topic Credit Utilization in Understanding FICO® Scoring

Credit Utilization

smallfry — Thu, 10 May 2007 10:02:37 GMT

Currently I have as close to zero utilization on all my revolving credit but the overall available is low at 15K. Is this hurting my scores and should I attempt to slowly increase my number of credit cards? I have just one now 5K limit. Is using 5% of an available 100K better than 5% of 15K? Does higher available credit result in a higher FICO score providing the utilization is low?

Re: Credit Utilization

Tuscani — Thu, 10 May 2007 11:45:28 GMT

smallfry wrote:
Currently I have as close to zero utilization on all my revolving credit but the overall available is low at 15K. Is this hurting my scores and should I attempt to slowly increase my number of credit cards? I have just one now 5K limit. Is using 5% of an available 100K better than 5% of 15K? Does higher available credit result in a higher FICO score providing the utilization is low?

1-9% overall is ideal

Re: Credit Utilization

smallfry — Thu, 10 May 2007 16:03:06 GMT

@Tuscani wrote:

@smallfry wrote:
Currently I have as close to zero utilization on all my revolving credit but the overall available is low at 15K. Is this hurting my scores and should I attempt to slowly increase my number of credit cards? I have just one now 5K limit. Is using 5% of an available 100K better than 5% of 15K? Does higher available credit result in a higher FICO score providing the utilization is low?

1-9% overall is ideal

You've said that before thanks. However that wasn't actually the question. Does the amount of available credit help to increase my FICO scores? Assume I would leavea 1% balance on 15K and on 100K. I am getting dinged now because I opened new lines of credit so I can only assume trying to acquire more credit cards at this point would be hurtful to my score.

Re: Credit Utilization

Tuscani — Thu, 10 May 2007 17:49:32 GMT

@smallfry wrote:

@Tuscani wrote:

@smallfry wrote:
Currently I have as close to zero utilization on all my revolving credit but the overall available is low at 15K. Is this hurting my scores and should I attempt to slowly increase my number of credit cards? I have just one now 5K limit. Is using 5% of an available 100K better than 5% of 15K? Does higher available credit result in a higher FICO score providing the utilization is low?

1-9% overall is ideal

You've said that before thanks. However that wasn't actually the question. Does the amount of available credit help to increase my FICO scores? Assume I would leavea 1% balance on 15K and on 100K. I am getting dinged now because I opened new lines of credit so I can only assume trying to acquire more credit cards at this point would be hurtful to my score.

The newly opened accounts will hurt your score. Not the fact you have more avail credit.

Re: Credit Utilization

Anonymous — Thu, 10 May 2007 18:16:29 GMT

@smallfry wrote:
ideal

Focus on the cards you have now. My strategy in acquiring new cards is to wait three months or so between cards...this way I not ruffle the FICO "beast" and make it think I'm going for broke by getting a zillion lines of credit all at once. The ding to your FICO will ease over the next year or so once the FICO algorithm "realizes" you're not about to go charge up all those cards and go broke. You do want to get CLIs. Keep everything current with utilization below 10%, and every six to nine months bug the card companies for CLIs.

Re: Credit Utilization

smallfry — Thu, 10 May 2007 19:08:41 GMT

Thanks everyone. Here's the problem. I only have one credit card with a 5K limit. the rest of my credit consists of lines of credit at an electronic store for 4K and a line of credit at a mattress store for 3K. Not buying another bed anytime and I am not buying another large screen TV. see the dilemna?

Re: Credit Utilization

Tuscani — Thu, 10 May 2007 19:22:51 GMT

smallfry wrote:
Thanks everyone. Here's the problem. I only have one credit card with a 5K limit. the rest of my credit consists of lines of credit at an electronic store for 4K and a line of credit at a mattress store for 3K. Not buying another bed anytime and I am not buying another large screen TV. see the dilemna?

No dilemma. You don't have to use these accounts, and they are not costing you money, so leave them be.

Re: Credit Utilization

smallfry — Thu, 10 May 2007 19:37:52 GMT

@Tuscani wrote:

@smallfry wrote:
Thanks everyone. Here's the problem. I only have one credit card with a 5K limit. the rest of my credit consists of lines of credit at an electronic store for 4K and a line of credit at a mattress store for 3K. Not buying another bed anytime and I am not buying another large screen TV. see the dilemna?

No dilemma. You don't have to use these accounts, and they are not costing you money, so leave them be.

Thanks again Tuscani. Maybe I need not do anything right now.

Re: Credit Utilization

Anonymous — Thu, 10 May 2007 22:30:21 GMT

Is it to late for me?

My balances are $0, and I'm going for loan shoping at the begining of June.

I charged to cards with lunch and other with gas.

Any chance that will reflect and if not should I call and ask them to update?

Thank you!

Re: Credit Utilization

Anonymous — Fri, 11 May 2007 22:29:41 GMT

@smallfry wrote:
Thanks everyone. Here's the problem. I only have one credit card with a 5K limit. the rest of my credit consists of lines of credit at an electronic store for 4K and a line of credit at a mattress store for 3K. Not buying another bed anytime and I am not buying another large screen TV. see the dilemna?

How about in a couple months you buy a universal remote and a bedding set? Then pay them off over a month or two? This keeps the accounts active without racking up a huge balance and dinging you on utilization.

Re: Credit Utilization

Anonymous — Fri, 18 May 2007 07:06:38 GMT

Is this hurting my scores = Higher % of balances lower scores. Having unused credit does not hurt or lower scores. 5% is low. But you will see as you lower the percentage the score should go up. and should I attempt to slowly increase my number of credit cards? I have just one now 5K limit. = Getting a new credit card to off set the percentage will drop your score for months. = Credit simulators show more than 1 credit card does help show more history "in the long run". However that inquiries will stay for 1-2 years and your score will drop hard in the first few months. After 6-12 months scores tend to go up by increasing from 1 card than having just 1 card. Don't get a new card to raise credit limits to offset debt to limit ratio. It takes months before new cards count as good points, however worth it in the long run, years later.... Is using 5% of an available 100K better than 5% of 15K? = 5% of $15k is the same 5% of $100k. Lower % of any limit is scored better.