Test of bringing total credit card balance to 8.9% utilization

[jonathonDenver]

Hi all,

I had read several board posts on this topic and was in a unique situation where I was able to test. Below is what happend with my Equifax FICO 8 scores (similar results reported by the other two agency scores as well):

Starting score: 808 (7.3% overall utilization, 2 cards with zero balance, 2 cards with 11% utilization each, 30 yr credit history, no negatives)

Change: Overall utilization increases to 9.3%: 5 point drop to 803

Change: Overall utilization increases to 10.5% and one card increases to 30% utilization: 12 point drop to 791

Change: Overall utilization decreases to 8.9% and same card above increased to 35% utilization: 15 point increase to 806

Observation: I think this supports the theory that ≤8.9% is ideal starting territory for overall cc utilization. As I pay that down to close to (but not) zero, I will update this thread. I believe this also supports the idea that overall utilization has more weight than single card utilization. I do think you may get dinged a couple of points when a single card exceeds some percentage (I can't exactly identify the exact %, though).

From my experience, after overall utilization, the next biggest impact from cc's comes from having two or more cards reporting balances. From what I can ascertain, the absolute best cc strategy overall is (as mentioned many many times in these forums) keep overall util % under ≤8.9% and have only one card report a nominal balance. My personal highest scores (in the 820's) have been when my overall util was under 4% with only one card reporting a small balance, so there are additional breakpoints below 8.9%, it seems. At that time I had a new installment loan, so as that gets paid down, I'm hoping to approach the magical 850, if for no other reason than it being a challenge.

Hope this helps!

[Anonymous]

Great data points!

I have a young AAoA (12-24 months depending if AU counts) and a young AoOA (63 months) so I am scorecarded quite low.

For me, my FICO scores are IDENTICAL for all of these:

1. Aggregate utilization < 8.9%, 1 card < 8.9% (AZEO Method)
2. Aggregate utilization < 8.9%, 2 cards each < 8.9%
3. Aggregate utilization < 8.9%, 3 cards each < 8.9%
4. Aggregate utilization < 8.9%, 2 cards each < 28.9%

Total of 10 credit cards.  If I go to 4 cards with utilization I get dinged slightly for too many cards with balance.  All 4 of those are identical FICO 8 scores for me on my profile/scorecard.

This month I am testing 2 cards < 28.9% and one card < 48.9% (Chase) which I will PIF to $0 after it reports so I can test the next amount out.  It will also raise me slightly above 8.9% aggregate, so that'll be interesting to see.

[jonathonDenver]

Wow, it looks like age is a dominant factor when your account is so young. I look forward to seeing the results of your experiment with the two cards! I keep a spreadsheet with every single event change in my report and the corresponding score change, so over time I have been able to learn how specific actions affect my score. These boards have helped immensely as well.

[Thomas_Thumb]

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@Anonymous wrote:

Great data points!

I have a young AAoA (12-24 months depending if AU counts) and a young AoOA (63 months) so I am scorecarded quite low.

For me, my FICO scores are IDENTICAL for all of these:

1. Aggregate utilization < 8.9%, 1 card < 8.9% (AZEO Method)
2. Aggregate utilization < 8.9%, 2 cards each < 8.9%
3. Aggregate utilization < 8.9%, 3 cards each < 8.9%
4. Aggregate utilization < 8.9%, 2 cards each < 28.9%

Total of 10 credit cards.  If I go to 4 cards with utilization I get dinged slightly for too many cards with balance.  All 4 of those are identical FICO 8 scores for me on my profile/scorecard.

This month I am testing 2 cards < 28.9% and one card < 48.9% (Chase) which I will PIF to $0 after it reports so I can test the next amount out.  It will also raise me slightly above 8.9% aggregate, so that'll be interesting to see.

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Not liking this test - Forming conclusions is problematic when when factors are confounded. I'd propose revising it to ensure aggregate stays below 8.9%. How about 2 cards < 8.9% and one card < 48.9% while maintaining AG UT under 8.9%?

P.S. Evidence to date suggests individual card utilization up to 28.9% is a non event (no score penalty). It is good to see additional supporting data. The key is to maintain aggregate below 9% (8.9% ). It appears that a majority of people won't see a score drop due to card UT as long as it is kept under 49% (48.9%) and the influence on AG UT is small enough to stay below 9%. Another data point: 29% < higest card UT < 49% with AG UT below 9% would be very helpful.

[HeavenOhio]

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@jonathonDenver wrote:

My personal highest scores (in the 820's) have been when my overall util was under 4% with only one card reporting a small balance, so there are additional breakpoints below 8.9%, it seems.

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My FICO8s were dinged on all three bureaus last spring when I went from approximately 4% to 5% overall utilization. Bringing my balances down by a couple hundred dollars brought my scores right back to where they were.

[Anonymous]

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@Thomas_Thumb wrote:

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Not liking this test - Forming conclusions is problematic when when factors are confounded. I'd propose revising it to ensure aggregate stays below 8.9%. How about 2 cards < 8.9% and one card < 48.9% while maintaining AG UT under 8.9%?

P.S. Evidence to date suggests individual card utilization up to 28.9% is a non event (no score penalty). It is good to see additional supporting data. The key is to maintain aggregate below 9% (8.9% ). It appears that a majority of people won't see a score drop due to card UT as long as it is kept under 49% (48.9%) and the influence on AG UT is small enough to stay below 9%. Another data point: 29% < higest card UT < 49% with AG UT below 9% would be very helpful.

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To be honest, I'm not liking it either, but it was a math mistake on my part (and my utilization calculator website) -- I screwed up one line of the calculator and it actually forgot to add that balance to aggregate utilization, oops.  It's not too late to adjust it, I think, so I will scramble a bit today to figure out new balances to report!  My cards report on the 11th, the 13th and the 16th (Chase) and if I pay down the 13th card, it'll give me just enough headroom to get below 8.9%!  Thanks for pointing it out.

So this month I will be reporting:

1. One card ~8%
2. One card ~6-8% (was 8% but if I lower it a bit it'll bring aggregate back under 8%)
3. Chase card ~30% (I have time to get it there) -- this will get PIF'd after everything updates and I get some alerts

These are all bank cards, but I'm not sure it matters.  When my Amazon reported with a $75/$6000 balance a few months ago (oops!) I had zero effect on FICO scoring with 2 other cards reporting < $50/2%.

Next month I'll aim to have 3 cards < 28% but aggregate > 8% if I can, with one card being Chase so I can PIF to do some comparisons again.

I'll be back to AZEO in February to get a new baseline on scoring because I have some expectations on a big FICO boost every month in 2018 from 710->760 so that'll somewhat confound things if I don't get any early alerts to tell me my new baseline before utilization reports.

Really wish I had 2 Chase cards, would make playing the utilization reporting game easier since I can always PIF balances and I can run some dangerously high levels for 2-3 days.  Maybe CSR is in my future enough to throw something against the wall and see what sticks.

Thanks for pointing out the concern about > 8.9% aggregate utilization, didn't consider it!

[Anonymous]

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@HeavenOhio wrote:

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My FICO8s were dinged on all three bureaus last spring when I went from approximately 4% to 5% overall utilization. Bringing my balances down by a couple hundred dollars brought my scores right back to where they were.

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I've seen this data point a handful of times online but never paid attention to their FICO8s.  Maybe at some scorecard there's a 4.9% breakpoint that doesn't exist on others?  I have NOT seen it on my 5 year scorecard -- 2%, 5%, 8%, 8.9% exactly all score the same (within a 60 day period of rotating utilization cards).  I won't be at the next scorecard tier for 30 months or so.