Hello,
New to the group here. 
so, I know 30% of the score is based on credit utilization and I would like to optimize this part of my score but my question is I only have 3 credit cards of $300 each. If I bring my utilization down to let's say 3% would I get the most points on this portion or do I need do I need higher limits?
thank you all!
@glendazamot wrote:Hello,
New to the group here.
so, I know 30% of the score is based on credit utilization and I would like to optimize this part of my score but my question is I only have 3 credit cards of $300 each. If I bring my utilization down to let's say 3% would I get the most points on this portion or do I need do I need higher limits?
thank you all!
Limits are not a directly scored metric, and you do not need higher limits to increase the score contribution of your utilization. Limits are the denominator of utilization, so CLI's are one way to help your score if your utilization is high, but all FICO is concerned with is the ratio of reported balance to limit, not the limit in and of itself. If you have three cards w/ $300 limits, having an aggregate utilization of $84 dollars or less will be as effective for you as having an $8,400 agg balance would be for someone with $90k TCL. If you want to make sure you're optimizing your profile as much as possible, you can implement something called "AZEO" here (all zero except one): have one of your national bankcards report a small balance of maybe $10-$20, and have your other two cards report $0 balances. This will make sure that you're getting as much out of metrics like utilization, dollars owed, and accounts with a balance as your profile allows without taking the all-zero penalty.
@glendazamot wrote:@Anonymous Oh no!!! So how can I maximize this 30% in a whole?
following previous advice and what else? Other than the credit cards I just have a car payment. Original Loan amount $16,800. Owe about 6k on it.
thank you for the help!!
So amounts owed factors in total debt. Best way to maximize scores is to of course minimize debt as much as possible. For your car loan, if you can bring it down to about $1500 left, that'll maximize your installment loan balance, which will help with the 30% credit mix.
