Credit Utilization %

[takeshi74]

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@Anonymous wrote:

In order to increase credit lines I need to show use , on time payments and justification for extension of larger credit limits. What would most effectively do that? < 9% utilization across all cards and make sure they are paid well in advance of the statement date?

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A lot of people assume that use has a significant impact.  Utilization is a significant factor but all factors matter as your credit and income determine the limits and CLI's that you qualify for.  For utilization do not exceed 30%.  For the most possible points one balance at 10% or less.  Lower is generally better.  Just don't let all balances report as 0.

When you pay doesn't really matter in and of itself.  You pay prior to the report date to adjust the reported balances.  It's the reported balances (and therefore utilization) that really matter.

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@CH-7-Mission-Accomplished wrote:

There is an urban myth that an individual card should not report more than 30% of its limit, but this is just a myth.  An individual card will not get dinged unless it is reporting over 89% of its credit limit.

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It's not just a matter of scoring but risk as well and utilization can be a problem on a card well before 89% -- depending on the creditor.

[MarineVietVet]

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@CH-7-Mission-Accomplished wrote:

The statement balance reporting should be on one card (or two if you have lots) and should be between 1% and 10% of your total revolving credit limits.  

When asked about this concept, John Ulzheimer, the noted FICO expert, replied that "FICO isn't stupid" regarding spreading card balances out over multiple cards versus having it on one card.

There is an urban myth that an individual card should not report more than 30% of its limit, but this is just a myth.  An individual card will not get dinged unless it is reporting over 89% of its credit limit.

Some people also think that they need to have one card report and that that card should be between 1% and 10% of that one card's limit.  This is incorrect.  It is 1% to 10% of your total revolving limits.

1% is better than 2% which is better than 5% which is better than 9%.  I think people should try to keep the total revolving reported amount at 1% to 5% of total revolving limits.

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May I ask where you read this information?

[vanillabean]

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@CH-7-Mission-Accomplished wrote:

The statement balance reporting should be on one card (or two if you have lots) and should be between 1% and 10% of your total revolving credit limits.  

When asked about this concept, John Ulzheimer, the noted FICO expert, replied that "FICO isn't stupid" regarding spreading card balances out over multiple cards versus having it on one card.

There is an urban myth that an individual card should not report more than 30% of its limit, but this is just a myth.  An individual card will not get dinged unless it is reporting over 89% of its credit limit.

Some people also think that they need to have one card report and that that card should be between 1% and 10% of that one card's limit.  This is incorrect.  It is 1% to 10% of your total revolving limits.

1% is better than 2% which is better than 5% which is better than 9%.  I think people should try to keep the total revolving reported amount at 1% to 5% of total revolving limits.

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What's a good utilization?