No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
Simple question... Does high utilization on one of my revolving card accounts (>70%) hurt my score if my overall utilization for all of my cards is low (<30%)? I can't seem to get a solid answer on this.
Great question. And it has a simple answer: "Yes."
Longer answer:
There are three different factors related to CC balances:
(1) Total or aggregate utilization (which counts all your credit limits together)
(2) Individual utilization (which counts each card with its own credit limit separately)
(3) Percentage of your open cards showing a positive balance
#1 matters the most. You begin getting a penalty as soon you go over 9.01%.
#2 matters less than #1, and the penalty starts at a much higher place. That may vary according to the scorecard you are in but a lot of people have tried raising their individual lines to 48-49% with no apparent penalty. Fo some profiles the penalty might not start until even higher. You mention > 70% and it is safe to say that would risk a significant penalty, with > 90% a much bigger penalty still.
#3 Also matters less than #1. I think people have tried figuring this one out too. Less than 50% is optimal? Less than 34%?. A simple rule is just to create as many $0 balances as you can (leaving one positive) if you have an important need for a great score (e.g. mortgage pre-approval, buying a car, etc.).
Bear in mind that even if you have a hit for one card reporting at a high level, the hit will vanish once you start getting that line down. Personally I have never seen reliable evidence that any (individual) penalty exists below 49%.
Hope that helps.
@Anonymous wrote:Simple question... Does high utilization on one of my revolving card accounts (>70%) hurt my score if my overall utilization for all of my cards is low (<30%)? I can't seem to get a solid answer on this.
Absolutely yes!
@Anonymous wrote:Simple question... Does high utilization on one of my revolving card accounts (>70%) hurt my score if my overall utilization for all of my cards is low (<30%)? I can't seem to get a solid answer on this.
Frequently posters have reported score drops when individual cards report above 70% even though aggregate utilization was maintained under 20%.
I typically advise maintaining aggregate utilization under 9% and individual card utilization under 30%. However, some people don't see a score drop on an individual card basis. even near 50% if aggregate UT is held below 9%.
Just from personal data, I ran a card up higher than 90% and I got a 7 point drop on EQ FICO 8, have to go look to see if I got a good Beacon 5.0 datapoint. I know that when I maxxed a tradeline and was above 10% but below 30% (13 and 27% respectively aggregate) I lost 14 points each time when I was at a 660 Beacon 5. Presumably a clean file would take a bigger penalty.
I didn't see a breakpoint at 70% but I never really tested it stringently... actually planning to do that once we get to October and Freedom no longer is 5X for restaurants and I get to play with the $200 CL on my itty bitty Discover secured.
Thanks for all your input everyone. Much appreciated.
@Revelate wrote:Just from personal data, I ran a card up higher than 90% and I got a 7 point drop on EQ FICO 8, have to go look to see if I got a good Beacon 5.0 datapoint. I know that when I maxxed a tradeline and was above 10% but below 30% (13 and 27% respectively aggregate) I lost 14 points each time when I was at a 660 Beacon 5. Presumably a clean file would take a bigger penalty.
I didn't see a breakpoint at 70% but I never really tested it stringently... actually planning to do that once we get to October and Freedom no longer is 5X for restaurants and I get to play with the $200 CL on my itty bitty Discover secured.
Revelate, if I recall correctly, you previously mentioning having some over 70% card UT without adverse affect. I suspect that may be true for quite a number of profiles
As mentioned in a couple older threads, I had a couple "high utilization" statement balance data points for a Best Buy credit card and saw no reduction in Fico 08 score. The specifics were:
1) Balance of $2101 on a $4000 CL card (52.5% card UT) with Ag UT under the recommended 9%
2) Balance of $0 - with Ag UT under 9%
3) Balance of $3011 on a $4000 CL card (75.3% card UT) with Ag UT under the recommended 9%
4) Balance of $0 - with Ag UT under 9%
Classic Fico 08 stayed the same (at 850) for all the above consecutive monthly pulls. (from Discover card)
However, I have a score buffer with Classic Fico 08 so what I experienced is not necessarily representative. Main point is enough posters have stated seeing score increases/decreases crossing 70% and 50% that they merit inclusion as a broad based generalization. I am not not sure there are single card threshold below 50% - unless you only have one card. Nonetheless, I advise staying under 30% because that is generally recognized as a threshold for "responsible credit management"..
