topic Re: What is the perrect utilization? in Understanding FICO® Scoring

What is the perrect utilization?

Jaymes — Tue, 09 Dec 2025 07:28:16 GMT

I looked and I'm not coming up with anything, so excuse me for what should be an obvious question. I'm about to apply for a mortgage. My mortgage scores are above where I believe I need them to get the best rates (I think). In any event, I have a slew of cards that are about to re-report, most of them being no acitivity for the month and zero balances. But this past month my scores have gone down a few points when the only difference is a reporting balance is lower than the previous month. I typically have overall balance to overall limites at 1-2 percent. (I have an AMEX platinum that might screw things up a few points). With the upcoming monthly reporting, I would like to get my scores up as much as possible, if even only a few points from where they are now. And the only thing I have control over is reporing balances.

So how exactly to I get there? Is it best to be at one only one or two cards reporting a balance? Below 1 percent total? Above 1% but less than 2%? (I really don't get why my scores would drop for having a lower balance!)

Thanks in advnace for any guidance.

Re: What is the perrect utilization?

JoeRockhead — Tue, 09 Dec 2025 10:26:23 GMT

For optimum scores:

Individual cards between 1% and 5%. Aggregate reported utilization under 9%. No more than 50% of revolving accounts reporting, Charge cards don't count in any of this.

If you're an AU on any cards, all zero balances should be avoided.

Re: What is the perrect utilization?

Thomas_Thumb — Tue, 09 Dec 2025 15:09:47 GMT

@Jaymes wrote:
I looked and I'm not coming up with anything, so excuse me for what should be an obvious question. I'm about to apply for a mortgage. My mortgage scores are above where I believe I need them to get the best rates (I think). In any event, I have a slew of cards that are about to re-report, most of them being no acitivity for the month and zero balances. But this past month my scores have gone down a few points when the only difference is a reporting balance is lower than the previous month. I typically have overall balance to overall limites at 1-2 percent. (I have an AMEX platinum that might screw things up a few points). With the upcoming monthly reporting, I would like to get my scores up as much as possible, if even only a few points from where they are now. And the only thing I have control over is reporing balances.

So how exactly to I get there? Is it best to be at one only one or two cards reporting a balance? Below 1 percent total? Above 1% but less than 2%? (I really don't get why my scores would drop for having a lower balance!)

Thanks in advnace for any guidance.

Optimal revolving utilization is:

1. Aggregate utilization under 5%

2. Individual card utilization(s) under 9%.

3. If you have only one revolving credit card, it needs to report a balance. This will avoid the "no recent revolving activity penalty". That penalty is often 15-20 points. AMEX charge cards are not considered revolving accounts. So, if only your AMEX card reports a balance, your score will be penalized for "no recent revolving activity".

4. Multiple cards reporting even small balances can hurt score particularly if it is more than 50% reporting - unless you only have one card. Charge cards are always included in count. AU accounts are included in total count with Fico 5/4/2.

5. The old Fico 5/4/2 mortgage scores do look at AMEX charge card utilization. The card's utilization is based on current balance (CB)/ high balance (HB). The card HB will show on your credit report - it is the highest monthly balance ever reported.

6. The old 5/4/2 mortgage Ficos also look at AU accounts the same as a primary account. So, such accounts will influence aggregate utilization and be evaluated on an individual card basis. The AU accounts do not factor into Fico 8 and later model utilization.

* For optimal mortgage score I would recommend not having your AMEX or any AU accounts report balances. Limit cards reporting to personal revolvers. Report small balances (under 9% UT) on 1 or 2 cards only.

** what is your AMEX high balance (HB) and what is a typical monthly reporting balance?

Re: What is the perrect utilization?

BrutalBodyShots — Tue, 09 Dec 2025 16:44:58 GMT

Hey there @Thomas_Thumb , long time no talk! Completely off topic before I forget, a question I've been meaning to ask you for years, did you ever achieve > 892 on EQ BCE8? I've always been of the opinion that a perfect 900 there isn't possible, but I'd like to be proven wrong

On the subject being discussed here as far as optimal utilization for scoring purposes, do you ever mention raw dollars (which we know can result in a scoring penalty) in addition to utilization percentage?

Re: What is the perrect utilization?

