Help !!!!! Help !!!!! Help !!!!! With Utilization

[NEEDCREDITADVISE]

Does all different types of accounts count when determining over all available credit? I.e... Dillards  cl $3,000,Bal $0.00 DillardsAmex $2,300 bal $0.00 Capitol one cl $2,000 bal $0.00  Penfed cl $20,000 bal $13,000 and Orchardbank cl 1,350 bal $0.00 ? and 2 installment account totaling $20,000  I'm wondering because I'm over 35% on my Penfed card , Someone please explain to me Utilization I've read it and still don't get it!

By Penfed being over 35% will that hurt my over all credit worthiness ? Thank you

[haulingthescoreup]

The util that counts is your revolving util, meaning credit cards, unsecured lines of credit, and home equity lines of credit with a CL less than $30-$40K. (Got to hunt that down again.) So don't worry about the installment stuff and mortgages.

To figure out your overall util, add up the reported balances on all your revolving accounts. Then add up all the credit limits (not just available credit, but the actual limits) on all your revolving accounts. Divide the total balance by the total CL, and that's your overall util.

Do the same with each individual account: that balance divided by that CL.

You want to aim for overall util under 10% (1 - 9%), and you don't want to have more than one card with high util. This is for scoring purposes. But in this day and age, with lenders running scared, I would never want to have a card at 30% or higher. There is just no point in getting them nervous about you.

Non-mortgage installment is scored in a completely separate category. A brand-new loan reporting at 100% will ding you for the first month, until your first payment reports. There are some points benefits for lower installment util, but in terms of scoring, you will benefit far more by knocking down your revolving util. HTH

[Anonymous]

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@NEEDCREDITADVISE wrote:

Does all different types of accounts count when determining over all available credit? I.e... Dillards  cl $3,000,Bal $0.00 DillardsAmex $2,300 bal $0.00 Capitol one cl $2,000 bal $0.00  Penfed cl $20,000 bal $13,000 and Orchardbank cl 1,350 bal $0.00 ? and 2 installment account totaling $20,000  I'm wondering because I'm over 35% on my Penfed card , Someone please explain to me Utilization I've read it and still don't get it!

By Penfed being over 35% will that hurt my over all credit worthiness ? Thank you

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Some math with the numbers you've given:

Dillards -- 0/3000 = 0% util

Dillards Amex -- 0/2300 = 0% util

Capital One -- 0/2000 = 0% util

PenFed -- 13000/20000 = 65% util

Orchard Bank --0/1350 = 0% util

TOTAL -- 13000/28650 = 45.5% util

If your numbers are accurate, the PenFed card is actually at 65% utilization, and the overall utilization is over 45%.

I believe you want ideally to have each individual utilization at most 9%, and overall utilization at most 9% as well.

[laz98]

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@haulingthescoreup wrote:
The util that counts is your revolving util, meaning credit cards, unsecured lines of credit, and home equity lines of credit with a CL less than $30-$40K. (Got to hunt that down again.) So don't worry about the installment stuff and mortgages.

To figure out your overall util, add up the reported balances on all your revolving accounts. Then add up all the credit limits (not just available credit, but the actual limits) on all your revolving accounts. Divide the total balance by the total CL, and that's your overall util.

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question about the reported balances thing.  one of my credit cards always shows a high balance of $379, which is over my limit (from when I lost my job).  should i try & get this corrected?  it sounds like it is really hurting my UTIL, since it's over 100%.

[cadavis0609]

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@laz98 wrote:

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@haulingthescoreup wrote:
The util that counts is your revolving util, meaning credit cards, unsecured lines of credit, and home equity lines of credit with a CL less than $30-$40K. (Got to hunt that down again.) So don't worry about the installment stuff and mortgages.

To figure out your overall util, add up the reported balances on all your revolving accounts. Then add up all the credit limits (not just available credit, but the actual limits) on all your revolving accounts. Divide the total balance by the total CL, and that's your overall util.

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question about the reported balances thing.  one of my credit cards always shows a high balance of $379, which is over my limit (from when I lost my job).  should i try & get this corrected?  it sounds like it is really hurting my UTIL, since it's over 100%.

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yes, dispute the amount. It is hurting your utilization and it doesn't look good to lenders either.

[laz98]

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@cadavis0609 wrote:

yes, dispute the amount. It is hurting your utilization and it doesn't look good to lenders either.

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 do i just ask them to report the most current balance?  i'm not really sure what to ask for here. 

& actually, i just noticed that my FICO TU report lists it as LARGEST PAST BALANCE.  is this the same thing?  like, is it having the same negative effect?  or is it more like, hey, FYI, this clown paid her bill late a while back.

[haulingthescoreup]

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cadavis0609 wrote:

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@laz98 wrote:

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@haulingthescoreup wrote:
The util that counts is your revolving util, meaning credit cards, unsecured lines of credit, and home equity lines of credit with a CL less than $30-$40K. (Got to hunt that down again.) So don't worry about the installment stuff and mortgages.

To figure out your overall util, add up the reported balances on all your revolving accounts. Then add up all the credit limits (not just available credit, but the actual limits) on all your revolving accounts. Divide the total balance by the total CL, and that's your overall util.

---

question about the reported balances thing.  one of my credit cards always shows a high balance of $379, which is over my limit (from when I lost my job).  should i try & get this corrected?  it sounds like it is really hurting my UTIL, since it's over 100%.

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yes, dispute the amount. It is hurting your utilization and it doesn't look good to lenders either.

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No, no, no --you never dispute correct info!

I'm talking about the current balances, not the highest-ever balance.

The highest balance might catch the eye of a lender on a manual review; if so, just be ready to explain the circumstances. But it has no effect at all on your scores. It is not considered for util. I have a highest balance of $10K-something on a $10K card, back from when it had a $30K CL. (I switched CL's with another card.) But the balance on the card is 0%, and my util on that card is $0. My guess is that they display that figure to show how much you ever use the card.

What I mean is that you need to be aware of the balance that is being reported to the CRA's, not the balance that you think you have right now. Typically the reported balance is that which displays on your statements, whether you then go ahead and pay it off or not.

[haulingthescoreup]

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laz98 wrote:

....& actually, i just noticed that my FICO TU report lists it as LARGEST PAST BALANCE.  is this the same thing?  like, is it having the same negative effect?  or is it more like, hey, FYI, this clown paid her bill late a while back.

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Bingo!

Of all of the tales of woe that I've read here, I've never, ever heard of anyone having problems because of a highest (largest) past balance. I don't even remember hearing that someone was asked about it.

Message Edited by haulingthescoreup on 10-05-2008 08:35 PM

[laz98]

that's great news!  thanks hauling!