Questions about utilization

[Anonymous]

I have a couple of questions i would like to ask about utilization. I have been reading different posts' all morning and i can't seam to find my answers, so i'm not trying to be lazy by being direct.

Q1. If i pull my credit report/scores just for the purpose of checking my own credit and knowing where i stand, am i penalized for it?

Q2. I read a post where someone referenced asking a lender for a CL increase, they advised to ask the lender if it would be a soft or hard pull. what is the difference in the hard or soft?

Q3. Is there any rule of thumb for figuring out what the penalty is for utilization rates? for example is 50% utilization neither a plus or minus on your score? The more over 50% you go the more the penalty and thus the more under 50% you are the more the plus? does anyone really know exaclty?

also, is there a cutoff for being over 50% that is real bad, like 85%?

It seems like i keep learning so much off of this website, although, the more i learn i feel like the less i know? why does all of this credit reporting have to be such a secret? why cant they just tell everyone how it works, to at least take the guess work out of it. I would think that if it is going to affect all of our lives so much that as a minimum we could be told what affects it and how.

thank you for your help,

Charliebrown

Message Edited by charliebrown32 on 03-10-2008 10:24 AM

[Anonymous]

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charliebrown32 wrote:

Q1. If i pull my credit report/scores just for the purpose of checking my own credit and knowing where i stand, am i pentalized for it?

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No.  When you pull your own credit report, it is always a soft pull.  See below.

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charliebrown32 wrote:

Q2. I read a post where someone referenced asking a lender for a CL increase, they advised to ask the lender if it would be a soft or hard pull. what is the difference in the hard or soft?

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Hard inquiries count against your score for one year, and are visible on your reports for two years.  They are visible to any creditor or potential creditor who pulls your reports.

Soft inquiries don't count at all against your score, and are only visible to you.  Your creditors and potential creditors never see soft inquiries.

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charliebrown32 wrote:

Q3. Is there any rule of thumb for figuring out what the penalty is for utilization rates? for example is 50% utilization neither a plus or minus on your score? The more over 50% you go the more the penalty and thus the more under 50% you are the more the plus? does anyone really know exaclty?

also, is there a cutoff for being over 50% that is real bad, like 85%?

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You have the right idea, except the 50% figure is way off.  The accurate figure is 9%.  Anything higher than that, and you begin to lose points.  It appears the major thresholds for point loss are right around every 10%.  So you may not lose points going from 26% to 28%, for example, but you probably would lose points going from 29% to 31%.

There are additional thresholds where you will lose even more points once you cross them.  Crossing the 50% line can do major damage, and the most severe damage happens when you cross above 85%.  Utilization this high can hurt your score as much as a major derogatory (like a collection).

[Anonymous]

1) Not at all.

2)A hard pull reflects in your credit report and can ultimately hurt you if you have many inquiries into your reports by many lenders.

3) 0%(debt free) hurts your score. 1-9% helps your score by a good amount. over 10% starts to hurt again. the higher your go, the more it hurts. The "big" hurts are at 50% and 90%.

I hope this helps and welcome to the forums!

[Anonymous]

I will try and help (even though I am a noob as well ;-] )...
Q1. No, I understand it that you do not get penalized when checking your own credit.

Q2. Hard pulls count towards your credit score (how much, I do not know, think not too much) and it stays on your report for 2 yrs, but only counts against your score for one year.

Q3. I do not know of a break out (since all files are different), general rule of thumb is: half = no balance and other half 1-9% of limit. This is the optimum, I do not know enough history to tell you where the cut-off is..hopefully others can expand on this to help us.

Yup, this is a great website that has helped me plan my way out of the hole of bad credit. Bunches of fine people on here!

[Anonymous]

I have an excel spreadsheet that I have allways used to track total debt, CC/bill payments and such. Well, I used it to figure out my (individual) and joint (me and my wife's) CC utilization and what a nightmare. The good things we have going for us is we have some long standing credit, a hickup or so here or there, but all were a long time ago. I firgured our joint ratio at 57%and my individual at 88%.

I am glad I got a response here, I honestly thought that under 50% was ok. I have a ways to go now, but at least i know what the goal is.

Do you recommend the score tracker I have been hearing of? Is it accurate? Worth the money?

Message Edited by charliebrown32 on 03-10-2008 10:23 AM

[Anonymous]

If you mean "Score Watch" - I think it is a great product.

well worth the price. 

To give you an idea- my UTLization between 43% and 5% was 80 points. I can just imagine what yours is going to be.

If you have bought a EQ or TU score from myFICO there is a score simulator- Check it out.

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charliebrown32 wrote:

I have an excel spreadsheet that I have allways used to track total debt, CC/bill payments and such. Well, I used it to figure out my (individual) and joint (me and my wife's) CC utilization and what a nightmare. The good things we have going for us is we have some long standing credit, a hickup or so here or there, but all were a long time ago. I firgured our joint ratio at 57%and my individual at 88%.

I am glad I got a response here, I honestly thought that under 50% was ok. I have a ways to go now, but at least i know what the goal is.

Do you recommend the score tracker I have been hearing of? Is it accurate? Worth the money?

Message Edited by charliebrown32 on 03-10-2008 10:23 AM

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[Anonymous]

It surprised me that my TU score was like a 606, EQ was almost 630, and EXP somewhere around 630. I guess my old lates arent hurting me that bad after all. If I could get a point jump like that by paying these things down to 9%, I think i would be sitting nice.

Even the creditors that I had a late with I wrote last week and asked them to delete-we'll see what happens with that. I figure that since most of them are almost 6 years old that they will be willing. Is there a cost to them to delete bad info or their record of credit alltogether. if so, can you offer to pay that fee for them in exchange?

[Anonymous]

Those old lates are only hurting a little-

You could easily see 80 to 120 points just by paying off the revolving debt-

I highly recommend using the score simulator-

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charliebrown32 wrote:

It surprised me that my TU score was like a 606, EQ was almost 630, and EXP somewhere around 630. I guess my old lates arent hurting me that bad after all. If I could get a point jump like that by paying these things down to 9%, I think i would be sitting nice.

Even the creditors that I had a late with I wrote last week and asked them to delete-we'll see what happens with that. I figure that since most of them are almost 6 years old that they will be willing. Is there a cost to them to delete bad info or their record of credit alltogether. if so, can you offer to pay that fee for them in exchange?

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[Anonymous]

I just bought the all three reports/scores from MyFico. I am going to open my account and see if i can get it to work. thanks allot for the discussion and all the feedback. I will come back and let you know what it said.

Charlie

[Anonymous]

I was wrong about my current scores... TU-614, EQU-632, EXP- 605

I did the score watch and this is what i found. EQU said if i paid all CC balances off over a 24 month period it would range between 712-752. It would range 642-682 if i did it all at once. TU said 724-764 over 24 months or 654-694 if paid all at once.

Thanks for your help again and leading me to the estimator.

Charliebrown