Thomas_Thumb — Tue, 09 Dec 2025 22:39:28 GMT

@BrutalBodyShots

Yes, I occasionally do mention that Fico looks at total balance as a scoring factor independent of utilization. Unfortunately that is ignored by most readers as being inconsequential or untrue. Admittedly aggregate $ reporting carries much less weight than aggregate utilization - but it IS a factor. The fact that we have no good threshold levels for $ reporting certainly limits its consideration in score optimization strategies.

My BCE Fico 8 never exceeded 892. However, I fell from grace back in 11/2020 when my only open loan, a mortgage, closed. My scores have suffered since then. The only thread focused toward industry option 900 scores was Trudy's 900 club thread. The discussion was closed a few years back. Limited data due to lack of contributors but worth re-visiting.

Perhaps a new "industry option" thread could garner more data on these often overlooked Fico scores.

Re: What is the perrect utilization?

BrutalBodyShots — Tue, 09 Dec 2025 22:49:23 GMT

@Thomas_Thumb.

Gotcha, so your sig scores are basically your high point scores (with an open "significantly paid down" installment loan) not what they currently are today.

So 892 was the highest you saw on EQ BCE8. That's the same for me. I think the last we spoke about this some 5+ years ago at the time you hadn't heard of anyone exceeding that number for that version. Is that still the case today?

I'm surprised that raw dollar thresholds aren't referenced more, especially with high TCL files. I remember debating this subject years ago with SJ on here, where with his [then] $500k+ TCL file he was convinced that utilization threshold points existed at 1% increments. I explained to him that for his profile, 1% represented $5k, and $5k in raw dollars of movement equated to a threshold crossed for raw dollars. He never wanted to consider that as an option though.

I've identified raw dollar thresholds in the vacinity of $2k, $5k and $10k on my clean/thick/mature file. To your point, they are rather minor in terms of FICO scoring impact; 3-4 points typically. I just think it's an important metric to reference when talking optimized scores that it isn't just about utilization percentage... especially with higher TCL files.

I also have only tested raw dollars related to FICO 8. It wouldn't surprise me in the least if they were more meaningful/impactful with 2/4/5.

Re: What is the perrect utilization?

Thomas_Thumb — Tue, 09 Dec 2025 23:15:13 GMT

Yes, those are my high point scores from before my mortgage closed. I don't update them. I stopped getting 3B reports after 2020. I now rely on Fico scores thru credit cards and banking accounts.

As far as BCE scores are concerned my 900s were most stable when I had more total accounts on file open + closed. At that time my mortgage had a B/L ratio of 30% or so. It was my only open loan. As the loan was paid down further (20% =>10% => 5% => 2%) it had NO positive effect on score. My scores actually weakened - due to accounts aging off my report. Mortgage loan B/L ratio (utilization) can be quite high without hurting score. Length of ontime payment history is key for mortgages - imo.

Without an open loan I can still get EX Fico 8 and Fico 9 850s but max out in the low/mid 840s on EQ and TU.

Re: What is the perrect utilization?

JamesS84 — Tue, 09 Dec 2025 23:41:04 GMT

My understanding is that 1% to 9% utilization is ideal for your score, and 0% is the next best thing. Anything under 30% is fine though.

Re: What is the perrect utilization?

BrutalBodyShots — Wed, 10 Dec 2025 00:26:55 GMT

@JamesS84, while 1%-9% may be ideal, it's also worth considering (FICO scoring does) the raw dollars of debt associated with those percentages. On a high TCL file, even 1% utilization can result in a FICO scoring penalty. For absolute optimization for any file, regardless of TCL, a small balance ($5-$10 is fine) on one card (AZEO) will yield the best possible result.

Typically the penalty for 0% utilization ("no recent revolving credit use") of 15-20 points is right on par with the penalty for aggregate utilization crossing the first (9.5%) threshold point... so in terms of scoring, someone at 0% verses (say) 15% utilization will likely have roughly the same score.

As far as anything under 30% being "fine" I'm not sure I follow you. Fine in terms of what, and why 30%? In terms of optimized scores which it seems OP is after, under 30% doesn't achieve that. Maybe you're talking about risk? If that's what you mean, it's not about utilization percentage so much as how one pays their credit cards monthly... Transactor vs Revolver behavior.

