Credit Utilization -> Can it be TOO low?

[Anonymous]

Facts:
-I have about $70,000 in available credit lines.

-4 are American Express and/or Mastercard = $43,600
-7 are department stores = $22300
-4 are banking lines of credit (2 overdraft protection, 2 lines of credit = $3000
-Have a large mortgage (about $425k)
-Wife has a small student loan of about $7,500

-I basically charged maybe an average of $2000-3000 on my Amex/Mastercard per month and rarely use any of the other cards
-I never once paid anything late and never run balances on anything other than obviously my loans which I pay off every month

So, as you can see, my credit utilization is around 2500/70000 = 3.6%


QUESTION:
-Is that too low a credit utilization score?

I was thinking of closing a few of the most recent (2005-2006) department store cards to decrease my overall credit lines by about $10,000 and thus increase my utilization score slightly. Would that help?

Is there anything else I should/could do to increase my score over time? Should I lower my total balance allowed on any of my existing cards somewhat to, again, increase my utilization rate? Is too low a bad thing?

Or should I just leave everything as-is?

Granted....when I applied for my mortgage 2 years ago, my (& my wife's) credit scores were between 770-800, but still, just curious.

Thanks!!!

[MidnightVoice]

Word on the street is that 1-9% reported utiliation is ideal.

Given your scores there is not much you can do to improve them other than get old, and also no apparent NEED to improve them 

[SmartCookie]

Yeah that's pretty good!  I'd consider paying off more or all of the student loan and also using any cards that you have not used in a while.  Small purchases on the store cards etc just to make sure they are reporting.  Let it hit on a statement, pay it off, sock drawer again.

[Anonymous]

I'd get rid of the student loan...it's just dead weight at this point--what is the interest on that?

[haulingthescoreup]

ilovepizza has been doing a lot of experimenting with util in these thin-air score ranges. He believes that there is something especially wonderful about 1%, or a tiny bit either way. I expect his one-eyed starfish will be along in a bit to elucidate.

[Anonymous]

We consolidated right at the peak of the housing market (and the trough of the credit rates) so her loan is a tiny 3.125% so it makes more sense to keep it and earn more in the bank than to pay it off, especially since our credit scores are pretty good as-is.

[SmartCookie]

---

GeorgeG wrote:
We consolidated right at the peak of the housing market (and the trough of the credit rates) so her loan is a tiny 3.125% so it makes more sense to keep it and earn more in the bank than to pay it off, especially since our credit scores are pretty good as-is.

---

Yeah you definitely do not need the points badly enough to get rid of that rate.  

You really have fabulous scores.  Have you pulled up your CBRs to see if there is anything simple that you can fix, like any incorrect 30 day lates etc? 

[Anonymous]

I get the free reports from all 3 every year like clockwork via my calendar reminder :-).

Nothing says late payments or anything fishy other than one thing says that account information was disputed, probably because some kid got a hold of my credit card and charged some porn on it or something back then so I disputed it & got it resolved, but other than that, everything looks good.

Of course there's the random mis-spelling of my name in the "known as" section along with random misprints of my previous addresses of residence, but nothing that should impact my score. So it sounds like I should just leave everything as-is.

Finally, my credit scores (when done for my mortgage) only had the following notes:
30 Length of time since most recent account opening
14 Accounts too new
5 Too many accounts with balances
9 Too many accounts recently opened
8 Too many inquiries last 12 months
6 Too many consumer finance accounts

So from the above, it doesn't seem like I can do much except wait and not have inquiries and don't open any new accounts if I can avoid it....sound about right?

Thnx for all the tips by the way.

[Anonymous]

Hey that is a great interest rate--3.21--yeah I guess you need not be in such a hurry to rid yourself of it, plus since the SL is only $7K, it really doesn't matter--It's basically costing you $18 a month interest.

Try and get 4 or less accounts with balances--you will get a good increase for that. Most people overlook that. My score really shot up when util went down, and then again when I reduced from 6 w/ balances to 3 or 4 w/ balances.

[fused]

---

GeorgeG wrote:
Facts:
-I have about $70,000 in available credit lines.

-4 are American Express and/or Mastercard = $43,600
-7 are department stores = $22300
-4 are banking lines of credit (2 overdraft protection, 2 lines of credit = $3000
-Have a large mortgage (about $425k)
-Wife has a small student loan of about $7,500

-I basically charged maybe an average of $2000-3000 on my Amex/Mastercard per month and rarely use any of the other cards
-I never once paid anything late and never run balances on anything other than obviously my loans which I pay off every month

So, as you can see, my credit utilization is around 2500/70000 = 3.6%


QUESTION:
-Is that too low a credit utilization score?

I was thinking of closing a few of the most recent (2005-2006) department store cards to decrease my overall credit lines by about $10,000 and thus increase my utilization score slightly. Would that help?

Is there anything else I should/could do to increase my score over time? Should I lower my total balance allowed on any of my existing cards somewhat to, again, increase my utilization rate? Is too low a bad thing?

Or should I just leave everything as-is?

Granted....when I applied for my mortgage 2 years ago, my (& my wife's) credit scores were between 770-800, but still, just curious.

Thanks!!!

---

Excellent scores! Your credit file looks great especially your util on revolving accounts. I wouldn't change anything here. I wouldn't close any CCs in your situation unless it's costing you money in fees. But if you insist, please read the link in my sig line, closing credit cards.

Time will age your accounts and boost your scores. From what I see here, your focus should be on paying down the mortgage and your DW's SL so as to save money. You have the scores needed for an approval on anything.