topic Re: Newbie questions about 1-9% utilization in Credit Cards

Newbie questions about 1-9% utilization

Anonymous — Fri, 17 Jan 2014 22:56:30 GMT

I understand that you should keep utilization at 1-9% for the best credit score. Is this with every card? Say you have 2 major credit cards and 2 store cards, do you want to keep utilization on the store cards? Does this mean keep a balance of 1-9% or use up to 9% and then PIF every month? At this point I will do whatever it takes to raise my score and if that means charging a light bulb to my Home Depot card every month I will do it but I am wondering if it is necessary. Should I keep a balance on at least one of my cards or PIF all cards?

The second part of my question is does your score raise for keeping low utilization over the course of time? Or once you pay down the balances it raises the most it will the following month?

TIA =)

Re: Newbie questions about 1-9% utilization

gdale6 — Fri, 17 Jan 2014 23:01:35 GMT

If you are going to apply for credit you want the 1-9% of one cards CL reporting all other cards paid off. The more cards that have balances the lower your FICO score will be as you get dinged for too many with balances. Utilization has no memory it is calculated on the spot when someone pulls a report.

Re: Newbie questions about 1-9% utilization

Anonymous — Fri, 17 Jan 2014 23:06:42 GMT

Okay, so if you are trying to get more credit, have only ONE card with a 1-9% balance, the rest showing zero balance. As far as maintaining the other cards, how often do you have to use them? Every few months and then pay off the balance right away?

Re: Newbie questions about 1-9% utilization

Anonymous — Fri, 17 Jan 2014 23:07:39 GMT

and you can use them for more than 1-9% as long as you pay it off immediately, right? I just want to get this right.

Re: Newbie questions about 1-9% utilization

Involver — Fri, 17 Jan 2014 23:45:32 GMT

Use the cards however you like. PIF 3/4 before statement cut and let thr fourth report between 1-9% util. Then PIF that card to avoid interest. Rinse, repeat.

Re: Newbie questions about 1-9% utilization

Anonymous — Fri, 17 Jan 2014 23:48:39 GMT

Thank you for the claification!

Re: Newbie questions about 1-9% utilization

Themanwhocan — Sat, 18 Jan 2014 00:49:12 GMT

My answer is posted here:

http://ficoforums.myfico.com/t5/Credit-Cards/How-do-I-play-the-1-9-Utilization-Game-Please-Help/m-p/2471295#M703454

Re: Newbie questions about 1-9% utilization

Anonymous — Sat, 18 Jan 2014 03:05:16 GMT

Thank you so much for your answer TheManwhocan, that is exactly what I wanted to know.

Re: Newbie questions about 1-9% utilization

Anonymous — Sat, 18 Jan 2014 03:31:06 GMT

@gdale6 wrote:
If you are going to apply for credit you want the 1-9% of one cards CL reporting all other cards paid off. The more cards that have balances the lower your FICO score will be as you get dinged for too many with balances. Utilization has no memory it is calculated on the spot when someone pulls a report.

That's good to hear. I want to apply for a CC after my statement closes and my UTIL will be 15%-ish. When they see my credit report, they cant see that my past 6 months were at 70% UTIL?

So basically my question is, I can apply right away after statement closes and shows 15% UTIL? Or should i wait a few more months to show that my UTIL is 15% at consecutive months and not just only 1 month?

My EQ FICO is 735, no baddies. Only UTIL was holding me back.

Re: Newbie questions about 1-9% utilization

red259 — Sat, 18 Jan 2014 06:33:57 GMT

Your score will be based on the current util. It doesn't matter what the util was the month before. No point in waiting as far as I can see. Just make sure you allow enough time for your CR to be updated with the new util rate.

Re: Newbie questions about 1-9% utilization

Revelate — Sat, 18 Jan 2014 09:46:43 GMT

@Anonymous wrote:
@gdale6 wrote:
If you are going to apply for credit you want the 1-9% of one cards CL reporting all other cards paid off. The more cards that have balances the lower your FICO score will be as you get dinged for too many with balances. Utilization has no memory it is calculated on the spot when someone pulls a report.
That's good to hear. I want to apply for a CC after my statement closes and my UTIL will be 15%-ish. When they see my credit report, they cant see that my past 6 months were at 70% UTIL?

So basically my question is, I can apply right away after statement closes and shows 15% UTIL? Or should i wait a few more months to show that my UTIL is 15% at consecutive months and not just only 1 month?

My EQ FICO is 735, no baddies. Only UTIL was holding me back.

FICO cannot, the lender doing the underwriting can but I don't see where that's a problem typically. Payments are reported on one's credit report for I believe all the bureaus now, and they can back-of-hand math the prior utilization numbers easily enough.

If they ask, just hand-wave and state you didn't know that having a balance on your credit cards hurt your credit score but now that you've done some research you're turning over a new leaf... blah blah blah.

You'll be fine.

Re: Newbie questions about 1-9% utilization

Anonymous — Sat, 18 Jan 2014 17:42:10 GMT

Sounds great! Thanks, all.