Utilization

[mohammadmoghimi]

Does credit card utilization have a long term effect on credit score? For example, if my utilization stays at 80% for a year and then drops to 20% for a few months, will the score be better than when the utilization was 20% all the time? In order words, does having debt for a long period of time affects the score in the long term?

[Luscher]

no, utilization will only effect the score for that month.

So if you have 80 percent for a year and then go down to 20 percent you will see and increase in score (most likely)

[Themanwhocan]

Of course, if you keep utilization at 80% for that long, some of your creditors might reduce your credit limits.

[lhcole77]

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@mohammadmoghimi wrote:

Does credit card utilization have a long term effect on credit score? For example, if my utilization stays at 80% for a year and then drops to 20% for a few months, will the score be better than when the utilization was 20% all the time? In order words, does having debt for a long period of time affects the score in the long term?

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FICO scores have no memory when it comes to utlzation.

Carrying too large a balance for too long a time OR having too high of UTL may concern lenders, though. That should be kept in mind.