Individual credit line utilization vs. total credit utilization

[haulingthescoreup]

It's having ALL balances at $0 that will drop your score.

Many people new to this game think that they have to have 9% or less of their CL's post on every single card. You can go nuts trying to do this, and it hurts your score to have every CC with a balance. (Don't worry about loans/ mortgages; they're calculated separately.)

If you have a lot of cards, you can have 2-3 post minimal balances. (Don't forget to then pay them off! ) If you only have a few, let one post a balance.

The above is for those trying to optimize scores. It's not necessary to do on a regular basis. But I do it anyway, because I like knowing that I have my scores and reports as shiny as possible.

[fused]

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@kal9988 wrote:

i've read that having a $0 balance is bad -- they want to seen that you're using your credit.

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Correct...for the most part. Check this thread out. Here's The Skinny On Zero Balances

[kal9988]

that post seems inconclusive

[fused]

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@kal9988 wrote:

that post seems inconclusive

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I suppose you're right, but I'm the first person to report a gain in FICO points with 0% util reporting. In the past, I have lost quite a few points with util reporting 0%, so have countless others.

[haulingthescoreup]

+1

Now that I'm in the 780's, I do gain points on TU for all accounts with $0. But I still lose points on EQ.

If your scores are more in the 760 or below range, you'll probably lose points on both for all revolving accounts reporting $0.

Too many people have reported this over the years for it to be really debatable any more, I think.

[Anonymous]

Given your current score is there any cap on the rate of improvement in your score? For instance my credit score is 720, I am beginning to report 1% util this month on my AMEX and 0 balances on my other two cards.

[haulingthescoreup]

Not sure what you mean by "cap on rate of improvement", but if you're talking about what's reasonable for me to expect in terms of further score increase, I have a new account that's 4 months old. I think something will happen at 6 months, although I don't know for sure. I wouldn't mind that one extra point on EQ!

In general, though, the higher the score, the slower the rate of increase, simply because there's not much left to do other than sit back and let time do its thing. For instance, I just got a nice jump for finally hitting 5 years AAoA, and that was worth the wait. I suppose that if someone normally had an 830 and had a sudden drop due to balances posting or something, that person could do a quick turn-around by paying them back off.

Otherwise, it's called credit gardening. I've done all the polishing up of my credit profile that I can do, and so all that's left is to keep an eye on weeds and bugs and hungry squirrels, aka things that could pull my score back down.

It's a weird hobby, but it's harmless enough, I guess!

[kal9988]

I had a CC that I paid off and didn't use for a month, so it reported a $0 balance. I used it once and last week, it reported a low balance ($75), and my EQ score went up 3 points. The previous credit alert was 3 days before, so it looks very likely that having a low balance as opposed to $0 helped me.