topic Re: Credit Utilization in Rebuilding Your Credit

Credit Utilization

Cjethompson2017 — Thu, 25 Jun 2020 00:17:20 GMT

I'm a little confused on how credit utilization works. A lot of said that a co account goes against a your utilization, and if you pay it off you may see a small boost. But, when I login to Experian (I realize these aren't real scores) it doesn't include these cards into the utilization. Because mine says 3%, but still have a few co cards to pay off. Can anybody explain?

Re: Credit Utilization

FireMedic1 — Thu, 25 Jun 2020 07:34:56 GMT

Easiest way is this.

List in order.

Creditor name/ Credit Line/ Balance

Then we can see whats up. You have individual card util and then aggregate (overall) util that makes it all up. If you follow All Zero Except One (AZEO) thats when you get the best bang for your buck.

Re: Credit Utilization

TheKid2 — Thu, 25 Jun 2020 13:05:11 GMT

@Cjethompson2017 wrote:
I'm a little confused on how credit utilization works. A lot of said that a co account goes against a your utilization, and if you pay it off you may see a small boost. But, when I login to Experian (I realize these aren't real scores) it doesn't include these cards into the utilization. Because mine says 3%, but still have a few co cards to pay off. Can anybody explain?

The Credit Monitoring Sites show your OPEN revolving Util, which does not count past due balances of COs. The FICO algos behind the scenes count these COs against your Util. In fact, they count them as "maxxed out" - we don't exactly know the percentage (tried doing testing as I paid them off).

So, it is smart FICOing to keep open Util low and practice AZEO, but you have to address all the past due CO balances. Only when you settle or pay off those CO past due balances will you see the score benefits from Util. BTW - in my testing I did not see any benefit between AZE2 and AZEO when I settled my COs. YMMV as there are many factors to a credit profile.

Re: Credit Utilization

Cjethompson2017 — Thu, 25 Jun 2020 13:48:11 GMT

Mine:

Comenity/VS: $0/$190

Comenity/Toyota: $0/$250

Comenity/NY&Co: $0/$200

CapOne CO: $451

CreditOne CO: Shows $0

Authorized Signer on Kohl’s: $30/$300

Authorized Signer Discover: $20/$200

Husbands:

Kohls: $30/$300

Discover: $20/$200

Citi CO: $1147

Chase CO: $4560, but settled so should show $0 anytime now

All other closed accounts show $0.

Re: Credit Utilization

Cjethompson2017 — Thu, 25 Jun 2020 14:39:43 GMT

@TheKid2 I don't know all the lingo yet. What does AZE2 and AZEO and YMMV mean? Lol. I am trying to get all these paid off here shortly. It'll be good to get this stuff off my plate.

Re: Credit Utilization

quikj9 — Thu, 25 Jun 2020 16:20:22 GMT

@Cjethompson2017 wrote:
@TheKid2 I don't know all the lingo yet. What does AZE2 and AZEO and YMMV mean? Lol. I am trying to get all these paid off here shortly. It'll be good to get this stuff off my plate.

AZEO = All Zero Except One

AZE2 = All Zero Except 2

Refers to the practice of letting only one or two cards report a statement balance, while every other card reports $0 for a FICO score boost.

Re: Credit Utilization

Anonymous — Thu, 25 Jun 2020 17:22:20 GMT

YMMV when it comes to your CO accounts and if you pay them off. Like it was stated before, you may see a small increase when you pay off CO accounts. I had no active revolving accounts reporting a balance but when I paid off my Target TD CO which was 835$, I gained 20 points which dropped the combined util % from 28% to 17%. You may or may not get the same results but taking care of CO accounts will help regardless.

Re: Credit Utilization

Cjethompson2017 — Thu, 25 Jun 2020 17:40:50 GMT

What does YMMV mean?? Dang It. I feel old. 😂

Re: Credit Utilization

quikj9 — Thu, 25 Jun 2020 17:49:53 GMT

@Cjethompson2017 wrote:
What does YMMV mean?? Dang It. I feel old. 😂

YMMV = Your Mileage May Vary

Here's a good resource for you:

Common myFICO abbreviations