You also need to consider specific models and not just "FICO". FICO has many models used by creditors/products. Scores for mortgages are typically one of the older models. See also the Understanding FICO Scoring subforum and its stickies.
Also make sure you're considering relevance of model & CRA to a given creditor/product. FICO 9, for example, has not really been adopted by creditors AFAIK. Another example: if a creditor/product uses an EQ FICO 8 Bankcard then a TU FICO 8 will not matter. Only the specific model(s) and CRA(s) -- multiple pulls may be done in certain situations -- considered by the creditor will matter in that creditor's decision.
You can use whatever model you want for monitoring trends for your credit but don't rely on one model/CRA by itself to determine what creditors will pull for you.
@Powertripper wrote:
No matter how many C/C's you have, one's ultimate goal is to ALWAYS carry a balance on JUST ONE; and never greater than 9% util
Don't conflate carry and report. They are two entirely different things. It is is possible to have a balance report even if you're paying the statement balance in full every cycle and not carrying a balance. If you're carrying a balance then you're going to have a balance report. You want to pay every statement balance in full to avoid incurring debt and interest. If you are subject to interest it can take 2 cycles of paying in full to address residual interest.
To optimize revoling utilization you only want one balance to report at a very low %. You do not need to carry a balance for scoring purposes. Whether or not a balance report depends on when you pay the balance in full. Pay in full before the report date and no balance reports -- or pay down the balance before the report date and the reduced balance reports (make sure to pay the remainder of the statement balance by the due date). Pay the balance after the report date and the balance reports as-is.
This is not an "ultimate goal" and you don't need to constantly do this. There are some who choose to constantly do this but it is only suggested when applying for credit and when looking to eke out as many points as possible. On an ongoing basis just keep it under 30%. Revolving utilization is detemrmined based on currently reported balances and limits. It does not consider prior data that is not in the report. You can drop revolving utilization when needed as your scores will reflect the change.
I don't bother with this because my spend and limits have been putting my revolving utilization at about 6%. Even with most of my cards reporting balances I have FICO 8's above 800. I didn't even bother when applying for a mortgage with Chase and qualified for best terms. There is a lot of general advice on maxing score but you really should watch your scores to see if the effort is worth the results for you.
Try to understand the reasons and don't just memorize steps. If you do the former you'll build the knowledge and tools to address different situations. The latter is of limited use and there are so many permutations of situaitons that you aren't going to be able memorize specific steps for every possible combination of situations out there. The best analogy I can think of is following a recipe versus learning to actually cook but there are probably better ones out there. If you only follow a recipe then you can only make what the recipe is for. Learn to cook and you're better equipped to make different dishes.
To summarize the info you need to understand that I can recall off the top of my head with respect to revovling utilization:
- Avoid exceeding 30% revolving utilization. That's not, hower ideal which is typically under 10%.
- Both individual and overall revolving utilization matter.
- Number of balances also plays a part with fewer generally being better.
- While lower revolving utilization and lower number of balances are generally better you don't want all of your revolving accounts reporting 0 balances as there is a hit for that.
- Short term high utilization generally isn't an issue as you can get it down the next cycle and recover. However, prolonged high revolving utilization can lead to trouble.
- If desired and if there would be significant impact, to optimize revolving utilization such as when applying for new credit, requesting CLI's, etc, allow only one balance to report with a very small %.
- To reduce/eliminate a reported balance you need to pay down/off the balance prior to the report date for the account. While most cards report on statement date there are some that do not. US Bank, for example reports on the last business day of the month.
There is, however, a lot more to understand than just your bullet points and revolving utilization. One thread isn't going to summarize everything there is to know about credit into bullet points. Definitely consider the other threads, subfora, stickies, etc as well.
