topic Re: Difference between 7% and 1% util? in Credit Cards

Difference between 7% and 1% util?

528491 — Sun, 09 Jun 2013 21:18:39 GMT

Apologies if this has been answered before, but I couldn't find a clear answer.

Is there a noticeable score difference between having 1% utilization or 7%? I ask this because I have a $500 reported balance on one of my cards with no balance on any of my other cards, bringing my total utilization to about 7%. I want to go ahead and apply for another card, but I don't know if I should wait until my statement cuts with a $5 balance or if it's totally fine to app now.

Re: Difference between 7% and 1% util?

Anonymous — Sun, 09 Jun 2013 21:23:03 GMT

I don't think it makes a difference.

Re: Difference between 7% and 1% util?

ztnjpv — Sun, 09 Jun 2013 21:26:38 GMT

Negligible difference if any. I have personally noticed a difference from month to month when my utlilization dropped from near 10% or over 10% to near 1%. problem there is that other little things can change from month to month. Perhaps I hit an AAoA threshold that made the perceived change in score more pronounced. Hard to say. All I can say for sure is that the idea of 1-15% being the same is hogwash.

Re: Difference between 7% and 1% util?

b_seeker — Sun, 09 Jun 2013 21:26:58 GMT

That difference shouldn't matter for apping purposes as far as utilization matters. I'm assuming you have more cards than showing in your sig though because I'm not getting 7% on a $500 balance from that.

Re: Difference between 7% and 1% util?

LS2982 — Sun, 09 Jun 2013 21:42:42 GMT

1% or 7% I wouldn't worry about it your in good range for a app or two.

Re: Difference between 7% and 1% util?

red259 — Sun, 09 Jun 2013 21:46:40 GMT

Is there such a thing as too little utilization? I know if you are at 0% it hurts you, but what if I let something like a few dollars balance report and my utilization was .5% or something greater than zero but not quite 1%. Anyone ever have this? Would it get rounded down to zero?

Re: Difference between 7% and 1% util?

LS2982 — Sun, 09 Jun 2013 21:47:26 GMT

@red259 wrote:
Is there such a thing as too little utilization? I know if you are at 0% it hurts you, but what if I let something like a few dollars balance report and my utilization was .5% or something greater than zero but not quite 1%. Anyone ever have this? Would it get rounded down to zero?

I'd have it at least over 3%.

Re: Difference between 7% and 1% util?

red259 — Sun, 09 Jun 2013 21:50:18 GMT

You know until last week I had never even heard of credit utilization! This forum has been extremely beneficial in helping me learn about how my credit works.

Re: Difference between 7% and 1% util?

528491 — Sun, 09 Jun 2013 21:57:08 GMT

@b_seeker wrote:
That difference shouldn't matter for apping purposes as far as utilization matters. I'm assuming you have more cards than showing in your sig though because I'm not getting 7% on a $500 balance from that.

Yep, I'm also an AU on a card with a $5000 limit.

Another question: My $500 balance is on a $1500 limit card. So my util on that card is 33%. Is that an issue, or does only the total util matter?

Re: Difference between 7% and 1% util?

Rhaeny — Sun, 09 Jun 2013 21:59:10 GMT

@red259 wrote:
You know until last week I had never even heard of credit utilization! This forum has been extremely beneficial in helping me learn about how my credit works.

Everyone's credit profile is different, so the only utili percentage that matters is what makes your own move. This you will have to test out to see. It seems that mine takes a ding at under 5% so go figure that one..LOL. Anywhere from 10% to 20% it is only neglible. At 25% is when I take a dip ( I have seen a 25pt drop). So test out your own to see how well you fair.

Re: Difference between 7% and 1% util?

ztnjpv — Sun, 09 Jun 2013 22:01:12 GMT

red259,

Yes,. Having absolutely ZERO utlization will lower your score a little. So yes, if you have $1 total balances on your cards, that will give you a better score than ZERO...not even a penny.

Re: Difference between 7% and 1% util?

Rhaeny — Sun, 09 Jun 2013 22:01:14 GMT

@528491 wrote:
@b_seeker wrote:
That difference shouldn't matter for apping purposes as far as utilization matters. I'm assuming you have more cards than showing in your sig though because I'm not getting 7% on a $500 balance from that.
Yep, I'm also an AU on a card with a $5000 limit.
Another question: My $500 balance is on a $1500 limit card. So my util on that card is 33%. Is that an issue, or does only the total util matter?

It is calculated on both individual card balances AND overall balances vs overall CL. You could take a big ding on any one card over 50% and a bigger ding at close to max.

Re: Difference between 7% and 1% util?

528491 — Sun, 09 Jun 2013 22:06:56 GMT

OK, so do you think I should wait until that card drops to 1%? Or is 33% not an issue?

Re: Difference between 7% and 1% util?

Rhaeny — Sun, 09 Jun 2013 23:04:45 GMT

@528491 wrote:
OK, so do you think I should wait until that card drops to 1%? Or is 33% not an issue?

The difference between overall 1% or 7% is probably not a big deal because with either of them I don't think that a creditor is concerned about the overall being in those ranges. However 33% is high to have on one card when you're trying to app. I would get that one card down to 10% or less before I app. And again, you're spinning your wheels worrying about the difference between 1 or 7% util becasue for most people, anything below 10% is good.

Re: Difference between 7% and 1% util?

528491 — Sun, 09 Jun 2013 23:22:15 GMT

All right - in that case, I'll just make sure the statement cuts with ~$100 balance this month.

Thanks!

Re: Difference between 7% and 1% util?

Anonymous — Sun, 09 Jun 2013 23:39:45 GMT

1-7% can mean a huge difference. Personally mine has gained 20 points just from going from 7% to 1% this month alone.

Re: Difference between 7% and 1% util?

Rhaeny — Sun, 09 Jun 2013 23:52:35 GMT

@Anonymous wrote:
1-7% can mean a huge difference. Personally mine has gained 20 points just from going from 7% to 1% this month alone.

True, it CAN be a huge difference, however all of our credit profiles are different, i.e AAoA, number of CC's with balances, number of CC's with excessively high util, number of baddies if any, etc. So that is why I stated that YOU need to test out YOUR OWN credit profile to know what util percentages affect YOU the most. It is not a one size fits all.