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Posts: 157
Registered: ‎03-05-2012
Re: Utilization ratio question

VendingKing1 wrote:
I'm newer, and I don't understand the utilization portion of scoring. I have a few cards, and about 14,000 in available revolving credit. One of the cards is a furniture store card, that has a 3000 limit and we bought a set that cost 4500, so we used the available limit on the card and paid the rest. So I'm using 100% of the balance ON THAT CARD, but overall I'm just using 20%{+\-} of my balance....how does that affect me? Does it score each card as how much is utilized or your total available? Thanks for helping it you can!

FICO does give some score wieght to each cards individual utilization and to your revolving utilization in total. Some of the things I have found in monitoring my score over the years is that your score will get dinged for a variety of reasons: a) if you have a "maxed out" credit card (usually 90%+ UTIL), b)if you have balances reporting on more than 50% of your accounts, and c) if you have too many new accounts.  Other notes - my scores improved when UTIL on an individiual card dropped below 50%, then again when below 30% and also at 10%. For Total Utilization, I have seen similar results with the optimum score being at 9% or lower with only 1 or 2 cards reporting balances.   Hope this helps 

FICO: EQ 769, TU 762 , EX ???