@Anonymous wrote:Hello everyone, I have a few questions about utilization that I am wondering about. Is it better to have one or two cards have a high utilization, say 80% or 90% and all of the other cards lower at 0%. I am thinking about transfering all of my balances to one or two cards which will put them up there and the other cards will go to 0% or should I keep balances on all of the cards? My current UTL is 16%. I am wanting to do this to cut down on interest and payments, two payments vs 10 and 9% vs 15-19%. I dont want to hurt my scores though. What should I do?? Thanks in advance for your advice
If you have some low interest cards you could probably move some of those funds into those cards. But don't overload them. I would reccommend no more than 50% utilization on any one card. But remember all you really are doing is consolidating your debt to fewer cards. While it might make it slightly easier to to keep account of your payments, you could take a temp hit on your CS. The good thing is that CS don't keep a history and are generated for the moment they are requested.
What you really should be after is successful repayment of all debt and paying the least amount of interest and not worry too much about the CS for now. If moving funds around to low interest cards helps you do this then go for it. But if it means that you will continue to rack up charges on existing cards even after moving funds around then it doesn't help at all. Once you free up some cards, sock drawer them until you reign in your total debt.
Starting Score: EQ 732 October 2007; Current Score: EQ 839; TU 865, July 2022;
@user5387 wrote:
@lg8302ch wrote:I did a small test on my profile with revolving accounts only. The number of accounts reporting a balance was way stronger than the high util on 1 card. Test was with reporting 1$ balances on 8 of 8 cards = score dropped to 738. Then tested reporting 90% on Discover and 7 cards 0 balance = score 786 ...This was with a very low overall util. So I do not know what would be with higher overall util. I did this little game last year before I got the 9th card. To my big surprise Fico did not punish me for high single card util as long as overall util stays low.
This might have something to do with bucketing, and 8/8 cards with balances, or 90% utilization, might mean different things in different contexts.
Having tiny balances on all your cards is not a risk by itself, but it might mean that your financial affairs are disorderly, and maybe that matters in some cases.
The last time I carried a balance, it was around 50% utilization on a single high CL card, with around 15% overall utilization, and I think I gained around 40 points when I paid it off.
Not sure, when I maxxed my 1K and subsequently 3K Amex I lost 14 points identically each time (something like 13 and 27% total utilization) on Beacon 5.0 with my mixed file. This most recent time maxxing out the Amex at 9K (all times have been north of 98% utilization on the single tradeline) I dropped 21 points at a 44% total utilization.
Assuming there's a ding at 10% and subsequently on the order of 33%, LG's 10ish point loss seems reasonable to me.
Do have to ask, was your measurement on a FICO '08 score or '04/'98? May be penalizing differently, wouldn't surprise me to find that's the case actually. Unfortunately I have a silly tax lien on it which smashed my Wally score, and as such that probably vastly overweighs the utilization so I only lost 11 on TU FICO '08: am estimating I would've gotten slapped harder if I hadn't already been kicked into the gutter with the tax lien (which dropped me ~40-50 on '08 models).
ETA: carrying a balance for some period of time can cause a rebucketing event; couple of people have reported anecdotally that their scores didn't shift until a few months after paying the revolving debt down. Not certain if that was the case here or not but for completeness tossing it out here.
