The WalletHub piece is fairly decent, but there's at least a couple things in it worth correcting. I include them below with my comments in blue.
30% Is The Golden Rule, But Too Low Isn’t Optimal: It’s generally recommended that consumers keep credit utilization below 30%, which is good advice that can also be a bit misleading.
I was hoping the author would go on to clarify two particular ways that it is misleading, but he doesn't mention either:
(1) The optimal threshold is not under 30% but actually under 8.99%. Going from 28% to 8% will give you a significant boost.
(2) If the best somebody can achieve is in the vicinity of 30% (due to limited funds) then he needs to make sure he gets under 28.9%. A utilization of 29.1% will be rounded up to 30% which will be penalized noticably more sharply then if it was at 28.7%.
While maintaining zero utilization is certainly better than maxing out your credit cards, swearing off credit entirely doesn’t necessarily engender confidence among potential lenders because question marks will still remain regarding how you might ultimately leverage the credit made available to you, should the circumstances ever demand it.
It's not simply that an individual lender might have an issue with it, but all cards at zero has a FICO scoring penalty as well.
The best approach is to make sure you are using at least one card each month and paying off the balance in full when the statement comes.
This is very misleading, in that it gives the reader the impression that paying in full is a way of controlling utilization. It is not. To PIF, while laudable in that prevents paying interest, has nothing to do with reported utilization. A person could PIF after the statement prints every month and have a utilization at 70% or even higher. The writer needs to help his reader understand how balances are reported to the bureaus and then how to control how much these amounts are, typically by controlling the balance (i.e. paying it down) before the statement comes.
Everything Is Relative: Not everyone is evaluated according to the same utilization scale. What matters most is how your utilization compares with that of other individuals who are approximately your age and have similar financial profiles in terms of factors such as income and debt obligations.
This is untrue. FICO does not take into account the consumer's age, and I am pretty sure it is illegal for individual lenders to do that either (happy to be corrected if I am mistaken on that point). Income is also not taken into account by FICO -- and as far as I know reported utilization is not considered differently based on a person's income, even by individual lenders. Here it is possible that the writer is thinking of DTI, but that is very different from revolving utilization.
