topic Which CC balance/limits really affect the score? in Understanding FICO® Scoring

Which CC balance/limits really affect the score?

Anonymous — Sun, 15 Jul 2007 18:12:03 GMT

So FICO says that: 1) Having too many cards with balances is worse than maxing out a single card but 2) Maxing out a single card is worse than spreading out the balances but 3) The "overall" debt to CL is what's really calculated. So which is it? I thought I'd seen somewhere that if a balance to CL on a particular card went BELOW 50% that was better than having it go over 50%. But then I get a "your score is lower because" having balances spread around as opposed to having fewer "higher" balances?

Re: Which CC balance/limits really affect the score?

Anonymous — Mon, 16 Jul 2007 00:45:19 GMT

@Anonymous wrote:
So FICO says that: 1) Having too many cards with balances is worse than maxing out a single card but 2) Maxing out a single card is worse than spreading out the balances but 3) The "overall" debt to CL is what's really calculated. So which is it? I thought I'd seen somewhere that if a balance to CL on a particular card went BELOW 50% that was better than having it go over 50%. But then I get a "your score is lower because" having balances spread around as opposed to having fewer "higher" balances?

Well. It can be as much as -18 points for too many cards with balances.
Maxing out your cards can be more than -10 extra points.
.... But maxing out your card with what "CL" and what "%" of total credit line? This is a huge factor.
Most important of the three is total UTL! This can drop you over -100 points. Combine this with maxed out and too many cards and your score will plummet!

It's a weight game. Sometimes it is better to spread around, sometimes better to load on to one card. The differences are close. But UTL is always better lower than higher. Same as 10% is better than 20%.

And a $200 balance on a $300 limit looks worst than a $1,000 limit on a $10,000 card for the same person with the same income. Silly I know.

Re: Which CC balance/limits really affect the score?

Anonymous — Tue, 17 Jul 2007 18:48:51 GMT

ilovepizza wrote:

And a $200 balance on a $300 limit looks worst than a $1,000 limit on a $10,000 card for the same person with the same income. Silly I know.

Just remember that FICO score does not include your income. But a potential lender will look at it on your application for a mortgage, credit card, etc.

Re: Which CC balance/limits really affect the score?

fused — Tue, 17 Jul 2007 19:16:39 GMT

m_jonis wrote:
So FICO says that: 1) Having too many cards with balances is worse than maxing out a single card but 2) Maxing out a single card is worse than spreading out the balances but 3) The "overall" debt to CL is what's really calculated. So which is it? I thought I'd seen somewhere that if a balance to CL on a particular card went BELOW 50% that was better than having it go over 50%. But then I get a "your score is lower because" having balances spread around as opposed to having fewer "higher" balances?

1.) No way!

2.) Yes!

3.) FICO scores util% on each CC and all CCs collectively. So in essence there are two util% scores here. Util% on each CC and all CCs collectively >50% ok, >30% more FICO points and between

1-9% best.

Two scenarios below:

A.) three CCs

CC1# CL 2,000, balance 1,100 util 55%

CC2# CL 1,500 balance 800 util 53%

CC3# CL 1,000 balance 525 util 53%

Total util 54%

B.)

CC1# CL 2,000 balance 1,925 util 96% esentiially maxed-out

CC2# CL 1,500 balance 740 util 49%

CC3# CL 1,000 balance 490 util 49%

Total util% 70

Obviously I would much rather have A than B. In A util on each CC is 53-55% and the cumulative util is 54% not good. But B has a maxed out card and a cumulative util of 70%; very, very bad.

Message Edited by fused111 on 07-17-2007 09:16 AM