topic Re: Effect of High Utilization on One Card in Understanding FICO® Scoring

Effect of High Utilization on One Card

ObieGrad — Mon, 29 Jun 2015 12:19:50 GMT

I have a very high FICO score. If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

Re: Effect of High Utilization on One Card

Anonymous — Mon, 29 Jun 2015 12:24:56 GMT

@ObieGrad wrote:
I have a very high FICO score. If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

A lot depends on your overall credit file but generally that high of a utilization on one card will lower your scores but they will recover in time as you pay the loan down.

Re: Effect of High Utilization on One Card

Anonymous — Mon, 29 Jun 2015 12:28:48 GMT

@ObieGrad wrote:
I have a very high FICO score. If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

I can only speak from my experience. I had scores in the low 810's and total C/L in the 450k range. In January 2014 I got the Arrival+ with a $22.5k limit. Within a few months, I had it spent up to $21k, where it pretty much held until I paid it off January 2015. For the entire time I had the Arrival+ pegged at $20k-$21k, my score dipped into the 780-790's. Once I paid off the Arrival, my score sprang back into the 800's. Of course, there are other factors, inquiries chief among them. But there certainly seemed to be a punishment to having that balance on the Arrival+.

Chris.

Re: Effect of High Utilization on One Card

Anonymous — Mon, 29 Jun 2015 12:35:54 GMT

@ObieGrad wrote:
I have a very high FICO score. If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?

Perhaps your overall UTI won't be effected much, but the UTI on the BT card will be high. There's no escaping the FICO decrease that you will have if one card is nearly maxed out. But again, the overall UTI may not be effected, so it won't kill your score by any means, but keeping UTI spread out among several cards (below 30%) would be more ideal for your score. But also, doing that isn't exactly ideal either, because all cards have different rates and BT offers. I personally wouldn't think too much about it if there's no other way for you to do a BT and you need that service. That's what it's there for.

Re: Effect of High Utilization on One Card

Imperfectfuture — Mon, 29 Jun 2015 12:38:27 GMT

@Anonymous wrote:
@ObieGrad wrote:
I have a very high FICO score. If I want to take advantage of a balance transfer on one card and bring it to about 80%-90% uitlization but keep my overall utilization low will that affect my credit differently than spreading this balance over a number of cards?
Perhaps your overall UTI won't be effected much, but the UTI on the BT card will be high. There's no escaping the FICO decrease that you will have if one card is nearly maxed out. But again, the overall UTI may not be effected, so it won't kill your score by any means, but keeping UTI spread out among several cards (below 30%) would be more ideal for your score. But also, doing that isn't exactly ideal either, because all cards have different rates and BT offers. I personally wouldn't think too much about it if there's no other way for you to do a BT and you need that service. That's what it's there for.

Agree. Just don't do any apping until almost paid off.

Re: Effect of High Utilization on One Card

Revelate — Mon, 29 Jun 2015 21:40:22 GMT

To add another datapoint from a mortgage score, I went from 660 to 646 to 660 to 646 to 660 when maxxing out tradelines on Beacon 5.0. Does affect things, but if you're 800+ and the balance transfer makes financial sense to do so, I'd do it in a heart beat without thinking twice. I'd do it even at other strata too, finances > FICO.

Re: Effect of High Utilization on One Card

cem13 — Tue, 30 Jun 2015 00:32:36 GMT

I had my NFCU card report 37% (8% overall ) on 27JUN. I try to keep it at 10 to 15%. I had a 5 point drop on all 3 CRA.

Re: Effect of High Utilization on One Card

CreditGuy03 — Tue, 30 Jun 2015 01:34:58 GMT

So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.

Re: Effect of High Utilization on One Card

NRB525 — Tue, 30 Jun 2015 02:51:24 GMT

@CreditGuy03 wrote:
So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.

It's better to put the entire BT so the one card is 90% Utilization, because that's where the lowest interest rate is.

As noted by others, cash savings beats out FICO score games every day of the week. The score will come back. The balance pay down will go faster if there is 0% APR on that balance. Win-Win.

Re: Effect of High Utilization on One Card

Anonymous — Tue, 30 Jun 2015 23:07:20 GMT

@NRB525 wrote:
@CreditGuy03 wrote:
So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.
It's better to put the entire BT so the one card is 90% Utilization, because that's where the lowest interest rate is.
As noted by others, cash savings beats out FICO score games every day of the week. The score will come back. The balance pay down will go faster if there is 0% APR on that balance. Win-Win.

^^^^ +1

Exactly! The points come back to you, but the money spent on interest payments does NOT.

Re: Effect of High Utilization on One Card

SouthJamaica — Wed, 01 Jul 2015 03:31:06 GMT

@CreditGuy03 wrote:
So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.

