Credit Card Utilization Question

[Anonymous]

I have just gotten a a new Discover Card  with $7500 limit  14 mos 0%  on balance transfers...so I moved all other balances to that card.  Those transfer and a trip I charged for this fall got my Discover Card to 56% card utilization but my total utilization is about 27% because I have a zero balances on 5 of 7 revolving accounts.  The other account that has a balance is about 9% utilized.   

I am planing one getting new car by Aug. and was concerned about the effect of a card above 50%.  The monthly payments on the Discover card would have it down to 49% utilized. in 4 months  Should I pay it down to below 50% before it ever even post that high and never shows a 50%+ usage or I'm a good with just paying it out over the 4 months and getting to 45% and my total utilization to 24% by the time I need to apply for a car loan. 

hope this makes sense

Thanks for your advice in advance.

[Anonymous]

I don't think this is as big of a deal when considering a car loan verses a mortgage.  If it's possible to get your aggregate utilization down to 9% (or less) the month before you apply for the car loan that would be ideal, then of course secondary to that would be getting the utilization on that individual (Disc) card down past certain thresholds.  Below 30% would likely mean no scoring penalty at all, but some have reported below 50% being able to accomplish this.  If that single card is over 50% still, as long as your aggregate utilization is still single-digit you'd only be losing a few points compared to if that high utilization line were paid down significantly.  Now, if you aggregate utilization is over 9%, you would take an additional hit that's likely bigger and that's just not the best look when applying for the auto loan.  The other important factor is where your credit scores currently sit.  If you're in the 700's+ already, none of this likely matters as you'll likely qualify for the best rates anyway.  If your scores are in the 600's you're going to want to position yourself as good as possible over the upcoming months leading up to the auto loan application.

[fliphusker]

http://ficoforums.myfico.com/t5/General-Credit-Topics/Personal-loan-and-utilization-question/m-p/464...

I went through the same thing you did, more or less but got a HELOC instead.  From what others said that there are points that will change your FICO score.  I saw this for myself when I started paying off my silly balance transfer. 

From what others said that total and individual card utilisation has steps at 90, 60, 30 and 10.   The longer you can wait before getting a new car the better.  Getting the single card utilisation under 30% or even 10% will save you big $$$ in the long run.  As well as getting your total under 10%. 

[Anonymous]

I've decided to wait on the new car and get my utilization to below 10 percent.  Also by then the 2018 models will be out.  I am really excited about my trip to Hawaii this fall and I'll have it all paid for by the time I go.  

[Anonymous]

Smart move getting that utilization to < 10% first!