Should I take card to 0% UTI

[Jazee]

I've got a card at 5% UTI. The balance is 1% of total UTI. I assume taking it to 0% for the first time in 6 months would result in maybe a small score improvement. But what if leaving it at 5% would free up money to take another card from 50% to 48% or another card from 70% to 68%?

[JoeRockhead]

You'll see better score improvements by getting the 70% and 50% usage cards below those thresholds.

[FicoMike0]

What @JoeRockhead said.

My understanding is that there are two revolving utilization metrics, aggregate utilization and worst individual utilization. If you have ten accounts at 1% util. And one at 50%, the last is the only one that counts.

[Jazee]

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@FicoMike0 wrote:

What @JoeRockhead said.

My understanding is that there are two revolving utilization metrics, aggregate utilization and worst individual utilization. If you have ten accounts at 1% util. And one at 50%, the last is the only one that counts.

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I doubt that is true as then the score would be very misrepresentative if you had 4 cards with $1K limit, $5K, $15, and $30K ($51K total) and you had 90% UTI on your $1K card. LOL. I believe both factor in so it's sort of a "blend" but I, like many of us here don't have insider information.  My impression in reading through these forums past few years was the total UTI had a more weight (not sure how much) than the highest individual card UTI.  Maybe someone more knowledgeable here can correct us both.

[JoeRockhead]

I don't believe there's any score benefits or thresholds going from 5% to zero. Aggregate utilization is weighed heaviest, but there are individual thresholds at 50%. You'll  get better results by getting below those.

Depending on the size of the balances, it could also have a greater reduction on your aggregate.

[FicoMike0]

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I agree that agg. Uti is more important. I think that blowing 90% uti on your lowest limit card is quite representative of poor util. management. Anyway, when has scoring made any sense?

[Thomas_Thumb]

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@Jazee wrote:

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@FicoMike0 wrote:

What @JoeRockhead said.

My understanding is that there are two revolving utilization metrics, aggregate utilization and worst individual utilization. If you have ten accounts at 1% util. And one at 50%, the last is the only one that counts.

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I doubt that is true as then the score would be very misrepresentative if you had 4 cards with $1K limit, $5K, $15, and $30K ($51K total) and you had 90% UTI on your $1K card. LOL. I believe both factor in so it's sort of a "blend" but I, like many of us here don't have insider information.  My impression in reading through these forums past few years was the total UTI had a more weight (not sure how much) than the highest individual card UTI.  Maybe someone more knowledgeable here can correct us both.

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@FicoMike0  is correct.

1. The Fico algorithms score individual card utilization based on highest utilization independent of aggregate utilization. A $500 CL card at 90% UT hurts score more than a $40k CL card at 25% UT.

2. The Fico algorithms score aggregate revolving utilization as a stand alone metric.

Obviously, a $10k balance on a $40k CL card has a greater influence on aggregate UT. However, that is a seperate scoring metric that is best kept below 9%.

3. Number of accounts and % of cards with balances is a scoring factor as well. However, impact on score is small on Fico 8 and later models.

Focus on bring down aggregate utilization and getting highest utilization on any card below 49% and then below 29%.

[SouthJamaica]

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@Jazee wrote:

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@FicoMike0 wrote:

What @JoeRockhead said.

My understanding is that there are two revolving utilization metrics, aggregate utilization and worst individual utilization. If you have ten accounts at 1% util. And one at 50%, the last is the only one that counts.

---

I doubt that is true as then the score would be very misrepresentative if you had 4 cards with $1K limit, $5K, $15, and $30K ($51K total) and you had 90% UTI on your $1K card. LOL. I believe both factor in so it's sort of a "blend" but I, like many of us here don't have insider information.  My impression in reading through these forums past few years was the total UTI had a more weight (not sure how much) than the highest individual card UTI.  Maybe someone more knowledgeable here can correct us both.

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Both individual and aggregate utilization have a great deal of weight. I don't believe it's possible to make a rule as to which is more weighty, because there is no single fact pattern for individual card utilization. E.g., there could be one 99% card and 34 zero % cards, or there could be 28 accounts with 30%+ utilization.

One member who is more knowledgeable than I is of the view that only the highest utilized card counts for individual utilization, and that the lesser utilized cards are no longer factored into that metric. I.e., if one card is at 55%. and there is another at 35%. only the 55% one counts for scoring. My testing has proved to my satisfaction that this theory is not accurate, and that the number of highly utilized cards is also a factor. E.g. three 50%+ cards hurt one's score more than one 50%+ card.

As to what to aim for, I would aim for (a) a majority of revolvers reporting at zero %; (b) no individual account reporting at more than 28%; and (c) aggregate utilization of 6% or less.

[Thomas_Thumb]

Fico states in a written Q&A response that their models score card with highest utilization. The statement is explicit on this being a factor.

I've tested that factor many times and can say that highest card utilization affects score as an independent variable seperate from aggregate utilization. Check out Fico reason codes.

Fico also considerd overall revolving balance in $ terms but, utilization is king.

Someone with 2 or 3 small CL cards along with a large aggregate CL could do their own study. The person would need to accept some short term score hits and have access to a score monitoring plan.

Here is an example of how to test. First, the tester should have and maintain a low aggregate utilization. That will allow isolation of score effects to high card utilization. Next the profile should have a few low limit cards but a fairly high aggregate CL.

Let's assume the tester had $200k in total CL and also has 2 or 3 low level,$1k - $2k CL, cards in the mix. In this test one criteria is to hold aggregate CL in the 0.5% - 3% range.

Start test by having all cards report $0 statement balances except 2 or 3 small  CL cards. Let's assume a 3 card test with cards having $1k, $1k and $2k CL. Allow a $1k card report a $700 statement balance and the other $1k card report $900. Then have the $2k card report $1200. So, starting card utilizations are: 70%, 90% and 60% with aggregate utilization at 1.4%

Now pay the 70% card down to 20%. Highest card is still at 90% so I'd anticipate no score increase. Now drop the 90% card to 60%. Score should increase. Next drop the $2k card utilization from 60% to 40%. Expect no score change since highest card is still at 60%. Now drop the 60% card to 20%. Score may rise since highest card is now 40%. Then drop $2k card to 20% UT. Score may rise again. However many profiles, mine included, don't see card utilizations impacting score at levels under 49% if aggregate utilization is low enough.

Side Note: some commonly accepted thresholds for card utilizations are: 89%, 49% and 29%. Possibly one at 69%.

For my profile, aggregate utilization hurts score once it rises above 9%. Others (typically young/thin files) have reported a Fico score drops with AG UT as low as a 5% level.

[SouthJamaica]

Here's the thread where you and I debated this in the past, neither convincing the other:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/of-accounts-with-gt-50-balance/m-p/61554...