High uti

[Anonymous]

Hi,

I received a credit limit of 10K from Navy Federal.  I've used 5K and that balance will report this month.  How much do you think that 50% uti will drop my credit score?  How many points?  I'm wondering if I should try to pay a huge amount before the closing date.  

[Revelate]

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@Anonymous wrote:

Hi,

I received a credit limit of 10K from Navy Federal.  I've used 5K and that balance will report this month.  How much do you think that 50% uti will drop my credit score?  How many points?  I'm wondering if I should try to pay a huge amount before the closing date.  

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Not much if any depending on scorecard at least for FICO models and assuming your aggregate utilization isn't thrown way out of whack.

Utilization is instant in time anyway, unless you have an application coming up don't sweat it... and I'm firmly in the camp of showing a high balance for every other lender to see that I do use my cards, and therefore may be a profitable customer for them if they choose to extend me credit as well.

I'd let it report then pay the chunk down.

[Thomas_Thumb]

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@Anonymous wrote:

Hi,

I received a credit limit of 10K from Navy Federal.  I've used 5K and that balance will report this month.  How much do you think that 50% uti will drop my credit score?  How many points?  I'm wondering if I should try to pay a huge amount before the closing date.  

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Is this your only card? If so, your score will drop significantly - possibly 40 or more points because your aggregate utilization has crossed above three thresholds: 9%, 29% and 49% thresholds. However, if your total aggregate CLs are $56k or more and this is your only card with a balance, then score drop will be minimal - say under 10 points.

Either way, I agree with Revelate - let the balance report and then check score. Then paydown the card and check score again. It is always good to gain insight on how your particular file reacts for future reference. After all, yesterday's utilization has no impact on tomorrow's credit score; it's only tomorrow's utilization that will matter.

[Anonymous]

Thank you so much!