Utilization Rules, Redux

[haulingthescoreup]

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@Anonymous wrote:
Since the amount of money on the CC's is just a few hundred bucks and can be PIFed at any moment, let me reverse the question:

Which tradelines should I *allow* to report a balance for best results?

The installment is obviously fixed, but the rest are flexible.

The other question is: is there any point in adding any more CC's? I don't need any more credit, so doing so would purely be for score manipulation.

Message Edited by watchnerd on 04-20-2008 08:34 AM

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It's always easiest to allow the cards with the highest CL's to report balances, given that the balances are the same. $500 divided by $5K is 10%; $500 divided by $10K is 5%.

For immediate purposes, the only reason that I can see in adding another CC is if the Signature card gets counted in the fewer-than-half calculations, and therefore you're showing 2 out of 4 revolving with balances. One thing that you'll find if you get hooked on the balance reporting thing is that there is always one wacko card that reports at the wrong time, or the CRA's (usually TU in my experience) won't update, and you'll have an extra card with a balance. Discover mysteriously reported twice for us in December, the second time with a small balance, and TU promptly dropped 32 points. Discover apologized profusely and forced an update through all three CRA's (yay, Discover!), so no damage done, but that just goes to show you.

I had two reasons behind my recent app spree. One was to upgrade my overall credit profile, but the main reason was to get more CC's reporting that I could keep at $0. One of my 5 pre-app cards was the Discover, which is really my husband's, and he always seemed inspired to use it to go buy brake fluid the day before the statement dropped. With 3 non-revolving accounts which always had balances (mortgage, HELOC, and car loan), that was wearing me out.

I have too many now, but the ultimate goal is 7 cards, 3 CU's and 4 bank cards. That will give me 10 TL's, 3 that always have balances, allowing 1 or 2 cards to report a balance. Since your only non-revolving TL is the auto loan, you don't have to be so wary, but it's always nice to work your accounts so that 2 CC's can report without damage.

[Anonymous]

This is a great post.  I know this because I am now confused where before I thought I understood what was going on

Not to thread jack, but now I think I have what exactly TL's are since it appears you all have separated the CC's from the Installments, etc ...  I thought all were tradelines. 

In generalities I am going to post my financial to see if you can help paint the picture (I apologize to the OP).  I have a mortgage, A student loan (installment), A LOC, and 6 CC's (4 MC and 2 store cards). Exactly what should my utilization be?  What should I allow to report with balances?  If I need to provide more info please let me know.

[Anonymous]

HTSU, so if I understand you right, you think I should get one more CC if I plan to have 2 with balances (for 3/7), but the current mix is okay if only 1 CC reports a balance, right (2/6)?

[Anonymous]

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@Anonymous wrote:

This is a great post.  I know this because I am now confused where before I thought I understood what was going on

Not to thread jack, but now I think I have what exactly TL's are since it appears you all have separated the CC's from the Installments, etc ...  I thought all were tradelines. 

In generalities I am going to post my financial to see if you can help paint the picture (I apologize to the OP).  I have a mortgage, A student loan (installment), A LOC, and 6 CC's (4 MC and 2 store cards). Exactly what should my utilization be?  What should I allow to report with balances?  If I need to provide more info please let me know.

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If I understand things correctly:

You have 9 TLs.
2 at least (mortgage, student loan) have balances.
2 of the others can have balances, which would be a total of 4/9.


Message Edited by watchnerd on 04-20-2008 10:47 AM

Message Edited by watchnerd on 04-20-2008 10:48 AM

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

This is a great post.  I know this because I am now confused where before I thought I understood what was going on

Not to thread jack, but now I think I have what exactly TL's are since it appears you all have separated the CC's from the Installments, etc ...  I thought all were tradelines. 

In generalities I am going to post my financial to see if you can help paint the picture (I apologize to the OP).  I have a mortgage, A student loan (installment), A LOC, and 6 CC's (4 MC and 2 store cards). Exactly what should my utilization be?  What should I allow to report with balances?  If I need to provide more info please let me know.

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If I understand things correctly:

You have 9 TLs.
2 at least (mortgage, student loan) have balances.
2 of the others can have balances, which would be a total of 4/9.

However, if FICO rounds up (I've heard rumors it does), then only 1 other TL (CC, LOC) should have a balance.

Message Edited by watchnerd on 04-20-2008 10:47 AM

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You are correct Mortgage/Student Loans do have a balance. I also have a LOC which reports as revolving credit. All Credit Cards are currently at zero balance except one which I let report $25 (CL $1000). Since I have the LOC reporting as revolving should I PIF my credit cards all the time, or should they report a minimal balance to show I know how to manage my CC's?

[haulingthescoreup]

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@Anonymous wrote:
HTSU, so if I understand you right, you think I should get one more CC if I plan to have 2 with balances (for 3/7), but the current mix is okay if only 1 CC reports a balance, right (2/6)?

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Yep, if you can make them line up and behave, you're good. The one extra card would be purely for wiggle room.

[haulingthescoreup]

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@Anonymous wrote:

This is a great post. I know this because I am now confused where before I thought I understood what was going on

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Always the mark of a good thread!

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Not to thread jack, but now I think I have what exactly TL's are since it appears you all have separated the CC's from the Installments, etc ... I thought all were tradelines.

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Tradelines are credit accounts. So open tradelines include credit cards and unsecured lines of credit (which are revolving), installment loans and mortgages (which are installment), and anything else, including traditional charge cards. Any of these that are open are counted in figuring out the half-with-balances thing.

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In generalities I am going to post my financial to see if you can help paint the picture (I apologize to the OP). I have a mortgage, A student loan (installment), A LOC, and 6 CC's (4 MC and 2 store cards). Exactly what should my utilization be? What should I allow to report with balances? If I need to provide more info please let me know.

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OK, I'm seeing 9 total open TL's, 6 or 7 of which count as revolving, depending on whether the LOC is secured (as in a high-CL HELOC, secured by the equity in your home.) Three of these by definition have balances, the mortgage, the student loan, and the LOC. Half of your TL's is 4.5; half of the revolving is either 3 or 3.5, depending on how the LOC is characterized.

So 4 TL's total can report (no such thing as 0.5 of a TL), and 2 of your CC's can report, if we're only counting plastic, or 3 can report, if the LOC is counted as revolving.

It involves sacrificing chickens and examining their innards to figure out how FICO, especially TU, regards LOC's. One way to find out is if you don't have a lot of other baddies, and your util is under control, and nothing else is changing (good luck on that), let 3 cards report one month, then 2 the next, and compare scores and the carping on screen 2 of your reports.

[Anonymous]

Thanks HTSU.   Now I need to let this info simmer for a moment ... BRB

[Anonymous]

Do all Bank of America Signature (Visa) cards not report limits when over 10K? 

The reason I asked: You say you have a credit limit of 11k and I have one of 10K and the limit isn't reported.  I have had the Signature for a while now (converted over a year ago) and when my limit was 8k it reported, then I requested a 10k limit and now it doesn't report.  It now just reports the largest balance of 5,231. 

[haulingthescoreup]

That's an interesting point! We have been seeing that Bank of America generally DOES report limits on their Signature cards, but some members have posted that they don't.

I wonder if that's the difference? --once you hit $10,000, or possibly $10,001, it no longer reports. There is precedent for this sort of thing.