Utilization Difference

Anonymous · ‎04-09-2018

So I have a card that is currently at a 4.78% utilization and while I can pay it off to 0%, the problem is until the returns hit I am not sure what that will be. It should be easy but the amount I calculated is different from theirs and they dont know why. Interest is not a factor here.

The question I have is, I know 0% is always best as long as you have one card at least with something on it on the report, but is there a real difference in scoring when it comes to having a 5% utilization?

thornback · ‎04-09-2018

The scoring comes in to play when utilization passes either above or below a threshold. The lowest threshold is 8.9% -- so long as your util stays below that amount, you should see no change in score.

@Anonymous wrote:
So I have a card that is currently at a 4.78% utilization and while I can pay it off to 0%, the problem is until the returns hit I am not sure what that will be. It should be easy but the amount I calculated is different from theirs and they dont know why. Interest is not a factor here.

The question I have is, I know 0% is always best as long as you have one card at least with something on it on the report, but is there a real difference in scoring when it comes to having a 5% utilization?

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Anonymous · ‎04-09-2018

I'm not quite following you here. What do you mean by when the returns hit?

Percentages are not really a factor here. The factor that could matter here (key word "could" as it very well may not) would be number of cards with balances reported.

Some people see a slight score drop when going from AZEO to AZE2, where others see no score drop at all. How many total cards do you have? If it's 6+ the chances of going from AZEO to AZE2 is very small. If it's less than 6, the chances of seeing a slight score drop increase with the fewer cards you have, as the percentage of cards with balances would go up.

Anonymous · ‎04-09-2018

I have some returns pending but not yet reflecting on the current balance and I dont want to pay over and go into negative lol.

I have 13 cards with 6 having balances and others at 0

Anonymous · ‎04-09-2018

Thank you!

Anonymous · ‎04-09-2018

@AnonymousI have some returns pending but not yet reflecting on the current balance and I dont want to pay over and go into negative lol.

I have 13 cards with 6 having balances and others at 0

It's not a big deal if you over pay. If you bring your account balance below zero, they'll either send you a check for the negative amount or simply carry that negative over to the next period where you can swipe your way back up to a $0 balance.

At 6/13 cards with a balance, you're below 50% of cards with reported balances, so the penalty associated with that should be avoided. I believe on EQ a ding comes from being above 33%, so going from 6 cards to 5 with reported balances likely wouldn't have an impact on any of your scores. Going from 5 to 4 though could result in a few EQ points, as that would mean dropping to under 33% of revolvers with a balance reported.

Anonymous · ‎04-09-2018

Oh okay that is good to know then!

HeavenOhio · ‎04-10-2018

@thornback wrote:
The scoring comes in to play when utilization passes either above or below a threshold. The lowest threshold is 8.9% -- so long as your util stays below that amount, you should see no change in score.

A small number of people have reported being dinged at less than 8.9%, possibly around 5%. And as BBS says, some people get dinged with a second card reporting a positive balance, even if they have several cards. I fall into both of those categories.

But these dings are minimal and certainly not enough to worry about. If you're the type who wants to know exactly how your score is affected by the amount of your balances or the number of cards with balances, you can safely experiment to find out how your profile is affected. Bring yourself to AZEO with a very low balance on one card. That'll give you your best possible score. After that, play around a bit to see if you're dinged or not.

Anonymous · ‎04-10-2018

I was thinking of testing it a bit. Thank you all for the help!

Anonymous · ‎04-10-2018

@HeavenOhioBring yourself to AZEO with a very low balance on one card. That'll give you your best possible score. After that, play around a bit to see if you're dinged or not.

Agreed that AZEO with a low balance on one card = greatest scoring potential. There was someone on the forum that recently made the claim that 2+ cards reporting balances resulted in better scores than AZEO, a claim that I have never heard from anyone else. Until I hear additional data points suggesting that his claim was valid, AZEO is the way to go for score maximization.