Ideal utilization across cards and frequency of use

[buskels]

I'm in clean-up mode and will keep plugging away at that (slow and steady). As I'm doing that, I'm wondering if there is way to improve score by changing utilization where I can on cards with balance transfers. Also, looking for advice on frequency of use for rarely used cards and how that affects credit score.

Score: 742 (myfico).  Most recent items affecting: Vehicle refinance, Mortgage refinance (for lower rates, terms, payments). 

This exercise is mainly just about seeing if I can improve score as I'm paying things off. I won't be seeking new cards or credit (I may consider a loan in the future but not right yet). I am closely tracking that every balance goes down each month paying off a card as I can. I use some cards for most purchases (gas, etc) to get the rewards, paying off all new purchases (+ extra) before statement close and when sufficient rewards accumulated, putting that towards payment.

Questions:

1. What would be ideal target utilization goals to be at for each card?   
2. I have some BT's available and was considering moving some around to reduce utilization on other cards (paying 3% transfer fee immediately so no additional debt).  Would it make sense to increase utilization on one card to get another card(s) utilization down
   Example 1: BT on BofA card: 38% to 46% (Discover: 50% to 35%)
   Example 2: BT on BofA card 38% to 45%, (Walmart: 58% to 50%)
   Example 3: BT on BofA card (2) 38% to 53%, (Walmart: 58% to 50%, Discover: 50% to 35%)
3. If doing BT, what is the maximum utilization to have? 50%, 60%, 70%, other?
4. For the 0% utilization cards: Some of these I rarely use but try to use a few times per year (I had a card closed for not using for 3 years and don't want that to happen again).
   1. Should I be using these on a more regular basis? 
   2. If so, what frequency? 
   3. Should there be a statement balance or should I just pay in full and keep at a 0 balance?

Thank you in advance for any advice.

Overall utilization: 43%

64% - BofA (16.99 APR)
38% - BofA (21.24 APR)
48% - Capital One (22.9 APR)
0%  - Capital One (16.05 APR rarely used)
0% - Capital One (24.9 APR rarely used)
0% - Capital One (25.15 APR rarely used)
13% - Kohls (21.9 APR)
14% - Home Depot (22.9 APR)

0% - Best Buy (29.99 APR rarely used)
58% - Walmart (22.9 APR)
57% - Amazon Chase (19.24 APR)
22% - Citi (17.24 APR)
50% - Discover (17.24 APR)

[SouthJamaica]

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@buskels wrote:

I'm in clean-up mode and will keep plugging away at that (slow and steady). As I'm doing that, I'm wondering if there is way to improve score by changing utilization where I can on cards with balance transfers. Also, looking for advice on frequency of use for rarely used cards and how that affects credit score.

Score: 742 (myfico).  Most recent items affecting: Vehicle refinance, Mortgage refinance (for lower rates, terms, payments). 

This exercise is mainly just about seeing if I can improve score as I'm paying things off. I won't be seeking new cards or credit (I may consider a loan in the future but not right yet). I am closely tracking that every balance goes down each month paying off a card as I can. I use some cards for most purchases (gas, etc) to get the rewards, paying off all new purchases (+ extra) before statement close and when sufficient rewards accumulated, putting that towards payment.

Questions:

1. What would be ideal target utilization goals to be at for each card?   
2. I have some BT's available and was considering moving some around to reduce utilization on other cards (paying 3% transfer fee immediately so no additional debt).  Would it make sense to increase utilization on one card to get another card(s) utilization down
   Example 1: BT on BofA card: 38% to 46% (Discover: 50% to 35%)
   Example 2: BT on BofA card 38% to 45%, (Walmart: 58% to 50%)
   Example 3: BT on BofA card (2) 38% to 53%, (Walmart: 58% to 50%, Discover: 50% to 35%)
3. If doing BT, what is the maximum utilization to have? 50%, 60%, 70%, other?
4. For the 0% utilization cards: Some of these I rarely use but try to use a few times per year (I had a card closed for not using for 3 years and don't want that to happen again).
   1. Should I be using these on a more regular basis? 
   2. If so, what frequency? 
   3. Should there be a statement balance or should I just pay in full and keep at a 0 balance?

Thank you in advance for any advice.

