Credit took a hit though utilization under 30%

[Anonymous]

In January my credit card showed no balance so I had a 0% utilization.  For February I posted a balance that took my utilization to 29%. I took a couple points hit on my credit report as a result. Why was I dinged when, though I reported a balance for the second month, I still was under the "magic" 30% utilization?  Seems like once you go to a certain level of utilization, if you exceed that, even if it's under the 30% threshhold, it's still looked down on.  So I guess my Fico is trying to tell me that if I go to a certain level of utilization, I have to maintain that utilization percent or I'll lose points.  Any thoughts?  Thanks.  

[Anonymous]

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@Anonymous wrote:

In January my credit card showed no balance so I had a 0% utilization.  For February I posted a balance that took my utilization to 29%. I took a couple points hit on my credit report as a result. Why was I dinged when, though I reported a balance for the second month, I still was under the "magic" 30% utilization?  Seems like once you go to a certain level of utilization, if you exceed that, even if it's under the 30% threshhold, it's still looked down on.  So I guess my Fico is trying to tell me that if I go to a certain level of utilization, I have to maintain that utilization percent or I'll lose points.  Any thoughts?  Thanks.  

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My guess is that it was the sudden change. It will catch up eventually. 

[Anonymous]

My most recent update -  Your CC balance down $558, Util is now 7% (down from 9%)  - you lose 2 points.  I think there is a Cards against Credit Score Watchers going on in the Fico algorithms. 

[Anonymous]

Thanks. Let's hope so.

[Anonymous]

Ugh, that's depressing. I find absolutely no rhyme nor rhythm to Fico scoring, after watching my own scores for a few months and reading through these boards. Back in August, I had a card go from a $45 balance to zero.  The next month all three credit bureaus rewarded me 34-45 points.  Previously, when a card went to a zero balance, I was rewarded with a couple points.  Sometimes 5. I have no idea what was different in August to get such a huge point jump when normally the jump would be nominal, all things being equal. I even called the credit bureaus to ask what did I do above dropping my balance that resulted in such a huge jump in score. They had no clue. I haven't been able to replicate that seminal moment.  Wish I could. Can't remember how I was holding my mouth back in august. Sigh

[Anonymous]

The "magic" threshold is not 30% but 9% (for total utilization) -- if by "magic" one means the point after which FICO begin starts imposing a scoring penalty.  So to get all the points you can from that factor, you want to keep your total U under 8.99%.

But of course because there are so many factors, and because all of these factors are frequently changing on one's report, a total U of 9% is not magic, if one means that by bringing your util to under 9% it will eliminate all possibility of score fluctuations.

Fortunately how CC balances work is well tested.  To maximize your score on any particular month, you need a total U < 8.99% and most (but not all) of your cards showing a $0 balance.  And as a practical matter you can ignore even that most months -- you can just wait till you need your score to be at its best and then get your CC balances into shape 40 days before that.

[Thomas_Thumb]

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@Anonymous wrote:

In January my credit card showed no balance so I had a 0% utilization.  For February I posted a balance that took my utilization to 29%. I took a couple points hit on my credit report as a result. Why was I dinged when, though I reported a balance for the second month, I still was under the "magic" 30% utilization?  Seems like once you go to a certain level of utilization, if you exceed that, even if it's under the 30% threshhold, it's still looked down on.  So I guess my Fico is trying to tell me that if I go to a certain level of utilization, I have to maintain that utilization percent or I'll lose points.  Any thoughts?  Thanks.  

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For best results:

1. Aggregate utilization (all cards combined) under 9%

2. Individual card utilization(s) under 29% while maintaining #1.

3. Greater than 0% of cards reporting a balance but not more than 50% (unless you only have one card -then have it report a balance of at least $3). If you are highly structured and need every point then reporting a balance on only one card will deliver optimal results. 

Key point as mentioned by CGID above: Under 9% aggregate utilization required for optimal results. The under 29% applies to individual cards. That is a good guideline regardless of profile.