cancel
Showing results for 
Search instead for 
Did you mean: 

Is 1% util better than 3% on a credit report?

tag
MikeyMagic
Frequent Contributor

Is 1% util better than 3% on a credit report?

Hello

 

Just was trying to understand something, the rule of thumb was keeping your total credit utilization under 30%. But most say under 10% is what the goal should be to maximize the credit score.

 

Right now I just paid of my PayPal Credit account in full so my utilization overall on my credit reports is 1%. To me that seems too low. Should I try and get it to 3% or 4%? Or is there really no difference between 1% showing and 4% or even 5%?

 

I'm confused. Thanks so much.

Message 1 of 15
14 REPLIES 14
Horseshoez
Senior Contributor

Re: Is 1% util better than 3% on a credit report?

There have been any number of anecdotal reports which say anything under 3% is the best from a scoring perspective.  I've only been above 3% a few times in the last four years and each time I was, my scores took a hit (the higher above 3% the bigger the hit).

Chapter 13:

  • Burned: AMEX, Chase, Citi, Wells Fargo, and South County Bank (now Bank of Southern California)
  • Filed: 26-Feb-2015
  • MoC: 01-Mar-2015
  • 1st Payment (posted): 23-Mar-2015
  • Last Payment (posted): 07-Feb-2020
  • Discharged: 04-Mar-2020
  • Closed: 23-Jun-2020

 

I categorically refuse to do AZEO!

In the proverbial sock drawer:
Message 2 of 15
JoeRockhead
Senior Contributor

Re: Is 1% util better than 3% on a credit report?

If you're confused now... just you wait, there are better head scratchers ahead, like when you accidentally let more than an "acceptable" balance report on one of your cards and you actually gain some points... IKR Smiley Very Happy

 

From where you are in your history, all you need to worry about is doing as you've been doing. Use your credit responsibly, keep your UTI low (UTI anywhere under 4.9% is optimal. Good job BTW) and watch the calender, every month your scores should tick up, every six months you might see bigger improvements as at certain thresholds you may be bumped up to a better score card etc.. then there's CLIs, new, bigger better cards and limits...  and all that fun stuff.

Message 3 of 15
MikeyMagic
Frequent Contributor

Re: Is 1% util better than 3% on a credit report?


@JoeRockhead wrote:

If you're confused now... just you wait, there are better head scratchers ahead, like when you accidentally let more than an "acceptable" balance report on one of your cards and you actually gain some points... IKR Smiley Very Happy

 

From where you are in your history, all you need to worry about is doing as you've been doing. Use your credit responsibly, keep your UTI low (UTI anywhere under 4.9% is optimal. Good job BTW) and watch the calender, every month your scores should tick up, every six months you might see bigger improvements as at certain thresholds you may be bumped up to a better score card etc.. then there's CLIs, new, bigger better cards and limits...  and all that fun stuff.


Thx so much! Yeah it's crazy when my PayPal Credit balance reported $862 to the credit bureaus out of a $1200 CL my TransUnion Vantage 3.0 score was 610. Then the statement cut and I had nearly maxed it out so $1197 got reported to the credit bureaus and my score went up!!! To 623 even though my overall credit utilization was 35%!

 

Then I paid it in full and asked for an off-cycle report and now it shows a $0 balance to the credit bureaus. My total credit utilization is 1% from all my cards and PPC and my TransUnion Vantage 3.0 score went up to 647. 

 

I am only 4 months into my credit journey but 647 still seems low. I still don't qualify for a FICO score yet. That's why I was wondering if I should raise my overall utilization to 3% or even 4%.

Message 4 of 15
MikeyMagic
Frequent Contributor

Re: Is 1% util better than 3% on a credit report?


@Horseshoez wrote:

There have been any number of anecdotal reports which say anything under 3% is the best from a scoring perspective.  I've only been above 3% a few times in the last four years and each time I was, my scores took a hit (the higher above 3% the bigger the hit).


Hmmm wow this is good to know. 

Message 5 of 15
SouthJamaica
Mega Contributor

Re: Is 1% util better than 3% on a credit report?

In my opinion there's no difference between 1% and 3%.


Total revolving limits 657200 (536700 reporting) FICO 8: EQ 712 TU 710 EX 708

Message 6 of 15
Thomas_Thumb
Senior Contributor

Re: Is 1% util better than 3% on a credit report?


@MikeyMagic wrote:

Hello

 

Just was trying to understand something, the rule of thumb was keeping your total credit utilization under 30%. But most say under 10% is what the goal should be to maximize the credit score.

 

Right now I just paid of my PayPal Credit account in full so my utilization overall on my credit reports is 1%. To me that seems too low. Should I try and get it to 3% or 4%? Or is there really no difference between 1% showing and 4% or even 5%?

 

I'm confused. Thanks so much.


No difference in Fico score between 1% and 5% aggregate utilization in my experience. Some report seeing score drop when AG UT rises above 5%. I don' t see a drop until 9% AG UT is exceeded.

 

As long as UT is above 0, Fico is happy. However, my experience is VS3 was optimized when AG UT was in the 3% to 4.5% range. That seems strange but, it is what I observed ... And also saw using the VS simulator on my profile.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 7 of 15
Zoostation1
Valued Contributor

Re: Is 1% util better than 3% on a credit report?

I'm on a dirty profile, so that may impact how utilization effects my score,  but don't see any difference if I'm below 9% aggregate and below 29% individual for FICO 8 and not more than 2/5 cards reporting.  For FICO 9 I can squeeze out another point or two with a lower aggregate, but unsure if AZEO gains me anything.  For VS 3.0 I found it odd that when I briefly hit all zero over on two occasions this past summer I gained a point over being AZEO (I hadn't stopped doing AZEO yet at the time).

Rebuild Started Nov 2021
June 2022 FICO 8:
June 2022 FICO 9:
May 2024 FICO 8:
May 2024 FICO 9:
Message 8 of 15
MikeyMagic
Frequent Contributor

Re: Is 1% util better than 3% on a credit report?

Thanks to all that have answered. I've decided I'm gonna keep my utilization at 3%, use AZEO and try that. Maybe one month it will be 2% or another month it will be 4% but I definitely want to keep it at 5% or lower.

Message 9 of 15
markbeiser
Established Contributor

Re: Is 1% util better than 3% on a credit report?

I just went from a $135 balance to $8 on my one card that I let report a balance, both amounts are less than 0.002% of my total credit limit, and less than 0.004% of the limit on that card.
My EQ VS3 went up 1 point, no change to TU or EX VS, or any FICO scores.
This spring and summer I'll be playing around with how much and how many cards I let report a balance to see what happens.

Experian keeps telling me my score "could go up as many as 20 points" if I add a new card with a $2500 limit...🤣

Back to gardening until Late February 2025.
Current FICO8:
Message 10 of 15
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.