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Question on “balance” in utilization

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sarge12
Senior Contributor

Re: Question on “balance” in utilization


@Anonymous wrote:
Thank you for all the great feedback. I found an article that seems to imply it’s possible they may use the highest balance, but as some of your replies have stated, possibly the author is referring to specific banks like Chase.

Bottom of second paragraph:
“Make it a rule to keep your balance below 30% on all of your cards at all times” (at “all times” is italicized in the article for emphasis)
Article: https://www.nerdwallet.com/blog/finance/credit-utilization-improving-winning/

Thanks again for the feedback,

Besides the fact that the relevant percentage is <28.99%,  the part about at all times is also not exactly correct. It can go to 70% without penalty if paid down prior to the statement cut date. The utilization is normally using the statement balance, and the balance that is paid before the statement cuts is not even shown on the report. Also utilization is a point in time metric, meaning someone who has higher utilization for six straight months but gets the utilization ideal will then have the same score as someone who always had low utilization if all else is equal. This is why many argue that the only time you need to do the AZEO method is a little while before a hard pull. I, myself while agreeing in pricipal, do keep low utilization always, as it establishes good credit habits and allows you to get a good hp without planning in advance.

TU fico08=824 06/16/24
EX fico08=815 06/16/24
EQ fico09=809 06/16/24
EX fico09=799 06/16/24
EQ fico bankcard08=838 06/16/24
TU Fico Bankcard 08=847 06/16/24
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 11 of 13
EAJuggalo
Established Contributor

Re: Question on “balance” in utilization

I believe the tiers are set at 10%, 30%, 50%, 70%, 90% and 100%  One of my cards reported at 101% last month and my score dropped 12 points, card reported at 35% this month and my score went up 26 points.

EX700 TU 704 EQ 694 4/03/22
Cap1 QS-$4,500 Chase Freedom Flex- $800 Chase Freedom Unlimited- $1,000 Victoria's Secret- $1,200 Citi DC- $800 Amazon Store Card- $3,500 AMEX Hilton Honors-$1,000 Discover It-$1,000 Wal-Mart MC $290 Chase Sapphire Preferred-$5,000 NFCU Flagship $13,800 AMEX BCE-$1,000 AMEX Gold-$5,000 AMEX Delta Blue $1,000 Lowe's $5,000 Navy Platinum $17,000 AMEX BBP $2,000
Message 12 of 13
Thomas_Thumb
Senior Contributor

Re: Question on “balance” in utilization


@EAJuggalo wrote:

I believe the tiers are set at 10%, 30%, 50%, 70%, 90% and 100%  One of my cards reported at 101% last month and my score dropped 12 points, card reported at 35% this month and my score went up 26 points.


Although the tier boundries of 10%, 30%, 50%, 70% and 90% appear to be correct for Fico, in practice real numbers are bumped up to the next whole number (integer). Thus, practically speaking 9.1 would get bumped up to 10 and place the data point in the 10% to 30% classification.

 

Nice data point on the above 100% - this one is still under some debate. What was your aggregate utilization before/after the 100% on the card?

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 13 of 13
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