CC Utilization?

[Anonymous]

I know that you get the most points if you keep a card less than 10%. Do you immediately see any points say if you had a card and it was overlimit and you got it underlimit? Thanks guys!!

[haulingthescoreup]

The scoring formula has no memory for utilization. When you or a lender pull your report and FICO score, the score is a snapshot of what's on your report at that very moment. So if you're overlimit (yikes!), that will hurt you, and if you're within the limit, your score will just reflect how much of that limit has been used.

The change won't show until the card updates to the credit bureaus again, generally on its statement date, plus then the bureaus have to update the reports. So there will be a bit of a lag while everything processes through the system.

And the formula looks at both total revolving util and individual util, just so you're aware. We don't know if they count 50/50 or what.

Your ultimate goal should be to have your total util well under 9%, with most cards reporting $0. That is both for scoring purposes and to keep you financially free of the power of lenders to increase your APR's and so forth.

[thedaveytrain]

If a card has a balance, and I am paying down, does that count as use? I have a few with balances and I want to be sure they don't get closed due to inactivity, I am not using them right now because I don't want to drive the balance higher and raise my util %.

[MarineVietVet]

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@thedaveytrain wrote:
If a card has a balance, and I am paying down, does that count as use? I have a few with balances and I want to be sure they don't get closed due to inactivity, I am not using them right now because I don't want to drive the balance higher and raise my util %.

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I've always considered that as activity but I could be wrong. Any other opinions on this?

[marty56]

IMHO no.  You can (I do) pay down your card prior to the reporing date so you can control how much reports.  I 've had  RBFCU MC for 2 motnhs, and I am earning chahs back and it hasnt reported a balance.  CCCs don't care about reporting a balance.  They want you to use the card so they can get their mechant fees and they still want you to revolve a balance (open to debate now) to make interest on you as well.

[MarineVietVet]

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@marty56 wrote:
IMHO no.  You can (I do) pay down your card prior to the reporing date so you can control how much reports.  I 've had  RBFCU MC for 2 motnhs, and I am earning chahs back and it hasnt reported a balance.  CCCs don't care about reporting a balance.  They want you to use the card so they can get their mechant fees and they still want you to revolve a balance (open to debate now) to make interest on you as well.

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You could be absolutely correct about this. I've never been really sure how that works. All I know is I just did a BT on my Cap One card for 0% for a year and I guarantee there will be NO activity except payments on this account until it is once again at a 0 balance.   

[haulingthescoreup]

For FICO scoring purposes, paying monthly counts as activity; in other words, you shouldn't get hit with a dormant card ding. I never got one after doing nothing but pay down a BofA BT and then used it for a purchase.

As for whether a merchant will be happy, that's another story, and the answer is locked inside their perplexing tiny brains.