Handling Revolving Debt?

Amarie003 — Mon, 26 May 2014 14:00:19 GMT

I know the debt ratio is calculated with other revolving debt and does not include installment loans.. My question though is, each month does your CS reflect you debt percentage for each of your revolving lines or just all of them together?
Example: does my CR calculate that I am using x% amount/per card or x% amount/all cards to get the ratio?
This would help me understand if having a balance on 1 card is more smart than spreading a balance amongst a few cards.

Re: Handling Revolving Debt?

takeshi74 — Mon, 26 May 2014 16:28:48 GMT

The general advice for optimal scoring (i.e. when you go to apply for something) is to let one balance report with a utilization of 10% or less. FICO models favor fewer balances reporting and lower utilization. Both overall and individual utilization matter.

@Amarie003 wrote:
Example: does my CR calculate

Scores are based on data in your reports but the reports don't calculate anything. Scores are an entirely separate matter.

@Amarie003 wrote:
This would help me understand if having a balance on 1 card is more smart than spreading a balance amongst a few cards.

It's not necessarily an either/or matter. While fewer balances is generally better it wouldn't be advisable to put everything on one card, say, if you ended up with very high utilization on that one card. I'd suggest focusing on staying under the generally recommended 30% max for utilization. If you're looking to app then you might want to look into letting only one balance report with 10% or less utlilization.

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Handling Revolving Debt?

Re: Handling Revolving Debt?