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High Utilization on Low Limit Question

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godwit
Member

High Utilization on Low Limit Question

I have two extra phone lines on my phone bill that are no longer in use (family plan gone sour) but i am being carged for, and it's setting me back by a lot. I know it's not the best idea in the world but it's my only real option for a quick fix... i wanted to cut the phone lines($150 each) and charge them to my credit card. It would be maxed out (or if I did one at a time it would be at 50%), but paid down quickly. honestly i hardly use it except for unplanned things so my utilization is never perfect, i either use too much or too little. right now I'm at about 33%. I just feel that the high utilization for a short time (2 months tops) would be better than the alternative, which is wasting money on these phones nobody is using for the next YEAR.

 

thoughts?

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Message 1 of 8
7 REPLIES 7
StartingOver10
Moderator Emerita

Re: High Utilization on Low Limit Question

I think you have made a great financial decision. It is far better to have high utilization for 2 months while you cut the un-needed expense from your budget. Just don't app for new credit in the meantime.

 

It is more important to make sound financial decisions, like cutting the unused phone lines, than it is to have low utilization every month. The time that FICO scores are the most important is when you apply for new credit. It is less important if you aren't in the market for credit. The most important thing is sound financial decisions, like the one you are making now about cutting wastefull expenses. Smiley Happy

Message 2 of 8
takeshi74
Senior Contributor

Re: High Utilization on Low Limit Question

Utilization is determined at the point in time thatyour credit is reviewed.  When you increase your utilization your scoring will see a hit but it will rebound when your utilization drops.  2 months shouldn't be an issue.  High utilization with only minimum payments, on the other hand, can lead to AA.

Message 3 of 8
godwit
Member

Re: High Utilization on Low Limit Question

so since i don't plan on applying for credit in the next 6-9 months i should be fine to cut down on expenses in this way? I make it a point to pay at least 25 dollars a week when I have a balance, well above the minimum monthly payment Smiley Happy

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Message 4 of 8
coldnmn
Mega Contributor

Re: High Utilization on Low Limit Question

You'll be fine Fico scores concerning utilization has no memory once paid down and reported.

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Message 5 of 8
Startome
Regular Contributor

Re: High Utilization on Low Limit Question


@StartingOver10 wrote:

I think you have made a great financial decision. It is far better to have high utilization for 2 months while you cut the un-needed expense from your budget. Just don't app for new credit in the meantime.

 

It is more important to make sound financial decisions, like cutting the unused phone lines, than it is to have low utilization every month. The time that FICO scores are the most important is when you apply for new credit. It is less important if you aren't in the market for credit. The most important thing is sound financial decisions, like the one you are making now about cutting wastefull expenses. Smiley Happy


 

 

+1

Wonderfully put =)

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Message 6 of 8
SunriseEarth
Moderator Emeritus

Re: High Utilization on Low Limit Question


@StartingOver10 wrote:

I think you have made a great financial decision. It is far better to have high utilization for 2 months while you cut the un-needed expense from your budget. Just don't app for new credit in the meantime.

 

It is more important to make sound financial decisions, like cutting the unused phone lines, than it is to have low utilization every month. The time that FICO scores are the most important is when you apply for new credit. It is less important if you aren't in the market for credit. The most important thing is sound financial decisions, like the one you are making now about cutting wastefull expenses. Smiley Happy


+1

 

To the OP, FICO scores don't have a memory.  Just make sure UTIL gets lowered before you decide to seek new credit.  Since I know you'll be Gardening, this is another good reason to keep gardening.  Long-term, I don't see any issue here at all.  



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Message 7 of 8
godwit
Member

Re: High Utilization on Low Limit Question

Thank you! I had no idea that there wasn't any memory when it came to how much I was using! I've been learning this whole credit/money management thing as I go so I am SO thankful I found this forum Smiley Happy
Capital One Secured: $300 | VS Angel $750
Message 8 of 8
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