topic Re: Credit Utilization Question in Understanding FICO® Scoring

Credit Utilization Question

Anonymous — Sun, 19 Oct 2014 06:05:46 GMT

I tried looking this up and could not find a clear answer, so I am going to try here

Does the credit utilization percentage per card matter or does only the overall credit utilization over all accounts matter?

Simply put, I have opened a few new credit lines including some zero percent introductory purchase APR cards. One of them is currently at close to 80% of its limit. My overall debt utilization percentage is still significantly under 10%. Will the high utilization on one card effect my credit score significantly? Or will only the overall debt utilization matter?

If it is the latter, I'd prefer to let the balance ride for some months to take advantage of no interest loan. If it is the former, I will pay off the statement balance in full next week. I don't mind a minor hit to credit for having 5-10% of my available credit utilized. However, if there is a significant penalty for having any one card near the max, I'd rather not deal with it since I might be applying for a few more cards in the coming months.

Re: Credit Utilization Question

Revelate — Sun, 19 Oct 2014 16:43:25 GMT

@Anonymous wrote:
I tried looking this up and could not find a clear answer, so I am going to try here

Does the credit utilization percentage per card matter or does only the overall credit utilization over all accounts matter?

Simply put, I have opened a few new credit lines including some zero percent introductory purchase APR cards. One of them is currently at close to 80% of its limit. My overall debt utilization percentage is still significantly under 10%. Will the high utilization on one card effect my credit score significantly? Or will only the overall debt utilization matter?

If it is the latter, I'd prefer to let the balance ride for some months to take advantage of no interest loan. If it is the former, I will pay off the statement balance in full next week. I don't mind a minor hit to credit for having 5-10% of my available credit utilized. However, if there is a significant penalty for having any one card near the max, I'd rather not deal with it since I might be applying for a few more cards in the coming months.

Three factors actually:

1) Aggregate revolving credit utilization

2) Individual revolving tradeline utilization

3) Number of revolving tradelines with balances compared to number of revolving tradelines at $0 balance.

To answer your specific scenario, there is a maxxed tradeline penalty and unfortunately we haven't apparently nailed it down (it's either at 80 or 90% utilization, guess could be 85% that would be a little odd though) which you're skirting. I do know when I was testing with my mixed file on Beacon 5.0 I went from 660 -> 646 -> 660 -> 646 -> 660 again in a series of maxxing a card (99.3 and 99.7% respectively) and paying it off whereas my aggregate utilization was low as an example. If your file is cleaner than mine was (or is, mine still isn't pretty) the score drop might be larger.

Re: Credit Utilization Question

Anonymous — Sun, 19 Oct 2014 18:02:34 GMT

Thanks. Guess I will keep it under 70% to be safe.