topic Re: how do creditors look at the balance of utilization> in Credit Cards

how do creditors look at the balance of utilization>

LindaLu — Wed, 14 Mar 2012 01:59:41 GMT

I am just wondering if when I apply for a credit card are they looking at my utlization as a total or do they look at the cards I currently have individually? I have like 3 cards with zero balance..one at like 20% but I have others at like 75%...my utilization on a whole is currently 37%....just wondering because it they look at the 37% even though it's not less than 10% like they say it should be 37 isn't too too bad..

the card I am wanting to apply for is a Barclay card by the way...that' might make a difference in my answers since they are so sensitive on utilization.

thanks for any advise

Re: how do creditors look at the balance of utilization>

haulingthescoreup — Wed, 14 Mar 2012 02:04:50 GMT

I don't think that anyone can say with certainty how lenders look at this. They vary greatly.

The FICO scoring formula looks at both.

Can you not get the balances/ util down on the other cards before you apply again? You're apt to get a much better deal.

Re: how do creditors look at the balance of utilization>

shane82388 — Wed, 14 Mar 2012 02:23:12 GMT

So its better to spread out balances among cards than have more reporting $0 balances?

Re: how do creditors look at the balance of utilization>

haulingthescoreup — Wed, 14 Mar 2012 02:27:44 GMT

@shane82388 wrote:
So its better to spread out balances among cards than have more reporting $0 balances?

No, I don't think so; certainly not for scoring purposes. For scoring, you want to have as few cards with balances as possible.

And as I said, when it comes to how balances "should" be distributed, I don't think that anyone can say with authority, "Lenders want ... ... ..." They vary too much.

The main thing is to get the balances down and then off, not move them here, there, and elsewhere. For instance, some lenders look askance at what appears to be continual balance transfers, doing little shell games to move debt around without ever actually reducing it. PenFed calls this "pyramiding debt."

Re: how do creditors look at the balance of utilization>

Anonymous — Wed, 14 Mar 2012 02:44:31 GMT

@shane82388 wrote:
So its better to spread out balances among cards than have more reporting $0 balances?

My understanding is that, for scoring purposes, it's best to have only one card report a small balance (less than 10%) and the remaining cards report zero balances.

Re: how do creditors look at the balance of utilization>

Anonymous — Wed, 14 Mar 2012 14:05:15 GMT

The 75% is high and may carry a score decrease. 90% is a big score decrease threshold for a single card although I am not sure where the other thresholds lie.

FICO reports will report you don't have a comfortable amount of open credit one one or more cards.

Re: how do creditors look at the balance of utilization>

shane82388 — Wed, 14 Mar 2012 07:10:36 GMT

theres a lot of conflicting info online about this....

spread it out....or zero balances more important.....ive been reading differnt articles all night lol.

Re: how do creditors look at the balance of utilization>

LS2982 — Wed, 14 Mar 2012 10:19:33 GMT

@shane82388 wrote:
theres a lot of conflicting info online about this....

spread it out....or zero balances more important.....ive been reading differnt articles all night lol.

The correct answer is all accounts are to be at $0 except one (preferrably a Bankcard visa/MC/AMEX/Disc.) with a small 1-9% balance. If you need to spread out you util, make sure no card is being utilized more than 10% of its CL (FICO scoring purposes)

Re: how do creditors look at the balance of utilization>

shane82388 — Wed, 14 Mar 2012 10:27:28 GMT

@LS2982 wrote:
@shane82388 wrote:
theres a lot of conflicting info online about this....

spread it out....or zero balances more important.....ive been reading differnt articles all night lol.
The correct answer is all accounts are to be at $0 except one (preferrably a Bankcard visa/MC/AMEX/Disc.) with a small 1-9% balance. If you need to spread out you util, make sure no card is being utilized more than 10% of its CL (FICO scoring purposes)

I have my computer with defered financing on my Apple Barclays card which is at about 40% on that card ATM...otherwise im going to pay off the couple hundred I have been letting sit on my Capital One card and ill have about a high 20's to about 30% utilization overall.