Re: What is the perrect utilization?

Thomas_Thumb — Wed, 10 Dec 2025 00:42:45 GMT

For revolving utilization a significant number of members have reported a score drop when aggregate UT exceeded 5%. I don't see a score drop at 5% with aggregate UT but do see one when 9% is exceeded.

In reality Fico views 0% UT as ideal for the utilization factor.

Fico penalizes score for "no recent revolving activity". Unfortunately, the algorithm interpruts revolving accounts reporting $0 (up to $5 in some cases) as no account activity. So, although 0% AG UT is ideal, a score penalty is assessed because Fico flagged the profile as having no revolving activity.

Re: What is the perrect utilization?

BrutalBodyShots — Wed, 10 Dec 2025 00:54:43 GMT

On what scorecards have you seen it reported that 5% aggregate utilization is a threshold point? I've never seen it personally and you haven't, so definitely not clean/thick/mature files, whether New Revolver or No New Revolver. I'd like to know where those data points are being seen. Maybe dirty files? I'd also circle back to raw dollars of debt on that front, as ~5% utilization on some files could naturally correlate with the first raw dollars threshold being arrived at. Since people typically don't look at the dollars (as was the case with SJ), they would assume utilization percentage.

Re: What is the perrect utilization?

Thomas_Thumb — Wed, 10 Dec 2025 01:17:27 GMT

There are numerous posts of young/thin files observing score drops around 5%. CassieCard was a prolific poster who provided personal data on this. Other posters have provided similar results in recent years. Thin and young may both play a role to increased sensitivity at low utilization levels. These profiles had relatively low aggregate CL so, unlike SJ, it appears doubtful aggregate balance thresholds played a role.

Re: What is the perrect utilization?

BrutalBodyShots — Wed, 10 Dec 2025 03:06:20 GMT

Understood, so young/thin. I'd tend to agree that raw dollars aren't a factor if we're isolating it to those scorecards. Those claiming it on a clean/thick/mature card though need to look at raw dollars. As for SJ, he doesn't even believe that defined utilization threshold points even exist in the first place based on a post he wrote in 2024.

What sort of data points have you seen (scoring impact) reported at 5% compared to what is typically seen at 10%? Does that initial threshold at 5% carry the same relative weight as the other threshold points, or is the 10% threshold more or less halved into two parts where ~half is seen at 5% and the other half at 10%?

Re: What is the perrect utilization?

Realist — Wed, 10 Dec 2025 14:43:42 GMT

You are speaking about a two part situation in regards to applying for a home mortagage.

1. Your overall interest rate based upon a FICO score. You want your utilization score on track for that calculation.

2. Your debt to income ratio.

Under 35%-45% in debt to income ratio, and the highest FICO score you can produce. Your revolving utlization should be under 30% at worst.

An expansive and strong credit profile helps. The more out of alignment from an ideal profile, the more someone will pay. One does not simply do not walk into an excellent FICO score. They earn it over a lifetime, or a very long time.

Re: What is the perrect utilization?

Patient957 — Wed, 10 Dec 2025 05:37:11 GMT

@BrutalBodyShots wrote:
I've identified raw dollar thresholds in the vacinity of $2k, $5k and $10k on my clean/thick/mature file. To your point, they are rather minor in terms of FICO scoring impact; 3-4 points typically. I just think it's an important metric to reference when talking optimized scores that it isn't just about utilization percentage... especially with higher TCL files.

Okay, so if I understand you, by this theory, I'm just over the 2K threshold, and should be able to gain a few points if I can knock $34 off my usage when my next credit card reports. Do I have that right?

(Clean/thick/mature/new revolver, btw)

Re: What is the perrect utilization?

BrutalBodyShots — Wed, 10 Dec 2025 06:27:42 GMT

Not exactly, as the precise amount of $2k isn't confirmed. That's why I said in the vicinity of $2k, 5k and 10k. I allow my balances to report organically every month, so those are just values I've found that when crossed in either direction I've seen a change. A true test would be to report (say) $1999 one month and $2001 the next, but that would involve micromanagement that I'm not really after at this stage of the game.

But yeah, to loosely answer your question you may very well see a few points around that amount of raw dollars.