from the "today" aspect, keeping cards at high utils is apt to cause some risk hearburn over at the CCCs.

They may result in an eventual credit limit decrease, making it much harder to keep overall and indiviv card % utils down.

[tcbofade]

Thank you all for your input, I do appreciate it, but now I'm confused...

I could be mistaken here, so please feel free to set me straight...I thought that having ONE credit card report over 80% hurts your credit score, and that having MORE than ONE report over 80% hurt your score worse...

Thus, I believed that making certain that NO cards report over 80% would remove two "dings" and improve her score.

Am I mistaken in there somewhere?

As for juggling accounts, I'm really pretty good at it, and it doesn't stress me out...

DW says THAT is scary....lol.... 

[llecs]

IMO and IME, 80% isn't a magic number. It's no better off at 81% vs. 79%. FICO does look at individual util, but overall seems to pull a lot mor eprovided an individual card isn't over 100%.

[tcbofade]

Thank you again.  I've already got the ball rolling so to speak, so methinks that I'll continue with it and see what happens.

It can't hurt.

[llecs]

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tcbofade wrote:

It can't hurt.

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Exactly. And I should have stressed that more.