Just out of interest in the subject...say i had the computers balance on my barclays ($1492) and another $1000 on my Capital One (haha, yeah right with their limits) would it be smart to spread the capital one out evenly over three other cards (divide by 4 basically) or is the real factor in scoring on the overall utilizations?

obviously im asking in your experience personally because this seems to be up for debate across the internet as theres no hard an fast rule on whats the perfect distrbution of debt among cards, it seems.

Re: how do creditors look at the balance of utilization>

LS2982 — Wed, 14 Mar 2012 10:31:24 GMT

@shane82388 wrote:
@LS2982 wrote:
@shane82388 wrote:
theres a lot of conflicting info online about this....

spread it out....or zero balances more important.....ive been reading differnt articles all night lol.
The correct answer is all accounts are to be at $0 except one (preferrably a Bankcard visa/MC/AMEX/Disc.) with a small 1-9% balance. If you need to spread out you util, make sure no card is being utilized more than 10% of its CL (FICO scoring purposes)
I have my computer with defered financing on my Apple Barclays card which is at about 40% on that card ATM...otherwise im going to pay off the couple hundred I have been letting sit on my Capital One card and ill have about a high 20's to about 30% utilization overall.

Just out of interest in the subject...say i had the computers balance on my barclays ($1492) and another $1000 on my Capital One (haha, yeah right with their limits) would it be smart to spread the capital one out evenly over three other cards (divide by 4 basically) or is the real factor in scoring on the overall utilizations?

obviously im asking in your experience personally because this seems to be up for debate across the internet as theres no hard an fast rule on whats the perfect distrbution of debt among cards, it seems.

This is where the using 10% of a individual cards CL come into play. I would say it's not a smart move to have 1,000 on the Cap1 card. On the other hand it's not a good idea to have mutiple cards with balances. I would recommend carrying the balance on the Barclays card and having the rest report $0.

Re: how do creditors look at the balance of utilization>

shane82388 — Wed, 14 Mar 2012 10:32:53 GMT

@LS2982 wrote:
@shane82388 wrote:
@LS2982 wrote:
@shane82388 wrote:
theres a lot of conflicting info online about this....

spread it out....or zero balances more important.....ive been reading differnt articles all night lol.
The correct answer is all accounts are to be at $0 except one (preferrably a Bankcard visa/MC/AMEX/Disc.) with a small 1-9% balance. If you need to spread out you util, make sure no card is being utilized more than 10% of its CL (FICO scoring purposes)
I have my computer with defered financing on my Apple Barclays card which is at about 40% on that card ATM...otherwise im going to pay off the couple hundred I have been letting sit on my Capital One card and ill have about a high 20's to about 30% utilization overall.

Just out of interest in the subject...say i had the computers balance on my barclays ($1492) and another $1000 on my Capital One (haha, yeah right with their limits) would it be smart to spread the capital one out evenly over three other cards (divide by 4 basically) or is the real factor in scoring on the overall utilizations?

obviously im asking in your experience personally because this seems to be up for debate across the internet as theres no hard an fast rule on whats the perfect distrbution of debt among cards, it seems.
This is where the using 10% of a individual cards CL come into play. I would say it's not a smart move to have 1,000 on the Cap1 card. On the other hand it's not a good idea to have mutiple cards with balances. I would recommend carrying the balance on the Barclays card and having the rest report $0.

Ok so basically "steady as she goes" is my best bet....

Re: how do creditors look at the balance of utilization>

tcbofade — Wed, 14 Mar 2012 18:37:23 GMT

@Anonymous wrote:
...90% is a big score decrease threshold for a single card...

Hmmm.

Totally out of context, I'll grant you...but you bring an interesting question to mind...well, to MY mind anyway.

Let's justs say (hypothetically, of course) that some poor moron has 30 odd open credit card accounts.

Some have zero balance.

Some have 50%ish balance.

Some are maxed out. (90% plus...)

Overall util is somewhere around 57%

If this hypothetical person were to carefully adjust next months payments to ensure that NO card exceeded 90% usage, would that result in a score bump?

Just wondering.

For a friend.

Ummm, yeah.

Thoughts?