topic Re: Optimal Credit Card Balances in General Credit Topics

Optimal Credit Card Balances

Anonymous — Mon, 09 Mar 2020 20:27:15 GMT

Hi all, thanks in advance for the responses!

It seems as if the general consensus online for optimal credit card utilization is to use less than 30% of available credit. There are some others who say that as close to zero is the best.

What's been your experience with this?

For those who say less than 30%, is it 30% of overall utilization or does it need to be less than 30% per card?

Does that make sense? Thanks again!

Re: Optimal Credit Card Balances

Remedios — Mon, 09 Mar 2020 20:39:24 GMT

Individual utilization should stay below 29%, aggregate below 9%

For super duper best results, both individual and aggregate below 9%

If you need to squeeze every last point, only one card reporting a balance below 9%

Re: Optimal Credit Card Balances

SouthJamaica — Mon, 09 Mar 2020 21:11:53 GMT

@Anonymous wrote:
Hi all, thanks in advance for the responses!

It seems as if the general consensus online for optimal credit card utilization is to use less than 30% of available credit. There are some others who say that as close to zero is the best.

What's been your experience with this?
For those who say less than 30%, is it 30% of overall utilization or does it need to be less than 30% per card?

Does that make sense? Thanks again!

1. Optimally aggregate utilization should be as low as possible, but not dead zero. 30% or even less than 30% is not good at all. 6% or less is good.

2. Optimally individual utilization should be as low as possible, but there should at least one account which is not at dead zero. It's ok for it to get up to 28 or 29% sometimes, but over that you get significantly penalized.

For FICO scoring purposes "utilization" isn't really utilization in the generic sense, it's the reported balances.

Re: Optimal Credit Card Balances

Anonymous — Mon, 09 Mar 2020 21:29:28 GMT

This would be the AZOE method that I've read about, is that right?

1. Optimally aggregate utilization should be as low as possible, but not dead zero. 30% or even less than 30% is not good at all. 6% or less is good.

For FICO scoring purposes "utilization" isn't really utilization in the generic sense, it's the reported balances

@SouthJamaica wrote:
@Anonymous wrote:
Hi all, thanks in advance for the responses!

It seems as if the general consensus online for optimal credit card utilization is to use less than 30% of available credit. There are some others who say that as close to zero is the best.

What's been your experience with this?
For those who say less than 30%, is it 30% of overall utilization or does it need to be less than 30% per card?

Does that make sense? Thanks again!
1. Optimally aggregate utilization should be as low as possible, but not dead zero. 30% or even less than 30% is not good at all. 6% or less is good.

2. Optimally individual utilization should be as low as possible, but there should at least one account which is not at dead zero. It's ok for it to get up to 28 or 29% sometimes, but over that you get significantly penalized.

For FICO scoring purposes "utilization" isn't really utilization in the generic sense, it's the reported balances.

Re: Optimal Credit Card Balances

SouthJamaica — Mon, 09 Mar 2020 22:39:45 GMT

@Anonymous wrote:
This would be the AZOE method that I've read about, is that right?

1. Optimally aggregate utilization should be as low as possible, but not dead zero. 30% or even less than 30% is not good at all. 6% or less is good.

2. Optimally individual utilization should be as low as possible, but there should at least one account which is not at dead zero. It's ok for it to get up to 28 or 29% sometimes, but over that you get significantly penalized.

For FICO scoring purposes "utilization" isn't really utilization in the generic sense, it's the reported balances
@SouthJamaica wrote:
@Anonymous wrote:
Hi all, thanks in advance for the responses!

It seems as if the general consensus online for optimal credit card utilization is to use less than 30% of available credit. There are some others who say that as close to zero is the best.

What's been your experience with this?
For those who say less than 30%, is it 30% of overall utilization or does it need to be less than 30% per card?

Does that make sense? Thanks again!
1. Optimally aggregate utilization should be as low as possible, but not dead zero. 30% or even less than 30% is not good at all. 6% or less is good.

2. Optimally individual utilization should be as low as possible, but there should at least one account which is not at dead zero. It's ok for it to get up to 28 or 29% sometimes, but over that you get significantly penalized.

For FICO scoring purposes "utilization" isn't really utilization in the generic sense, it's the reported balances.

Well you asked what is optimal. What is optimal is having all but one of the accounts reporting at zero. The reason is that older scoring models, like the mortgage scores (EX FICO 2, EQ FICO 5, TU FICO 4), like to see a lot of zero balances.

Re: Optimal Credit Card Balances

seattletravels — Mon, 09 Mar 2020 23:16:10 GMT

Search the forum for AZEO and you'll find all the info you could want about reporting balances.

Re: Optimal Credit Card Balances

donkort — Tue, 10 Mar 2020 00:55:37 GMT

Don't let the one which reports a balance be a store card. It has to be card you can use outside branches of that particular store.

Re: Optimal Credit Card Balances

pinkandgrey — Tue, 10 Mar 2020 02:21:24 GMT

As others have said, the supposed "optimal" utilization is one card reporting under 8.9%, and your overall utilization staying below 28.9%

Re: Optimal Credit Card Balances

Remedios — Tue, 10 Mar 2020 03:42:35 GMT

No, the opposite

Aggregate needs to be under 9%, and single card reporting a small balance (again under 9%,).

That's alleged "total optimization"

Aggregate under 9%, while individual card is under 29% but over 9% may lead to a few points loss

Re: Optimal Credit Card Balances

pinkandgrey — Tue, 10 Mar 2020 12:22:09 GMT

@Remedios wrote:
No, the opposite
Aggregate needs to be under 9%, and single card reporting a small balance (again under 9%,).
That's alleged "total optimization"

Aggregate under 9%, while individual card is under 29% but over 9% may lead to a few points loss

Dangit, I knew I wrote that wrong lol. What I wrote doesn't even make sense if you read it slowly.

Re: Optimal Credit Card Balances

donkort — Tue, 10 Mar 2020 12:51:58 GMT

I'd do 8.5% and 28.5% to leave myself breathing room in case the interest kicks in.

Re: Optimal Credit Card Balances

Anonymous — Tue, 10 Mar 2020 14:23:34 GMT

@donkort wrote:
I'd do 8.5% and 28.5% to leave myself breathing room in case the interest kicks in.

Or 8.5% and 8.5%! That's what I'm shooting for. After today I'll only have 3 cards reporting a balance. My total utilization will be around 14% which is down from living at around 85-90% utilization for far, far too long.

Re: Optimal Credit Card Balances

donkort — Tue, 10 Mar 2020 14:46:36 GMT

Bring the TOTAL utilization down to below 8.5%. That would be more ideal.

Total (aggregate) utilization counts even more than the utilization of single cards.

Re: Optimal Credit Card Balances

Anonymous — Wed, 11 Mar 2020 02:39:45 GMT

Optimal for what? Scoring? CLIs? It depends.

For scoring, only one national bankcard <9%, or under 4% if you are in a young or thin profile. At all times try to stay <9% aggregate and <29% individual.

For CLIs, you wanna show most lenders useage ~30%.