8.9% vs 0% Single Card Utilization

[Anonymous]

So I am trying to figure out this one specific detail.. does the FICO ding anything over 0% utilization on specific card balances?

For instance, I have multiple cards I keep balances on, most under 30%, 1 is really high as I had to pay somethings, but I have quite a few under 8.9%. My question is, if I paid those cards that are under 8.9% off and not really touch the others, would the FICO really make a difference? Overall utilization is under 28.9% btw.

[Anonymous]

This is more of a number of cards with balances question than a question about utilization.  Number of cards with balances can impact FICO scores.  If talking specifically FICO 8 scores, there could be around a 15 point difference in your scores if you have all of your cards with reported balances verses just 1.  It varies from profile to profile and even from bureau to bureau.  For example, my EX FICO 8 scores don't budge whether I have all of my cards with balances or just 1. 

If you have 1 card with [relatively] high utilization, that's the one that will ding you in terms of highest individually utilized account.  All of the others that are lower than that won't impact that factor, but of course will impact aggregate utilization which you said is under 28.9% and therefore not in a terrible place.

[Anonymous]

Hm okay lets consider this;

the teenager has one discover card under 8.9% and she has a loan. Would it be wise to pay that card down to 0% or should I ensure there is something on it? I was considering getting her another card, and have her alternate the usage so one card is 0 and th eother is under 8.9%.

[Anonymous]

If one only has a single revolver (no others) on their CR, having it report a $0 balance will result in a "no recent revolving credit use" penalty, which could harm scores to the tune of 15-20 points.  Allowing a small balance of say $5 - $20 or anything really up to 8.9% of the limit will keep those 15-20 points from going away.

If this person were to obtain a second card, the most beneficial [scoring] scenario would be to report a $0 balance on one and a small balance on the other every month.  There is no benefit to alternating between the cards in terms of which one reports the $0 balance or the non-zero balance.

[Anonymous]

Ah okay gotcha. I might do that then!

[Anonymous]

Darn I meant to ask then, if one is paying cards down, would it be better to pay down cards to under 8.9% then move on to the next card to do the same until they are all down below, then start paying off? assuming interest isnt a factor at this point.

[Anonymous]

If interest isn't a concern, from a pure scoring perspective you want to pay all cards down across each threshold point, thus reducing your "highest individual utilization" account as often as possible.  That being said, you'd want to take all cards to below 68.9%, then 48.9%, then 28.9%.  At that point one should just start paying cards down to $0 in order to achieve less accounts with balances, as no penalty will come from highest individual card with a balance any longer at those percentages.

[Anonymous]

ah okay so basically if I have  everything down under 28.9 except that one card, I should put my money on that one card to get it down quickly and not worry so much about the others so long as they stay under the 28.9 threshold and once that single card is down, start paying them all to zero?

[Anonymous]

I feel that would be the best course of action, yes.