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0.5% vs 1% credit utilization what's best?? HELP!

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isrababy2000
Member

0.5% vs 1% credit utilization what's best?? HELP!

Hello,

 

I have $8,950 credit limit in all my credits cards together, I currently have 0% utiliization, because I paid them off every month.

 

I want to increase my FICO score by adding 1% of credit card utilization, that means adding $89.50 balance every month.

 

If I only add $45, that means 0.5% utilization,  will my score increase??  

 

That 0.5% utilizaton is consider as 1% in the fico score models?  

 

or I have to add the whole $89.50 to get the exact 1% utilization?

 

 

Thanks

 

 

 

 

 

 

 

 

 

Message 1 of 13
12 REPLIES 12
takeshi74
Senior Contributor

Re: 0.5% vs 1% credit utilization what's best?? HELP!

It's up to you to determine where the sweet spot is for % versus point gain.  You need to monitor your scores and consider the impact of other data changes going on when testing to see how they are impacted at diferent revolving utilization levels.  We can only provide generalizations.

 

Big point gains typically come from big drops in revolving utilization so a difference of 0.5% or 1% may be little to nothing.

 

General advice is keep it under 30%.  The whole optimizing thing is only recommended when applying for credit or CLI's, etc.  Since revolving utilization is determined based on balances and limits as currently indicated in your reports you can drop it as needed/desired.  Prior utilization does not matter.

 

I don't bother with it myself.  With my spend and limits I'm now usually at about 4% with most cards reporting balances.  My FICO 8's are all above 800 so it's not worth the hassle to me.  I've received best terms from Chase Mortgage without worrying over it.

 

Consider your credit profile and scores and don't just assume that you have to have the lowest possible revovling utilization at all times.

 


@isrababy2000 wrote:

I have $8,950 credit limit in all my credits cards together, I currently have 0% utiliization, because I paid them off every month.

 


Don't assume that.  Paying in full doesn't necessarily mean that you have all 0 balances on your reports though there is a hit if that happens.

 

If you're paying after report date then a balance reported.  You'd have to pay in full prior to report date with sufficient time for the payment to clear and with no charges posting in that timeframe to have a 0 balance report.  If you're paying after statement cut and by your due date then you have a balance reporting.

Message 2 of 13
kdm31091
Super Contributor

Re: 0.5% vs 1% credit utilization what's best?? HELP!

I'd suggest not stressing about it. It is extremely unlikely to make any major difference. The point of cards is to use them and enjoy the benefits, not run your life trying to please scoring models (especially with such a minor thing).

Your utilization is zero. You have no debt. Congratulations. Don't sweat the small stuff. You'll drive yourself crazy.
Message 3 of 13
Loquat
Moderator Emeritus

Re: 0.5% vs 1% credit utilization what's best?? HELP!

I'm sure it depends a lot on your profile.  I know for me, when I went from 1% to 0% utilization I was hit hard...with EQ being the worst with a 34 point drop.  Won't make that mistake again.  Don't know if .5% will  yield the same results as 0% but in your situation, why not just let a $100 report and save yourself the trouble. 

Message 4 of 13
EdMan63
Established Contributor

Re: 0.5% vs 1% credit utilization what's best?? HELP!


@kdm31091 wrote:
I'd suggest not stressing about it. It is extremely unlikely to make any major difference. The point of cards is to use them and enjoy the benefits, not run your life trying to please scoring models (especially with such a minor thing).

Your utilization is zero. You have no debt. Congratulations. Don't sweat the small stuff. You'll drive yourself crazy.

What a great answer. This sums it up perfectly. I've certainly been guilty of this and believe me .5% does not make any difference worth talking about. Enjoy your cards and just keep you utilization under control (max 30% or better yet under 10%) and go for maximizing numbers when you anticipate applying for credit. 


Message 5 of 13
jbsea
Established Contributor

Re: 0.5% vs 1% credit utilization what's best?? HELP!

Like others have said you have to play around with it for awhile to find out where it is.  My spot seems to be around 6% but really I've gotten to the point where I dont worry about it.  I just try to carry balances that might get me in trouble.  like most on here been there done that.

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Message 6 of 13
isrababy2000
Member

Re: 0.5% vs 1% credit utilization what's best?? HELP!

Thanks for the advice!!!

 

I'm just stressed out because I'm applying for a mortgage next month, and I want my score to be the best posiible, 

 

My current FICO score is 711 with a couple of late payments, 

 

 

Message 7 of 13
Kevin86475391
Frequent Contributor

Re: 0.5% vs 1% credit utilization what's best?? HELP!


@isrababy2000 wrote:

Thanks for the advice!!!

 

I'm just stressed out because I'm applying for a mortgage next month, and I want my score to be the best posiible, 

 

My current FICO score is 711 with a couple of late payments, 

 

 


Ahh, well if you are planning to apply for a mortgage next month this might be one of the only times it really is worth worrying about to such a precise extent. I'd say let about $80-$90 report on your largest limit card.

 

Unfortunately the late payments are likely having a much bigger negative impact than the positive impact of the utilization, but certainly offsetting it as much as possible is a good idea if you're going for a mortgage.

 

Good luck getting the best terms possible!

Message 8 of 13
Anonymous
Not applicable

Re: 0.5% vs 1% credit utilization what's best?? HELP!

.5% will report as 1% though automatically. if you have a five cent balance then it'll show as 1%
Message 9 of 13
Mattopotamus
Frequent Contributor

Re: 0.5% vs 1% credit utilization what's best?? HELP!


@jbsea wrote:

Like others have said you have to play around with it for awhile to find out where it is.  My spot seems to be around 6% but really I've gotten to the point where I dont worry about it.  I just try to carry balances that might get me in trouble.  like most on here been there done that.


Very similar results here.  3% - 6% seems to be my sweet spot Smiley Happy

Message 10 of 13
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