@MeredithLepore wrote:Credit scoring models look at both aggregate credit utilization and the individual utilization on each account. To impact your score positively your utilization across each individual card should be under 30% as well as you overall utilization (combined credit used/combined credit available). Hope that helps!
Can Arkali, senior director of scores and predictive analytics with FICO, confirms that using a low percentage of your available credit can have a positive impact on your FICO Score. Yet Arkali adds, "there is nothing 'optimal or significant' about 30% credit card utilization." FICO scoring models consider a 30% credit card utilization rate less risky than a 50% utilization percentage. As a result, you'd likely see a 30% utilization rate lead to a better score than what you'd see at a higher threshold. Still, 30% utilization would be viewed less favorably than a lower utilization rate. You'll want single digits for best scoring.
@FireMedic1 wrote:
@MeredithLepore wrote:Credit scoring models look at both aggregate credit utilization and the individual utilization on each account. To impact your score positively your utilization across each individual card should be under 30% as well as you overall utilization (combined credit used/combined credit available). Hope that helps!
Can Arkali, senior director of scores and predictive analytics with FICO, confirms that using a low percentage of your available credit can have a positive impact on your FICO Score. Yet Arkali adds, "there is nothing 'optimal or significant' about 30% credit card utilization." FICO scoring models consider a 30% credit card utilization rate less risky than a 50% utilization percentage. As a result, you'd likely see a 30% utilization rate lead to a better score than what you'd see at a higher threshold. Still, 30% utilization would be viewed less favorably than a lower utilization rate. You'll want single digits for best scoring.
I wouldn't be inclined to dispute anything in that statement. However, over the 20 years I've been tracking my FICO score and following posts here, I've had a keen impression that the score hit you take in going from (say) 10%-30% utilization on a card is smaller than the score hit you take in going to 30%+ (and, again, smaller than the hit in going above 50%).
So it's been my inference that this is why the general guidance around quarters such as myFICO has been to avoid over 50% utilization, and strive for under 30%, where possible. But, yeah, "lower" is always better than "higher".
