Utilization Question

[Deyon22]

Quick question: I understand you are supposed to keep my utilization at no ore than 30%. 

If I have 3 cards, is that 30% on each card or 30% of my total credit lines?

[Thomas_Thumb]

Fico looks at the following criteria in scoring associated with credit cards:

1. Aggregate utilization for all cards combined - it is preferrable to keep this under 9%.

2. Highest utilization on individual cards. Keeping any card that reports under 29% is preferrable while also doing #1.

3. Quantity and/or % of cards reporting balances. Having 100% of cards report balances typically drops EQ and TU score - unless a profile only has 1 card. A 1 card profile should always report a monthly balance to avoid the " no recent revolving activity" penalty. 

Some posters adhere to all zero except one (AZE1) when managing balance reporting on credit cards. That can maximize credit score but is unnecessary for building credit over time.

For a 3 card profile allowing 1 or 2 cards to report balances under 29% while keeping aggregate under 9% will maintain a near optimal condition. If some modest monthly score fluctuations are ok, higher utilization levels can be reported without risk of adverse action. Just stay below 49% reporting on cards and 29% in aggregate to mitigate AA risk.

[Anonymous]

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@Thomas_Thumb wrote:

Fico looks at the following criteria in scoring associated with credit cards:

1. Aggregate utilization for all cards combined - it is preferrable to keep this under 9%.

2. Highest utilization on individual cards. Keeping any card that reports under 29% is preferrable while also doing #1.

3. Quantity and/or % of cards reporting balances. Having 100% of cards report balances typically drops EQ and TU score - unless a profile only has 1 card. A 1 card profile should always report a monthly balance to avoid the " no recent revolving activity" penalty. 

Some posters adhere to all zero except one (AZE1) when managing balance reporting on credit cards. That can maxamize credit score but is unnecessary for building credit over time.

For a 3 card profile allowing 1 or 2 cards to report balances under 29% while keeping aggregate under 9% will maintain a near optimal condition. If some modest monthly score fluctuations are ok, higher utilization levels can be reported without risk of adverse action. Just stay below 49% reporting on cards and 29% in aggregate to mitigate AA risk.

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Well said.

One will find that with enough credit limits, you can easily keep overall ulitization under 9%.  However, a simple credit card can easily place you over a limit.  One home depot card, one lowes, one Synchrony card you could easily spend it's limit in a single go simply because their limit offered isn't enough.   For instance, AMEX may offer you up to a 30k + limit each application, but a home depot card may offer a few thousand to up to ten, no matter your profile status.

How you manage that payment is up to you, but this is where I place overall ultilization to triumph over all.   I find most everything else to only be minor score and temporary readjustments.