topic Re: How does the Util calculation work on multiple cards? in General Credit Topics

How does the Util calculation work on multiple cards?

Anonymous — Mon, 11 Aug 2008 19:12:05 GMT

I currently have two revolving accounts, one is a $3000 limit, other is $200 limit Target card. Currently util is about 90% on the $3000 and 80% on the $200. I will be paying both of these to 0% util in the next 30 days. I also plan to work on getting a card at my credit union after I get some issues on my CR cleaned up. Here is my question:

I want to keep very very low utils, 15% max ever....really want to stay lower than that. So, lets assume I have a balance of $150 on the $200 card and $150 on the $3000 card. Would that count negatively on my credit report because one card is high util or would it be the combined 9% util which would be ok.

I am planning to ask for a limit increase but if it doesn't happen I am not closing the account so I guess it is best to just sit it aside and leave a $0 balance?

Re: How does the Util calculation work on multiple cards?

fused — Mon, 11 Aug 2008 19:24:43 GMT

To fully understand what Utilization percentages are, you must understand FICO scoring has two types of util percentage calculations, one that looks at the extent of utilization on individual revolving accounts (mostly CCs) and the other is cumulative and looks at the extent of utilization on all of your revolving accounts. In your case, keep a balance of < 9% on one card and 0 on the other card. If you get a third card, keep a balance of < 9% on one card and keep the other two at 0. This will give you max points.

Re: How does the Util calculation work on multiple cards?

Anonymous — Mon, 11 Aug 2008 20:13:10 GMT

Excellent, thanks! I don't really need to use the cards, I like the convenience here and there so I'll just keep one and let the others collect dust