Side note:The month my BB card reported a statement balnce of $3011, I reachd a mid cycle balance of $3202. It was/is this higher number that reports as high balance on my credit reports. At one time I thought HB had to be based off statement balances but, I proved myself wrong [at least for my BB card that is managed by CBNA]
@Thomas_Thumb wrote:
@Revelate wrote:Just from personal data, I ran a card up higher than 90% and I got a 7 point drop on EQ FICO 8, have to go look to see if I got a good Beacon 5.0 datapoint. I know that when I maxxed a tradeline and was above 10% but below 30% (13 and 27% respectively aggregate) I lost 14 points each time when I was at a 660 Beacon 5. Presumably a clean file would take a bigger penalty.
I didn't see a breakpoint at 70% but I never really tested it stringently... actually planning to do that once we get to October and Freedom no longer is 5X for restaurants and I get to play with the $200 CL on my itty bitty Discover secured.
Reverate, I recall you have previously mentioning having some over 70% card UT without adverse affect and I suspect that may be true for quite a number of profiles
As mentioned in a couple older threads, I had a couple "high utilization" statement balance data points for a Best Buy credit card and saw no reduction in Fico 08 score. The specifics were:
1) Balance of $2101 on a $4000 CL card (52.5% card UT) with Ag UT under the recommended 9%
2) Balance of $0 - with Ag UT under 9%
3) Balance of $3011 on a $4000 CL card (75.3% card UT) with Ag UT under the recommended 9%
4) Balance of $0 - with Ag UT under 9%
Classic Fico 08 stayed the same for all the above sconsecutive monthly pulls.(from Discover card)
However, I have a score buffer with Classic Fico 08 so what I experienced is not necessarily representative. Main point is enough posters have stated seeing score increases/decreases crossing 70% and 50% that they merit inclusion as a broad based generalization. I am not not sure there are single card threshold below 50% - unless you only have one card. Nonetheless, I advise staying under 30% because that is generally recognized as a threshold for "responsible credit management"..
Side note:The month my BB card reported a statement balnce of $3011, I reachd a mid cycle balance of $3202. It was/is this higher number that reports as high balance on my credit reports. At one time I thought HB had to be based off statement balances but, I proved myself wrong [at least for my BB card that is managed by CBNA]
Yeah, to be fair there are so many problems with getting good data on this forum. Most reports aren't anywhere close to as fixed as would be ideal, mine are somewhat better than average since I have a tax lien fixing my bucket to something relatively known and unchanging, I go long periods without applications, and when I do apply I cluster them which minimizes a lot of tradeline aging / inquiry aging type arguments.
I tend to think that the FICO calculations are identical inside buckets, but I could well be mistaken on that by making the error of thinking it too simple. I will try to explicitly nail some individual tradeline metrics on my report though my HELOC may well complicate that depending how it counts unfortunately... even with someone who has a relatively fixed file, and knows a non-trivial amount about the algorithm and how to at least to attempt to get clean data points, there's still a lot of variables in play which may not be well characterized making any rigorous analysis challenging. Statistically there's going to be variations in the quality of the data, doesn't take long looking at the reports here over the years to see that it's kind of a mess sometimes with what gets posted.
Can only work with what we have though, and if you're correct that it is different across profiles, all bets are off unless we have individuals changing profiles which is likely impossible or at least unfeasible in some cases.
Re: side note - I need to go look back but I had one lender do a midcycle high balance and another on statement balance. I don't really have many datapoints here because I tend to ALWAYS want a new high balance... if I spent it, might as well be proud and own it to show every other lending institution I may make the money I *think* most lenders do midcycle balance though from reports here but I could well be off on that assertion.
Very interesting to know that "high balance" reflected on your credit report for an account can in fact be your high balance and not just your highest statement balance. I did not know that.