FICO - Utlization

[sto0pyd]

I have ~450,000 in available credit with an overall utilization of 1%. I got an offer on a Comenity issued card for a balance transfer at 0% for 18 months. The limit on this card is $12,000. I need to purchase new appliances which will cost me ~$6,000. I was thinking of using my Best Buy card to maximize the 5% return; I can also use the US Bank-Cash+ card and select the "electronics" category so I can get the same return but would include an extended warranty as a card benefit.  To give me time to pay the balance off (since it really won't cost me extra) I was thinking of using the preferred card and transferring the balance over to the Comenity card. If I did this, my utilization on the Comenity card would be at 50%. My question is this, would this strategy adversely impact my FICO since utilization on the Comenity card would be at 50%? Keep in mind that my overall utilization would be around 2%.

Thank you in advance for giving me input on this. I tried searching the forum and couldn't find an answer.

[Anonymous]

Yes it would impact you.  If you aren't planning on applying for anything then it doesn't really matter if you drop some points temporarily.

[Thomas_Thumb]

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@sto0pyd wrote:

I have ~450,000 in available credit with an overall utilization of 1%. I got an offer on a Comenity issued card for a balance transfer at 0% for 18 months. The limit on this card is $12,000. I need to purchase new appliances which will cost me ~$6,000. I was thinking of using my Best Buy card to maximize the 5% return; I can also use the US Bank-Cash+ card and select the "electronics" category so I can get the same return but would include an extended warranty as a card benefit.  To give me time to pay the balance off (since it really won't cost me extra) I was thinking of using the preferred card and transferring the balance over to the Comenity card. If I did this, my utilization on the Comenity card would be at 50%. My question is this, would this strategy adversely impact my FICO since utilization on the Comenity card would be at 50%? Keep in mind that my overall utilization would be around 2%.

Thank you in advance for giving me input on this. I tried searching the forum and couldn't find an answer.

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I got a notification from Best Buy three weeks ago with a one time use coupon for 10% back in rewards - good until end of August. Unfortunately, I purchased a full set of kitchen appliances back in March.

Do you have such a coupon (see below)? If so, use your Best Buy card.

[Anonymous]

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@sto0pydIf I did this, my utilization on the Comenity card would be at 50%. My question is this, would this strategy adversely impact my FICO since utilization on the Comenity card would be at 50%? Keep in mind that my overall utilization would be around 2%.

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The aggregate utilization change would not impact your scores at all.  The only factor to consider here is your highest individual utilization card both before and after.  Your "after" will be 50%... what is your current highest utilization card?  I'm assuming it's less than 50%, but the answer to that impacts the answer I'll give you. 

If your current highest utilization card is already at 50% or greater, taking this other card to 50% won't impact your scores at all, as FICO scoring looks at just your highest individual utilization card.  Keep in mind that dollars here are irrelevant.  Perhaps you're at a $250 balance on a $500 limit card already.  That account would be penalized for the came 50% individual utilization that you'd see if it was a $6000 balance on a $12k limit.  Let's say now that your highest individual utilization card was at 25%.  If this is the case, going from 25% to 50% on your highest individual utilization on any card will result in a scoring penalty.  The penalty however may not be all too significant, perhaps no more than 10 points.

I'm not sure what your profile looks like, but on my thick/aged/clean file, going from AZEO with my AZEO card being at 24% to my AZEO card being at 59% resulted in score drops of EX -8, TU -9 and EQ -6.  My aggregate utilization in this example went from 2% to 4% I believe, so as in your case it was a non-factor.