Quick question regarding Utilization.......

memevertical · ‎08-13-2010

Ok, so I understand that for optimum FICO score, I should use only half of my credit cards, and the ones I will use, keep them under 10%.....but what if I only have 3? Should I Use only 1 or only 2?

Thanks!!

laz98 · ‎08-13-2010

@memevertical wrote:
Ok, so I understand that for optimum FICO score, I should use only half of my credit cards, and the ones I will use, keep them under 10%.....but what if I only have 3? Should I Use only 1 or only 2?

Thanks!!

you can use all of them as much as you want, just make sure that you are in control of how much gets reported when your statements generate.

RobertEG · ‎08-14-2010

My advice starts with what may appear to be an unrelated questiion,but in fact, it is not.

When do you expect to apply for new credit?

Percent util of revolving credit is the one category of credit scoring that has no prior historical memory of prior reporting.

So if, and when, you decide to apply for new credit, just get your % util criteria under control at least a month or two before you apply.

Only your current credit reporting enters into revolv % util scoring.

I dont mean to infer by that statement that you should not maintain your % utils as low as possible at all times. Having high % utils over a period, even when you dont need it for immediate FICO score for an application for new credit, can lead to other unwanted impacts, such as the creditor reducing your credit limit, or even closing your account.

Buy when it comes to current monthly FICO scoring, the number of accounts showing balances is a minor concern that only becomes important when actual application for new credit is sought. With three accounts, at that time, have no more than one report any balance. That is monthly, fine tweaking.

memevertical · ‎08-14-2010

@RobertEG wrote:
My advice starts with what may appear to be an unrelated questiion,but in fact, it is not.
When do you expect to apply for new credit?
Percent util of revolving credit is the one category of credit scoring that has no prior historical memory of prior reporting.
So if, and when, you decide to apply for new credit, just get your % util criteria under control at least a month or two before you apply.
Only your current credit reporting enters into revolv % util scoring.
I dont mean to infer by that statement that you should not maintain your % utils as low as possible at all times. Having high % utils over a period, even when you dont need it for immediate FICO score for an application for new credit, can lead to other unwanted impacts, such as the creditor reducing your credit limit, or even closing your account.
Buy when it comes to current monthly FICO scoring, the number of accounts showing balances is a minor concern that only becomes important when actual application for new credit is sought. With three accounts, at that time, have no more than one report any balance. That is monthly, fine tweaking.

Thanks for the explanation!

Now, look at this scenario and tell me if it looks reasonable. I have 3 CC like I said, so, If one of them I use it along the month and pay it on the due date, most probably it will report some balance to the CRA's right? And I also plan to use the other 2, but the same day I use them I plan to PIF, so that most probably it will send a balance of 0 to the CRA's, does that make sense?