a little confusion about utilization

[Kostya1992]

So I understand that keeping a low (1-10%) balance helps boost my score. However, do I want to consistantly do this? Reason I ask is because I always see people say stuff like "keeping a low utilization only matters if you plan on applying for another CC/loan soon, so just pay off your balances before you apply."

Does consistant low utilization simply inflate my score while going with the "pay off before applying method" puts less emphasis in the score and more into getting approved for said loan right there and then? Sorry if this is confusing but any info would be helpful.

Thanks!

[myjourney]

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@kostyan1992 wrote:
So I understand that keeping a low (1-10%) balance helps boost my score. However, do I want to consistantly do this? Reason I ask is because I always see people say stuff like "keeping a low utilization only matters if you plan on applying for another CC/loan soon, so just pay off your balances before you apply."

Does consistant low utilization simply inflate my score while going with the "pay off before applying method" puts less emphasis in the score and more into getting approved for said loan right there and then? Sorry if this is confusing but any info would be helpful.

Thanks!

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[Anonymous]

It might be worth considering the other end of the spectrum, where you have a $1000 limit and let $975 report every month before paying it off.

This can damage your scores and loan prospects on a pretty regular basis, and we've had specific reports of people who ran into this problem.

[Kostya1992]

So basically its best to ALWAYS have a low utilization reporting, not just when I want to add a new tradeline?

Thanks for the responses!

[Anonymous]

Scores are used for more than just loan applications.

For example, higher utilization presumably correlates with higher AA risk.

This doesn't mean that you have to be hyper about things, but I personally would always avoid letting a high balance report, if there is a way to get around it.

[ways2go]

When I got most of my cards.  I only had a ge care,  which was maxed out and a cap one platinum.  That maxed card didn't prevent me getting other cards.  I think it did prevent me from an Amex card though.The ge care is still high.  I did a HP for a cli and now it dropped the util low.  I should just hurry up and pay it off.  I just don't, my DW opened it up so my daughter could get some dental done.  I told my daughter, I'll open it up, but you'll have to pay it. Otherwards sure dad,  I'll pay it.  which means I pay it.  Lately I've been doubling the payments to get it over with.

[sexy_kitten7]

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@kostyan1992 wrote:
So I understand that keeping a low (1-10%) balance helps boost my score. However, do I want to consistantly do this? Reason I ask is because I always see people say stuff like "keeping a low utilization only matters if you plan on applying for another CC/loan soon, so just pay off your balances before you apply."

Does consistant low utilization simply inflate my score while going with the "pay off before applying method" puts less emphasis in the score and more into getting approved for said loan right there and then? Sorry if this is confusing but any info would be helpful.

Thanks!

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FICO util has no memory and is thus, a snapshot.

Therefore, 10% util Jan-Oct and 60% util Jan-Sept with 10% util Oct will both give you the same FICO score in October.