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Confused about utilization and its impact on your FICO

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Anonymous
Not applicable

Confused about utilization and its impact on your FICO

I have been reading alot and I think I am more confused now than when i started. I am currently waiting to build my history with 2 of the 3 cards below with the exception of my Cap1 secured that turns one year next month.

 

I use all three monthly and pay it off in full by the due date so it reports 0% uti at statement delivery however I am confused if that is causing more harm than good for my end goal which is to raise my scores (sub 600 across the board) and maybe a nice CLI on my QS1. What I mean is I have read that carrying some balance 10% (total cards) or less is better way to bump score.

 

I take what the internet says with a grain of salt but as a noob trying to repair my past this is confusing. Can anyone chime in? Thanks in advance.

 

 

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taxi818
Super Contributor

Re: Confused about utilization and its impact on your FICO


@Anonymous wrote:

I have been reading alot and I think I am more confused now than when i started. I am currently waiting to build my history with 2 of the 3 cards below with the exception of my Cap1 secured that turns one year next month.

 

I use all three monthly and pay it off in full by the due date so it reports 0% uti at statement delivery however I am confused if that is causing more harm than good for my end goal which is to raise my scores (sub 600 across the board) and maybe a nice CLI on my QS1. What I mean is I have read that carrying some balance 10% (total cards) or less is better way to bump score.

 

I take what the internet says with a grain of salt but as a noob trying to repair my past this is confusing. Can anyone chime in? Thanks in advance.

 

 


ok. I will make this as simple as possible.

yes. utilization is 2nd only to payment history. which alone is 35 percent of your score.

Utilization is 30 percent of your score.

now you know how important it is.

now as far as the 10 percent thing goes. every one is different. i will give you examples so you know.

true. best to keep at least 1 card between 1 and 10 percent. but that is only if you are about to apply for something and you need every single point.

other wise. dont waste your time. just your normal use will do.

if you want to know how that affects your score. here we go.

each catagory has a specific percentage of points for credit score. any ones.

no matter who you are.

payments. 35 percent.

utilization 30 percent.

lenth of credit history 15 percent.

account mix. 10 percent.

new credit. 10 percent.

nothing we can do about time. but as far as util. simple \

you can pay all off by due like like you are doing.

but on 1  of them. leave a couple dollars. example . you owe 50 on card. number 3.

pay 40 of it. more than your minimum but leaving a 10 dollar balance.

when the statement date arrives.

keep in mind. that is the day they will report to bureaus. the next day just pay tthat amount too.

even at 10 dollars. fico will round this up to 1 percent.

then you will maximize your score each month.

no  matter what. don't take a single card of 30 percent.

and strive to keep under. 10.percent. but it is not in stone for the 10 percent. unless you are applying for something period. the purpose of credit cards is to determine how you pay your bills. month to month. paying in full does that. but when you got low limits its easier to do. when you got say 50 k. then thats a different story. and fico reconizes this.

good luck. hope you understand now.

no need to stress. just always pay more than the minimum due. and you will be ok. and if you can avoid paying interest.

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