topic Re: Help with utilization in Rebuilding Your Credit

Help with utilization

Anonymous — Thu, 25 Jun 2015 01:20:48 GMT

Just paid down my Amex to $1840 on a $6600 limit card. I got an alert from myfico and signed in to find a drop in my score of 5 points. What's that all about? I thought it was good to have it below 30%? I could have used the $900 I just paid on that card
I'm feeling frustrated.

Re: Help with utilization

tufa4311 — Thu, 25 Jun 2015 01:29:14 GMT

@Anonymous wrote:
Just paid down my Amex to $1840 on a $6600 limit card. I got an alert from myfico and signed in to find a drop in my score of 5 points. What's that all about? I thought it was good to have it below 30%? I could have used the $900 I just paid on that card
I'm feeling frustrated.

You only want one card reporting a balance and you want it to be 1-9%. Yes, it's good to have it below 30% as that's better than 50%, which is better than 60%...you get it, there's always something "better" - you want the best, which is 1-9%. Sometimes though we can't have the best, so do what you can, keep paying down the balance and try to stay between 1-9%.

Re: Help with utilization

Anonymous — Thu, 25 Jun 2015 01:38:32 GMT

I apologize... I'm still confused.
I was at 40% and paid it down to under 30% and my score dropped 5 points. So how is 30% better than 40%? I get that the ultimate goal is 1-9%, but I don't get how 40 is better than 30. I don't know when I'll be able to get to 9%, so from what just happened to my score, it looks like i should stay at 40% to gain back those points? And only pay it down when I can do a big payment to 9%?
(This is my only card with a remaining balance)
Thank you for your response, btw

Re: Help with utilization

Anonymous — Thu, 25 Jun 2015 01:59:01 GMT

You did the right thing to pay it down under 30%. Presumably, some other changes took place over time that didn't trigger myFICO alerts, which is a major weakness of myFICO. This causes much confusion and unnecessary worry.

Re: Help with utilization

tufa4311 — Thu, 25 Jun 2015 03:24:57 GMT

@Anonymous wrote:
I apologize... I'm still confused.
I was at 40% and paid it down to under 30% and my score dropped 5 points. So how is 30% better than 40%? I get that the ultimate goal is 1-9%, but I don't get how 40 is better than 30. I don't know when I'll be able to get to 9%, so from what just happened to my score, it looks like i should stay at 40% to gain back those points? And only pay it down when I can do a big payment to 9%?
(This is my only card with a remaining balance)
Thank you for your response, btw

ya, what ronpa said...it's always better to have less debt so don't worry about 5 points, that's a sneeze, just keep paying down your debt and you will see gains as long as other negative factors are not incurred along the way.

No, don't only pay it down when you can make big payments, that's silly unless you're investing that extra money in an inestment vehicle that is earning more interest than...oh forget about that, just pay down your balance with as much as you can whenever you can. Every dollar less you owe is less in interest you are paying, remember, interest!

Re: Help with utilization

2b2rich — Thu, 25 Jun 2015 03:56:54 GMT

No other changes at all? How long ago did you receive the most recent notification of a credit report change?

For example, if the last time you received a notification was 2 weeks ago, then anything that changed on your report from that day, through today will be factored into that score change. (ex: if an older, positive account aged off, any new inquiries, etc, it would be factored into the score you saw today.

Re: Help with utilization

Anonymous — Thu, 25 Jun 2015 12:29:12 GMT

I just pulled my report yesterday morning. There were no other changes. The report (3b) and the alert were hours apart.

no other changes at all except the posting of the Amex payment.

Re: Help with utilization

Anonymous — Thu, 25 Jun 2015 12:48:22 GMT

The interest part is true. Less debt is less debt. But
We are trying to buy a house though, and need every little point we can get for as little cash out as we can.

Re: Help with utilization

Anonymous — Thu, 25 Jun 2015 14:39:49 GMT

@Anonymous wrote:
I just pulled my report yesterday morning. There were no other changes. The report (3b) and the alert were hours apart.

no other changes at all except the posting of the Amex payment.

*Everything* on your reports changes *every* day. It all ages constantly. Something most certainly changed, but it was a subtle change thats not at all obvious. It could be something such as FICO rebucketing you because of aging of particular items.

Re: Help with utilization

Anonymous — Thu, 25 Jun 2015 14:54:42 GMT

That's right... I forgot about the whole behind the scenes rules. Thanks, Norman.
There should be a rule book to this game...