Yet another utilization question...

[Anonymous]

So this is what you've got...

Newport News $0/670 = 0%

Metrostyle $40/500 = 8%

Old Navy $60/200 = 3%

Chadwicks $270/880 = 31%

Brylane $0/250 = 0%

Orchard MC $1000/1390 = 72%

Orchard Visa $900/1150 = 78%
==========================================
Overall Util = $2270/5040 = 45%


So you see what is going on, now you have to plan what course of action to get your util to a certain level, then attack the others. I would target the higher util cards and work one down and then the other, that way you will be getting the wins (as far as score increases) and less of a "two steps forward one step back" routine.
I have read that you would benefit from have a 1-9% balance on half of your revolving accounts and PIF the other half.

I am in the same boat (short term large jump for better refi) and hope to have somewhere of a 10-25pt increase per account, and yes YMMV...good luck!

[rom828]

Well,  I guess it is certainly safe to say I need to get and keep half PIF and the others below 10%!!

The simulator shows that if I pay even just $600 over 3 mos period I'd get pretty good boost.....but seeing these outlined (thanks, HinH!!) and showing 45% overall utilization, I guess I'm getting hit pretty hard on a per card utilization also.

I think I will plan on paying off the smaller ones this month (on 15th)  and see what happens, and then plan to really buckle down on the Orchard cards and get them to 1-9% ASAP.

I'll be reporting back to let y'all (yes, I'm a southerner!!) know about any score changes as a result of this payment plan!!

[coco08]

How do you calculate utilization?  I'm always confused by that.

[rom828]

I may not be the best one to answer, but I'll give it a shot:

Basically, utilization is computed by dividing the amount(s)  owed by the credit limit(s),

ie:  $500 owed on a $1000 CL  =  50% utilization.  For multiple cards, you add all amounts owed and divide by total of CLs.  (See the explanation/outline  HinH provided above on my accounts....very helpful!!)

What I was confused about is the scoring of utilization, whether it's on a total amount  or per card.  From what I've read, and these replies, it's both,  and is probably contingent on other factors as well, which is why "YMMV"......it could be a little different from person  to person.  But bottom line is that you want utilization really low: 1-9% (ie: $300 owed on $5k  CL)

I'm going to try PIF on over half of my accounts and see what happens to score, and then will be paying way down on remaining cards with high utilization, and again, see what happens.  I hope what happens is that I see a big increase!!LOL .  As mentioned, Simulator shows a 30-50 point increase just by my paying $600 over 3 months, so I will definitely be making better utilization a priority!!

[Anonymous]

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coco08 wrote:

How do you calculate utilization?  I'm always confused by that.

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Divide the balance by the available credit. Example: $250 balance on a credit card with a $500 limit is 50% (250/500 = .5, or 50%).

To figure out overall util, add up all  your balances and all your available credit. Divide the total balances by the total available credit, and that's the overall util. Example:

Card                Balance         Available Credit

Amex               $100              $1000

Visa                  $5                 $6000

MC                   $375              $500

Total                 480                 7500

480/7500 = .064, or 6% util overall.

[Anonymous]

Great minds, Rom

Yes, both do matter. I have an overall util of about 26%, which is not great but not horrible either. But considering that 3 of my accounts are at 78%, 62%, and 63% util respectively, I'm sure that's having a significant impact to my score that I'm hoping will ease up once they get below (at least) 50%.

[rom828]

Thanks, Des.....I try...though I know I'm far from the most qualified!!

I'll really be anxious to see how my plan works out......guess that'll be the test as to whether overall or individual utilization  counts more, less or the same.

I'll also be glad when I feel I can focus on the joy of being debt free (except my mortgage!!) and not have to be so focused on the whole scoring game!!

[coco08]

Thanks to Rom and Desifink for your help.  I'm anxious to crunch the numbers and see where I stand.