Overall vs Individual Credit Utilization

[Bsong]

Hi Everyone,

I was hoping to get Myfico members to help me decide on what to do regarding my utilization. 

My current overall utilization is @ 10% ($6k on $60,000 combined credit limit)

I am only using 1 card and that entire $6k is on a $15k credit limit card which puts me at 40% utilization. I attempted to request for a CLI on this account but was told that I am at the max credit limit that they are willing to extend at this time.

I have another card with the same bank which has another $15k limit. I was offered to combined the two limits onto 1 card which would give me a total credit limit of $30k and would bring down my utilization on 1 card to 20%. 

I didnt accept since I was thinking that having 2 cards with a limit of $15k each is better for my credit profile than having 1 card with a $30k limit. However, im now reconsidering the offer because I received an alert notifying me that my score has dropped 10 points due to increased utilization on my 1 card. I also considered having 1 card with a $5k limit and and another card with $25k limit which would make my utilization on one card 24%. 

What would you guys do?

Would you keep the cards seperate or combine the limits onto 1 card? 

I also though that aslong as my overall utilization stayed below 10% I would be golden?

Now I am realizing that is not that true? Overall and Individual utilization seems to be having an effect on my credit score. 

Any help or suggestions would be appreciated! Thank You All in advance! 

[Zingy]

As I understand, keeping Util low is important for all accounts. You might consider balance transfers. If you have to hold balances that big, combine your cl's. What service reported your score drop due to Util?

[lhcole77]

Great post and great question.

I would ask myself what my long term goal(s) is/are. If you need to boost your score immediately then combining can do that. However, if you are not planning on applying for anything in the near future and are planning to steadily pay that off then no need to combine.

I imagine with $15K CL you prob have good scores. A 10 pt drop is nothing to worry about UNLESS you are app'ing soon and/or are borderline on scores (good vs fair, excellent vs good, etc)

[Bsong]

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@Zingy wrote:
As I understand, keeping Util low is important for all accounts. You might consider balance transfers. If you have to hold balances that big, combine your cl's. What service reported your score drop due to Util?

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Hi Zingy, 

Thanks for your response. Im really considering just combining my limits. The alert I received was from Score Watch (EQ). 

[Bsong]

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@lhcole77 wrote:

Great post and great question.

I would ask myself what my long term goal(s) is/are. If you need to boost your score immediately then combining can do that. However, if you are not planning on applying for anything in the near future and are planning to steadily pay that off then no need to combine.

I imagine with $15K CL you prob have good scores. A 10 pt drop is nothing to worry about UNLESS you are app'ing soon and/or are borderline on scores (good vs fair, excellent vs good, etc)

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Hi lhcole77, Thanks for your response as well... 

At this time, I was planning on keeping a balance on that card to take advantage of the 0.00% intro rate but will be making large payments every month till paid off. My scores across all 3 is 680 but income is over $100k which is the only reason why I believe my bank gave such limits. Plus I've been banking with the same bank for over 10 years.  

This is my overall goal: To have 700 scores by New Years and also apply for a card with Chase or Discover. I wanted to keep the limits seperate in hopes that other banks would offer the same if not higher limits if ever I apply. Im worried that if I combined the limits, the bank that Im applying for wouldnt even considering trying to match a $30k line but would consider matching a $15k line. 

[lhcole77]

Hmmm, I don't yet have experience with CL that high (my highest is $9,500) but I have wondered before if $25K or $30K CL make other creditors think about how much they are willing to extend. I guess that comes down to income and score.

[lg8302ch]

I am a bit confused as on my profile it does not have the slightest impact if I report a 70% util on my Discover or a 70% util on my Freedom compared to 3% on Amex. Scores remain the same as long as number of accounts with balances is the same and overal util is less than 9%. Tested this to see what impact a single account would have and to my surprise it was none. Now wish I had done my test with 90% util on Discover just to see if a maxed out card still had no impact..I might repeat my test in the near future.

[vanillabean]

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@BBsong wrote:

@Anonymous current overall utilization is @ 10%

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My scores across all 3 is 680

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Something bigger than your util is impacting your scores. Any late stuff? Short credit history?

[blondy250]

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@lhcole77 wrote:

Great post and great question.

I would ask myself what my long term goal(s) is/are. If you need to boost your score immediately then combining can do that. However, if you are not planning on applying for anything in the near future and are planning to steadily pay that off then no need to combine.

I imagine with $15K CL you prob have good scores. A 10 pt drop is nothing to worry about UNLESS you are app'ing soon and/or are borderline on scores (good vs fair, excellent vs good, etc)

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This is spot on, I also agree there is something else is affecting your credit score.