Much better to spread it around

Re: Effect of High Utilization on One Card

NRB525 — Wed, 01 Jul 2015 04:58:08 GMT

@SouthJamaica wrote:
@CreditGuy03 wrote:
So is it better to have 90% on one card or spread it out among 10 cards?

A balance on 10 cards sounds worse than 90% on one.
Much better to spread it around

How much better?

Re: Effect of High Utilization on One Card

yoyo — Wed, 01 Jul 2015 16:48:26 GMT

Hello,
I have the subscription for the Fico monitoring for all reports.
I do get an update from all bureaus for my utilization. I believe
that Fico looks at all accounts not just one card.

So let's say you have 20 % utilization on 9 cards and 99% utilization on 1...this would not hurt your score.
It's a combo of all cards...Store cards rate differently..

I don't think store cards are used for available credit and utilization because they are considered loans...

Re: Effect of High Utilization on One Card

Revelate — Fri, 03 Jul 2015 05:42:07 GMT

@yoyo wrote:
Hello,
I have the subscription for the Fico monitoring for all reports.
I do get an update from all bureaus for my utilization. I believe
that Fico looks at all accounts not just one card.

So let's say you have 20 % utilization on 9 cards and 99% utilization on 1...this would not hurt your score.
It's a combo of all cards...Store cards rate differently..

I don't think store cards are used for available credit and utilization because they are considered loans...

Store cards are revolving tradelines: they are not counted as loans.

FICO looks at both individual tradeline utilization, aggregate tradeline utilization, and numbers of cards with balances when it comes to the revolving utilization calculation.

Re: Effect of High Utilization on One Card

NRB525 — Sat, 04 Jul 2015 01:17:15 GMT

@Revelate wrote:
@yoyo wrote:
Hello,
I have the subscription for the Fico monitoring for all reports.
I do get an update from all bureaus for my utilization. I believe
that Fico looks at all accounts not just one card.

So let's say you have 20 % utilization on 9 cards and 99% utilization on 1...this would not hurt your score.
It's a combo of all cards...Store cards rate differently..

I don't think store cards are used for available credit and utilization because they are considered loans...
Store cards are revolving tradelines: they are not counted as loans.

FICO looks at both individual tradeline utilization, aggregate tradeline utilization, and numbers of cards with balances when it comes to the revolving utilization calculation.

I think my experience this year confirms this point. Aggregate utilization is coming down rapidly, but still relatively high, all cards continue to report balances, but I had several cards which were over 50% utilization as late as April reports to bureaus, and even higher utilization up to 70% in December. In February, two substantial cards ($5k and $7k balances) plus an $8k LOC that were over 50% utilization. In May, nothing individually was over 50% anymore, as those cards started reporting their May amounts.

Scores in Feb: EQ 694-698 TU 707-713 EX 724-722 total open CC: 33k

Scores in May: EQ 716-714 TU 720-727 EX 727-724 Total open CC: $27k

So, at this point, total Utilization approaches 20%, but each card and LOC are less than 50%. INQ are a bit of a factor, brought the scores down from the October amounts in my siggy. I think this individual utilization change and somewhat the overall utilization change was the significant factor recently.

End of June: EQ 750 TU 777 EX 764 total open CC: headed toward $25k

Re: Effect of High Utilization on One Card

Revelate — Sat, 04 Jul 2015 04:55:54 GMT

@NRB525 wrote:
@Revelate wrote:
@yoyo wrote:
Hello,
I have the subscription for the Fico monitoring for all reports.
I do get an update from all bureaus for my utilization. I believe
that Fico looks at all accounts not just one card.

So let's say you have 20 % utilization on 9 cards and 99% utilization on 1...this would not hurt your score.
It's a combo of all cards...Store cards rate differently..

I don't think store cards are used for available credit and utilization because they are considered loans...
Store cards are revolving tradelines: they are not counted as loans.

FICO looks at both individual tradeline utilization, aggregate tradeline utilization, and numbers of cards with balances when it comes to the revolving utilization calculation.
I think my experience this year confirms this point. Aggregate utilization is coming down rapidly, but still relatively high, all cards continue to report balances, but I had several cards which were over 50% utilization as late as April reports to bureaus, and even higher utilization up to 70% in December. In February, two substantial cards ($5k and $7k balances) plus an $8k LOC that were over 50% utilization. In May, nothing individually was over 50% anymore, as those cards started reporting their May amounts.

Scores in Feb: EQ 694-698 TU 707-713 EX 724-722 total open CC: 33k
Scores in May: EQ 716-714 TU 720-727 EX 727-724 Total open CC: $27k
So, at this point, total Utilization approaches 20%, but each card and LOC are less than 50%. INQ are a bit of a factor, brought the scores down from the October amounts in my siggy. I think this individual utilization change and somewhat the overall utilization change was the significant factor recently.

