topic Re: Do more cards = better utilization %? in Credit Cards

Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 05:51:41 GMT

Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

Re: Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 05:56:06 GMT

I know this has been discussed several times here but I always seem to miss the thread, so I'm going to hang out for the answer on this one!

Re: Do more cards = better utilization %?

Mailak — Thu, 19 Jul 2012 06:01:47 GMT

@Anonymous wrote:
Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

Yes, but it is not more cards that are decreasing the utilization; it is rather the total available credit that affects it. You coud have one fewer card, a CL increase on the remaining two cards and still have a lower overall utilization.

Another additional card with a very low CL won't do much for lowering overall utilization.

Re: Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 06:10:09 GMT

@Mailak wrote:

It is rather the total available credit that affects it. You coud have one fewer card, a CL increase on the remaining two cards and still have a lower overall utilization.

Another additional card with a very low CL won't do much for lowering overall utilization.

Exactly! The TOTAL AVAILABLE credit. Keep that credit AVAILABLE rather than used up.

Re: Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 06:13:06 GMT

Does your credit score actually factor TOTAL overall?

Sweet I actually already had zero utilization but I just got that PenFed Platinum card with a 20k CL!

Re: Do more cards = better utilization %?

MarineVietVet — Thu, 19 Jul 2012 06:13:43 GMT

Also keep in mind that FICO scores:

* Overall utilization

* Individual account utilization

* Number of accounts reporting a balance at the same time.

Re: Do more cards = better utilization %?

BrokaToe — Thu, 19 Jul 2012 11:44:44 GMT

@MarineVietVet wrote:
Also keep in mind that FICO scores:

* Overall utilization
* Individual account utilization
* Number of accounts reporting a balance at the same time.

I think that helps to explain why I saw a 19 point drop on my EQ report after a new CC reported. Not only did it add a new TL, but reported with 8% Util, and decreased my AAoA a little bit. So even though my overall Util. went down, considering all the other factors associated with adding a new TL, my score actually saw a significant drop. Good thing is, I'll recover all those points within 6 months to a year.

Re: Do more cards = better utilization %?

SwiftTone — Thu, 19 Jul 2012 12:49:01 GMT

Paying your bills is the fastest and simplest way to improve(decrease) your utilization. You can also try to get CLIs to increase your available credit, but soemtimes thats tough with certain lenders.

You can improve/decrease your utilization by adding new available credit such getting new CCs, but then your AAoA gets lowered by the new accounts.

Re: Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 14:57:11 GMT

@BrokaToe wrote:
@MarineVietVet wrote:
Also keep in mind that FICO scores:

* Overall utilization
* Individual account utilization
* Number of accounts reporting a balance at the same time.

I think that helps to explain why I saw a 19 point drop on my EQ report after a new CC reported. Not only did it add a new TL, but reported with 8% Util, and decreased my AAoA a little bit. So even though my overall Util. went down, considering all the other factors associated with adding a new TL, my score actually saw a significant drop. Good thing is, I'll recover all those points within 6 months to a year.

Not quite true. You will still lose points from reduced aaoa but that will obviously get better over time.

Re: Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 16:18:02 GMT

@Anonymous wrote:
Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

No.

$3000 + ( 3 * 1000) = $6000 CL.

($1500 / $6000 ) = 25 % utilization

Many reply, few answer!

Re: Do more cards = better utilization %?

Walt_K — Thu, 19 Jul 2012 16:30:09 GMT

@Anonymous wrote:
@Anonymous wrote:
Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

No.

$3000 + ( 3 * 1000) = $6000 CL.

($1500 / $6000 ) = 25 % utilization

Many reply, few answer!

Pretty sure they meant $3000 + $1000 = $4000.

($1500/$4000) = 37.5%

Re: Do more cards = better utilization %?

Mailak — Thu, 19 Jul 2012 16:33:12 GMT

@Anonymous wrote:
@Anonymous wrote:
Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

No.

$3000 + ( 3 * 1000) = $6000 CL.

($1500 / $6000 ) = 25 % utilization

Many reply, few answer!

I think OP meant one extra card with $1000 CL.

Re: Do more cards = better utilization %?

CS800 — Thu, 19 Jul 2012 16:37:54 GMT

I would say higher CL's helps util

Re: Do more cards = better utilization %?

SwiftTone — Thu, 19 Jul 2012 16:41:21 GMT

@Anonymous wrote:
@Anonymous wrote:
Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

No.

$3000 + ( 3 * 1000) = $6000 CL.

($1500 / $6000 ) = 25 % utilization

Many reply, few answer!

He means total CL with the 3 cards combined is $3000. Example: 3 cards with $1000 CL each.

Re: Do more cards = better utilization %?

Anonymous — Thu, 19 Jul 2012 18:03:23 GMT

@Mailak wrote:
@Anonymous wrote:
@Anonymous wrote:
Example, you have 3 cards that have LOCs totaling $3000. Balances total $1500. so that's 50%. Keep the same balance but with an extra card with a limit of $1k. That should make your utilization about 37% correct?

No.

$3000 + ( 3 * 1000) = $6000 CL.

($1500 / $6000 ) = 25 % utilization

Many reply, few answer!

I think OP meant one extra card with $1000 CL.

I think I misread it.

$3000 + 1000 = $4000 CL.

($1500 / $4000 ) = 37.5% utilization