Question about reporting

Hokies2379 · ‎12-23-2016

Not really sure how this would work.

Let's say I have 3 credit cards.

1 has a 5k balance/5k limit.

1 has a 3k balance/5k limit and

1 has a 0 balance and 5k limits.

When they're open that reports as 8k balance vs 15k limit. What would happen if I closed the two cards with balances but continued to pay? How would that REPORT? Would it now report 0/5k or would it report 8k balance and 5k limit and therefore look like I have over 100% util?

Just curious.

heavyjay · ‎12-23-2016

The trade lines could report either way depending on how the CRA formats them, but FICO would use 8k balance and 5k limit for scoring purposes.

FICO 08:Jan 18, 2017: EX 800 EQ 725 TU 799
FICO 08:Feb 10, 2017: EX 788 EQ 772 TU 791 (post New Year's app spree)
In the garden as of 1/4/2017. Will remain for all of 2017.

Anonymous · ‎12-23-2016

HeavyJay is right. And it is even a bit worse than that.

As HJ observes, your total utilization would be 8k / 5k = 160%. I.e. very bad.

But you would also be at over 100% individual utilization on two different credit cards too. This was confirmed twice this year, I believe. The most recent guy wrote in baffled as to why his score had taken a dive when his total utilization was in the area of 1-5%.

Turns out that he had one card that had been closed recently and on very close inspection (about halfway through the thread) he realized that the closed card was reporting with a balance of $5. FICO was considering that card to have a credit limit of $0 (since it was closed) and therefore his balance of $5 made it more than 100% maxxed out.

FICO administers penalties for both individual and total utilization.