End of June: EQ 750 TU 777 EX 764 total open CC: headed toward $25k

We've long since held there's a maxxed out card penalty around 80 or 90%, but by the time people get to the point of FICO minutiae on this forum their CL's are typically non-trivial to max.

Since I will have virtually no use for my report for the next two years post mortgage app spree, think may just open a minimum limit secured card somewhere (probably SDFCU) and then play with the balances a little bit to see if I can figure that out at least for FICO 8 at any rate.

Re: Effect of High Utilization on One Card

Anonymous — Sat, 04 Jul 2015 05:03:56 GMT

If you have a high fico score and are not app'ing for anything right now. I would put it all on one card. That's the purpose of 0%. I did the 12 months same as cash for some lighting and my UT on it was 99% to start with. Score bounces back quickly and I stll owe 3k on it. I wanted to take advantage of that deal and never had a problem when it reported. Now I wouldn't advise you do that with 2 cards.

Re: Effect of High Utilization on One Card

Kforce — Wed, 19 Oct 2016 22:40:37 GMT

Have a real Fico 850 with 1 card report < 1% utilty.

Drops to 845 from 3 cards reporting 1% utility each.

Drops to 840 with all cards reporting 0 balance.

Drops to 835 from one card with 85% utility, and one with < 1% utilty.

Re: Effect of High Utilization on One Card

Revelate — Wed, 19 Oct 2016 23:19:53 GMT

@Kforce wrote:
Have a real Fico 850 with 1 card report < 1% utilty.
Drops to 845 from 3 cards reporting 1% utility each.
Drops to 840 with all cards reporting 0 balance.
Drops to 835 from one card with 85% utility, and one with < 1% utilty.

Which bureau, which score version, and how many revolving tradelines?

Re: Effect of High Utilization on One Card

Thomas_Thumb — Thu, 20 Oct 2016 03:44:13 GMT

@Revelate wrote:
@NRB525 wrote:
@Revelate wrote:
@yoyo wrote:
Hello,
I have the subscription for the Fico monitoring for all reports.
I do get an update from all bureaus for my utilization. I believe
that Fico looks at all accounts not just one card.

So let's say you have 20 % utilization on 9 cards and 99% utilization on 1...this would not hurt your score.
It's a combo of all cards...Store cards rate differently..

I don't think store cards are used for available credit and utilization because they are considered loans...
Store cards are revolving tradelines: they are not counted as loans.

FICO looks at both individual tradeline utilization, aggregate tradeline utilization, and numbers of cards with balances when it comes to the revolving utilization calculation.
I think my experience this year confirms this point. Aggregate utilization is coming down rapidly, but still relatively high, all cards continue to report balances, but I had several cards which were over 50% utilization as late as April reports to bureaus, and even higher utilization up to 70% in December. In February, two substantial cards ($5k and $7k balances) plus an $8k LOC that were over 50% utilization. In May, nothing individually was over 50% anymore, as those cards started reporting their May amounts.

Scores in Feb: EQ 694-698 TU 707-713 EX 724-722 total open CC: 33k
Scores in May: EQ 716-714 TU 720-727 EX 727-724 Total open CC: $27k
So, at this point, total Utilization approaches 20%, but each card and LOC are less than 50%. INQ are a bit of a factor, brought the scores down from the October amounts in my siggy. I think this individual utilization change and somewhat the overall utilization change was the significant factor recently.

End of June: EQ 750 TU 777 EX 764 total open CC: headed toward $25k
We've long since held there's a maxxed out card penalty around 80 or 90%, but by the time people get to the point of FICO minutiae on this forum their CL's are typically non-trivial to max.

Since I will have virtually no use for my report for the next two years post mortgage app spree, think may just open a minimum limit secured card somewhere (probably SDFCU) and then play with the balances a little bit to see if I can figure that out at least for FICO 8 at any rate.

I'll stick with the 90% for max out threshold for individual card utilization that Experian uses.

I personally saw no Fico 08 score drop associated with 52% ($2102/$4000) and 75% ($3011/$4000) utilization on a single card but, that's just my profile.

Aggregate utilization is a stronger factor than individual utilization. My take is individual card utilization impact on score becomes negligable below 50% for most profiles except as it relates to # cards with positive balances. On the other hand, aggregate utilization continues to impact score down to the 9% level at least. For thin files a moderate utilization on a single card (30% to 50%) may substantially impact aggregate utilization and this tends to confound the Fico algorithm response. Of course, NRB525's file with over 20 open cards is not thin.