Overall Utilization vs. Individual Utilization

[bfranklin825]

Currently my utilization is over the supposed magical number of 30% and I have a chance to get it below that in the recent future. My question is: is it better (for your FICO score) if your overall utilization is under 30% or if each card is under 30%? 

I can pay down each card to be under 30% but then I wouldn't be able to pay off as many cards... or I could pay off as many cards as I can and then overall utilization would be under 30%, but it would leave a number of cards above that 30% level.

Which is better for FICO score? 

[Anonymous]

It depends on which scores you are trying to improve the most. If you are trying to improve FICO 8s (used for most installment loan and credit card approvals) then you will benefit more from paying each card to under 30% utilization. If you are trying to maximize your mortgage scores the most then paying off more cards will get you the greater score improvement.

If you aren't apping for anything soon and just trying to generally improve credit, then I would fully pay off whatever cards have the highest interest rate first and work my way down to the card with the lowest interest.

[SouthJamaica]

---

@bfranklin825 wrote:

Currently my utilization is over the supposed magical number of 30% and I have a chance to get it below that in the recent future. My question is: is it better (for your FICO score) if your overall utilization is under 30% or if each card is under 30%? 

I can pay down each card to be under 30% but then I wouldn't be able to pay off as many cards... or I could pay off as many cards as I can and then overall utilization would be under 30%, but it would leave a number of cards above that 30% level.

Which is better for FICO score? 

---

They're two different metrics.

It's best for each individual card to be under 30%.

And it's best for overall utilization to be under 30%.

If no individual account is reporting > 30%, then your overall utilization will also be < 30%, so go for that.

If, however, your concern is your mortage scores, my advice would be to 'snowball' ... i.e., pay as many accounts down to zero as possible, which would of course mean tackling the smaller balances first.

[babygirl1256]

@bfranklin825 Are you trying to accomplish a specific goal (i.e. mortgage purchase, etc.)? When I tackled my utilization, I paid each card to be under 30% first -and- then I paid off cards with the smallest balance first. Now, I keep each card below 5.5% utilization!!! I keep my budget on an Excel spreadsheet that automatically updates.

[Anonymous]

@Anonymous wrote:

It depends on which scores you are trying to improve the most. If you are trying to improve FICO 8s (used for most installment loan and credit card approvals) then you will benefit more from paying each card to under 30% utilization. If you are trying to maximize your mortgage scores the most then paying off more cards will get you the greater score improvement.

If you aren't apping for anything soon and just trying to generally improve credit, then I would fully pay off whatever cards have the highest interest rate first and work my way down to the card with the lowest interest.

^^^ well said. 

---

@bfranklin825 wrote:

Currently my utilization is over the supposed magical number of 30% and I have a chance to get it below that in the recent future. My question is: is it better (for your FICO score) if your overall utilization is under 30% or if each card is under 30%? 

I can pay down each card to be under 30% but then I wouldn't be able to pay off as many cards... or I could pay off as many cards as I can and then overall utilization would be under 30%, but it would leave a number of cards above that 30% level.

Which is better for FICO score? 

@bfranklin825 you see the mortgage Scores heavily weigh AWB whereas 8/9 for the most part could care less about that metric. 

if each card is under 30%, then your overall is going to be under 30%! But actually, your overall should be <10% and each individual card should be <30%. 

[Shooting-For-800]

 I would pay the highest util card down to 28% then the next highest, etc.

[REDBOYYY56]

I too agree with the last poster. That's what I did when I was working on my scores. I got all accounts under 28% then the next highest ect.

[financialfreedom777]

---

@babygirl1256 wrote:

@bfranklin825 Are you trying to accomplish a specific goal (i.e. mortgage purchase, etc.)? When I tackled my utilization, I paid each card to be under 30% first -and- then I paid off cards with the smallest balance first. Now, I keep each card below 5.5% utilization!!! I keep my budget on an Excel spreadsheet that automatically updates.

---

OMG I love this little chart. Trying to get my budget down, was using old school pen and paper and dabbling with YNAB. I'm using this snippet you used, its a great monitoring tool! Thanks for sharing the screenshot. :-)