Utilization question, please help! My scores are just cruising and not really going up :(

[Rebuilding69]

Who has $30000 in credit limits with a few cards being $300 limit each? And why would they ever charge $200 per $300 card when it's way smarter to put that $600 on a much larger card?

Your example makes no sense in the least bit.

[Anonymous]

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@DeeBee78 wrote:

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@CH-7-Mission-Accomplished wrote:

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@DeeBee78 wrote:

In addition to your overall utilization, there is also the per-account utilization you need to be concerned about. Every single one of those accounts reporting greater than 30% utilization is dragging your score down. Individual utilization comes first, overall comes second. 

Get those accounts below 30% and you should see some score improvements. 

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This is not true.  Overall utilization is the important number.  Individual utilization does not matter unless a cardis at or over 90%.  This is an urban myth.

Do you honestly think that if someone has threel $300 Comenity cards with a balance of $200 on each card (a total of $600 owing) is more important than the fact that the person owes $600 and has $30,000 in available credit?

John Ulzheimer, who worked for FICO, verified this.  His comment was "FICO isn't stupid."

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From Creditcards.com:

To more accurately gauge your risk of nonpayment, the widely used FICO scoring model not only looks at overall debt in comparison to total credit limits, "the scoring formula also looks at utilization on the individual cards that make up the overall utilization percentage," says Barry Paperno, consumer operations manager at myFICO.com. 

Please don't say individal utilization doesn't matter, because it absolutely does. 

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I have seen this with my own Fico - I have a small secured card of 250 and I wanted to show usage so I bought something for 119 and paid it down to about 40.  During the next month, I made an additional purchase using PayPal and didnt notice I had the secured card as the payment method.  This was for 90 and the account reported.

My scores were down by about 3 to 5 points each and I Iooked at all accounts and factors.   I realized this one was well above 50% UTI.  I made additional payment and brought it down to under 20% and the scores rebounded.

Coincidence?  I think not.

I am keeping all CCs under 10% as well as all combined under 10%.

[braznyc]

I've done my own research with this utilization and it's true (insofar as I can see for me) that all cards need to be under 30% and of course lower. My overall utlization at one one point was 16% but once I got those toy card limits down further my scores shot up. Hey I can't say this is an exact science but the idea of keeping all cards under 30% works at least, and of course lower seems to really raise your scores - well it did for me. I will see what having only 1 card reporting a small balance will do for me next month. I will say I'm trying to learn good habits because I refuse to watch my scores like this past next month. I don't like the obsessiveness that seems to happen with fico watching

[Anonymous]

The simple answer is YES individual and total utilization both matter. The biggest impacts seem to occur at <30%, then <20%, then finally between 1-9%. Someone else has noted what it says according to Fico, and there is plenty of anecdotal evidence to validate that having all your cards individually below 30% and totally below 30% will give you a nice score bump, in addition to getting to the point where all report a zero balance and just 1 has a balance between 1-9%

I know from first hand evidence that this is the case. I leave it to others to argue the particulars. It is for this personal reason that I am a great advocate of the Debt Snoball Method of Debt Reduction. That method states that regardless of which card has the highest interest rate, you pay off the card with the SMALLEST balance first. Once that card is paid off, you do NOT use it. Then move on and pay off the card with the second lowest balance. You continue this process.

Why? Being in debt is more of a function of not having a plan, your mindset or psychology, and a lack of discipline than it is a function of lack of resources. Yes a lack of resources or income plays a part. I have to say this to avoid being attacked. Get a plan, stick to a plan, know where your money is going, follow a budget, stop spending for frivolous stuff, change your mind about money and debt, and be determined to pay your debt down and off.

If you do this, then you will not only see your score increase greatly, especially once those baddies fall off, but your whole perspective will lift.

Best wishes. Pay those cards down. Snowball your debt.

[BrianKill]

Just have all cards report 0 except one card, and let that card report $5.  Then you don't have to worry about it.