So fico takes into individual util?

[Anonymous]

So fico takes into acct the individual util%?  I have two cards that will report some time next month, but not at the same time.  One of the cards has 108% utll that will go to 0% and the other is 136% that will go to 0%.  When they all have reported, I will have a total of 2% util, on all of my revolving accounts.  My question is would I get a score based on the individual cards reporting by themselves, if so what kind of point estimates would I be looking at for each card reporting individually?

I was not aware of this

[fused]

FICO has two types of revolving util calculations: individual util (each revolving account) and cumulative util (all revolving accounts). Do you have any other CCs?

[Anonymous]

I only have the four that I mentioned.  But, two that are over the limit have not reported yet, and I was not aware of the individual util%  Two of my credit cards have already reported one has reported a 0 bal and the other 7.00, but has taken my total util% from 111% to 63%, now I am waiting on the other two cards to report.  I guess my next question would be, if fico takes individual util% into consideration would scores reflect that or only total util%?

[RobertEG]

Fair Isaac discussed this topic in one of their public "webinars" a couple of years ago.

They addressed this issue by stating that approx half of your scoring on use of revloving credit is based on overall % util, and the other half is based on util (not just % util) of indiv cards.

Indiv card util is then divided down into two apparent sub-categories, one of which is a look at % util of each card, and the other of which is a scoring of the percent ot your total, open number cards that report any balance.  They, or course, did not go on to disclose the relative weight of indiv card % util against the no. of cards showing any reported balance, but clearly all three factors are incldued in some fashion.

So having, for example,  five cards that each show a 40% util, and thus an overall % util of 40%, is not the same as one at 90% or above, and the others offetting this in your overall % util calcu8lation.

So, the stated ultimate goal in obtaining highest marks in revolving utilization is to have all cards, and thus inherently, overall % util, below 10% for each card, and to additionally have no more than half of your cards reporting a monthly balance.   

In this whole discussion lies the hidden peril of low CL cards.  It is extremely easy, in any given month, to drive a low CL card to very high % utils on that one card.

Overall % util impact is the same, if CL is the same, no matter where you charge your debt.  But low CL cards require special attention if you are seeking to maximize your FICO score.  FICO does NOT score CLs.  They score % utils. 

A 600 balance on a $500 CL card is a killer.  Over the limit FICO death score on that card.  But the same $600 balance on a $7,000 CL card is under 10% util, with litle impact.

My rough guestimate is if you get your two maxed cards down to under 10%, you could see a FICO jump of 40-50 pts, depending of course, on other factors in your CR.

[RobertEG]

I will raise only one other thing to consider when it comes to letting your % util go over your CL on any one account that has nothing to do with pure FICO scoring.

Most CC agreements state that going over the CL is a violation of your account agreement, and thus may subject you to fees, inreases in your % APR, decreases in your available CL, and maybe even closing of their account.

Going over CL is not something you want in your CR.

Most consumers are lulled into the fact that FICO has no historic memory of % util from one month to the next, and that is, of course, true.  If a card is at 103% util one month, and then is brought down to under 10% util the next month, then FICO only looks at the most recent % util when doing its scoring thing.

But creditors dont get the same sanitized consumer summary of your CR that is obtained when you do your own pull.

Your full credit file still retains your specifc monthly balance history for the immediate 24 months, and creditors can see repeated prior high and over the limit patterns, in addition to only your current balances and utilization.

Being at or over the limit, for example, over almost all of the last 24 months, and yet now being under 10%, may raise concerns in a manual review of your CR.

[Anonymous]

Understood.  Great psot!!!

[Anonymous]

I meant post.  Sorry

[Anonymous]

Great information, this helped me out a lot.  I’m currently working on lowering my utilization on all my cards after being unemployed for almost a year.   I have four cards that are hovering around 88% utilization.  I plan on paying all of these credit cards to under 9% within by the end of the year.  Is it better for my fico score if I

1. Work on one card at a time and pay it down to 9%
2. Spread the wealth and divide my extra $$ to pay down all cards at the same time.

Should I worry about my overall utilization or my individual?  I’m looking to bring my score up as quickly as possible so I am able to move into a more affordable apartment.  Would it be better for the history the creditor gets to see that I’m paying all bills down monthly? I hope this makes sense.

Thanks LJ

[Jazzzy]

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@Anonymous wrote:

Great information, this helped me out a lot.  I’m currently working on lowering my utilization on all my cards after being unemployed for almost a year.   I have four cards that are hovering around 88% utilization.  I plan on paying all of these credit cards to under 9% within by the end of the year.  Is it better for my fico score if I

1. Work on one card at a time and pay it down to 9%
2. Spread the wealth and divide my extra $$ to pay down all cards at the same time.

Should I worry about my overall utilization or my individual?  I’m looking to bring my score up as quickly as possible so I am able to move into a more affordable apartment.  Would it be better for the history the creditor gets to see that I’m paying all bills down monthly? I hope this makes sense.

Thanks LJ

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There are various ways to go about this. It somewhat depends upon whether you are looking to save $$ or looking to raise your FICOs.

In order to save $$: Many will advise that you pay your cards off beginning with the highest interest rate card first and pay minimums on the other three. Because that saves dollars, it means that you will ultimately have more dollars to apply to the balances.

In order to maximize FICOs: Here you will do best with fewer balances showing. Therefore, this system would have you start with the card with the lowest balance first. Pay that one off and then start on the one with the next lowest balance. Everyone's FICO scores react a bit differently. For us, for example, we get a 5 to 7 point bump or loss depending upon whether we have 2 vs. 3 cards showing small balances each month. (I never seem to be able to get it down to just one because the whole family uses the cards and I don't want to micromanage who is using which card on which day.)

All that said: Whichever route you choose, you may want to tackle one card and then pay on the other three...but I would set it up to pay more than just the bare minimum on the other three. Many cc companies are taking adverse actions and closing cards or lowering credit limits if the customer appears to be fairly maxed out and only paying the minimum due. That's why I'd throw a bit more than minimum at each card. I don't know if you've had any adverse action yet, but you don't want to draw their attention.

As you get closer to applying for your apartment, you can super-tweak your FICOs by making your payments before the statements cut. When trying to maximize FICOs, you not only have to manage the debt...you have to manage the reporting. It's normally the statement balances that report, so you want those payments made before the reporting happens.

Sounds as if you're working hard despite being unemployed. If you want to list your cards and their balances and their interest rates, the posters here can super-tweak their advice to you.

[smallfry]

Number of accounts with balances versus total of open accounts can be a fairly important consideration. EQ pull with 4 of 7 reporting balances 754. 3 of 7 reporting balances 766. TU 4 of 7 770. TU 3 of 7 784. No other changes less than a month apart.