topic Re: Credit utilization % and scores in Understanding FICO® Scoring

Credit utilization % and scores

Anonymous — Fri, 05 May 2017 21:20:39 GMT

I have a question regarding credit utilization and credit score

If I have a card that has a 2000 limit and it is currently maxed at 100% utilization - yes I know its bad to do that

Where will I see the jumps in Credit score..

Like will it go up a few points at 90 % then again at 80% or 75% then again at 50% - this may be a gradual process for me...but hoping to watch the score increase over time

Thanks in advance for taking the time to respond....

Shannon

Re: Credit utilization % and scores

Anonymous — Fri, 05 May 2017 21:57:20 GMT

It may go up a few points everytime it reports if it's less than it was last time it reported. The nerdwallet simulator says I would gain 59 fako points if I paid my balances down by half. 62 points if I paid the whole $5000 (across cards).

Re: Credit utilization % and scores

mortimerwereback — Fri, 05 May 2017 22:32:57 GMT

Depends which bureau. As long as the current reported balance is less than the previously reported, you should see a small point increase. I don't tend to see the fluctuations with TU, but I do see them with EQ and EX.

Re: Credit utilization % and scores

rmduhon — Fri, 05 May 2017 23:17:42 GMT

Try to get it to 89%, 79%, 69%, and so on. That 'extra' 1% will give more of a boost than if it was 90%, 80%, etc.

Re: Credit utilization % and scores

Anonymous — Fri, 05 May 2017 23:50:36 GMT

Thank you!

Very helpful!

Shannon

Re: Credit utilization % and scores

SouthJamaica — Sat, 06 May 2017 02:24:22 GMT

@Anonymous wrote:
Thank you!

Very helpful!

Shannon

The only one I'm absolutely sure about, from personal experience, is 29% on individual card utilization. But it's my understanding that 79% is a biggie.

Re: Credit utilization % and scores

tcbofade — Sat, 06 May 2017 02:55:26 GMT

Not sure where ALL of the lines are, but I do know there is one at 89% and one at 49%.

The scoring difference between 89% and 90% is significant.

Re: Credit utilization % and scores

HeavenOhio — Sat, 06 May 2017 07:27:50 GMT

Keep in mind that percentages round up. To reach 89%, 49%, 29%, 9%, etc., you need to be at 88.9% or below, 48.9% or below, 28.9% or below, 8.9% or below, etc. As an example, 9.000001% rounds up to 10%.

Re: Credit utilization % and scores

Thomas_Thumb — Sat, 06 May 2017 13:27:12 GMT

From observation and 3rd party credit report summaries I would peg Fico revolving credit utilization thresholds at:

1) 89% (above this level is tagged as a max out)

2) 69%

3) 49%

4) 29% (below this is typically considered "responsible" credit management)

5) 9% (below this is described as "optimal" from a score perspective)

Some thresholds are more important for aggregate utilization - crossing above the 9% threshold on aggregate impacts score quite a bit but is a non event for an individual card. Crossing above 89% for an individual card into max out territory may have a big impact on score unless you already have a card at that level. On an individual card basis, Fico looks considers highest utilization of any card in scoring, not directly # cards at that level. The affect of multiple cards at high UT% is captured by their combined effect on aggregate utilization.

Re: Credit utilization % and scores

Anonymous — Sun, 07 May 2017 00:56:52 GMT

Good post from TT above where he lists the different threshold percentages. It's important to remember that crossing those thresholds are what yields score changes... not the amount of dollars or even percentage points that you drop. For example, dropping from 51% utilization to 48% utilization is going to yield a greater score increase than dropping from 46% utilization to 30% utilization even though in the second example on on the same profile you'd be paying off more than 5X the amount as in the first example... all because a threshold is crossed in the first but not the second.