Overall utilization: 43%

64% - BofA (16.99 APR)
38% - BofA (21.24 APR)
48% - Capital One (22.9 APR)
0%  - Capital One (16.05 APR rarely used)
0% - Capital One (24.9 APR rarely used)
0% - Capital One (25.15 APR rarely used)
13% - Kohls (21.9 APR)
14% - Home Depot (22.9 APR)

0% - Best Buy (29.99 APR rarely used)
58% - Walmart (22.9 APR)
57% - Amazon Chase (19.24 APR)
22% - Citi (17.24 APR)
50% - Discover (17.24 APR)

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1. Ideally you should have most revolvers report zero balance, and none reporting greater than 28%, with overall utilization not exceeding 8.9%

2. Rarely would it be worth the balance transfer fee to use balance transfers to accomplish improved utilization numbers; if you had cards with no balance transfer fee then it might pay.

[Anonymous]

Frequency of using CCs in and of itself cannot impact Fico scores.  What I mean is if someone swipes a card once every 4 months verses swipes the card 10 times a month every 4 months, the 1 swipe compared to the 40 swipes is a non factor so long as the utilization percentages reported are the same. 

Where it can indirectly become a factor is if you have CCs closed down for non use.  I say indirect because it again isn't the [lack] of usage that would lower your score, but possibly an increase in overall utilization if cards are closed and you lose those limits from your utilization denominator, while your numerator (reported balances) remains the same.  To avoid having to even worry about this, it's generally recommended that one put at least a swipe on every card every 4-6 months or so.  Some lenders will let you go a year or longer and not close your cards, but others like Wells Fargo have been known to pull the plug in as little as 4-6 months. 

[dynamicvb]

This may make sense if you had a 0% promo on a card, but since there is not a lot of difference in the interest between these, I think I would just keep trying to chip away at the balances as much as possible.

[buskels]

Thank you. I did have that happen once.  It didn't really do much anything luckily becuase it was a small card ($500) and not the oldest.

[buskels]

What would be best targets to hit for each card that could improve scores over time.  Getting to the ideal will take time.

Credit Karma indicated get 50% to 49% for one and it could improve.   

[buskels]

I think this is what I was looking for.  Copy/pasted from: https://wallethub.com/answers/best-credit-utilization-ratio-2140666075/

Here are the best credit utilization ratios:

• 1% - 9%: This is the ideal utilization. Using this amount of your credit will help your score improve fastest, assuming that you make all your payments on time and are otherwise responsible.
• 0%: Believe it or not, 0% isn’t the best possible utilization. Creditors like to see that you can handle making charges and paying them off without overspending. That said, 0% utilization is a lot better than high utilization, so it’s the way to go if you don’t trust yourself to spend within your means.
• 10% - 29%: This is B-level credit utilization, if you’re using letter grades. The low end – 10% – is a B+, bordering on A-. The high end – 29% - is closer to a C. In short, your spending isn’t overly concerning at this level, but it’s not low, either.
• 30% - 49%: Credit utilization in this range will get you a grade of “C” from WalletHub’s Credit Analysis tool. It’s not exactly praise-worthy, but it won’t hold you back too much, either. Still, the more accounts you have with credit utilization at 30% or above, the worse it is for your credit score.

Here are the worst credit utilization ratios:

• 100%+: Maxing out your credit is a big red flag and paints you as irresponsible. You can definitely expect some credit score damage. Some issuers may even give you a penalty APR on future purchases if you use 100% of your credit.
  If you go over your limit, your card may simply be declined. If the transaction goes through, you may have over-limit fees to contend with in addition to credit score damage. But you only have to worry about such fees if you’ve opted-in to be allowed to spend over your limit.
• 90% - 99%: 90% credit utilization is a bad milestone for your credit score, as it means you’ve nearly maxed out at least one credit card account. And the more accounts in this boat, the further your credit score will sink.
• 50% - 89%: 50% is an important threshold for credit utilization. Data show the more accounts you have with 50%+ utilization, and the higher their utilization rates are, the more likely you are to be experiencing financial difficulties. And that makes you a risky borrower in lenders’ eyes.

So you definitely want your credit utilization to be less than 50%. You should always try to keep it below 30%. And below 10% is ideal.